1

Issue of Shares
Multiple Choice Questions
Select the Best Alternate and tally your answer with the Answers given at the
end of the book:
)Meaning and Characteristies of a Company
Q. 1. A company h a s . . .

(A) Separate Legal Entity (B)Perpetual Existence

(C) Limited Liability (D)All of the Above

Q.2. Shareholders are:

(A) Customers of the Company (B) Owners of the Company
(C) Creditors of the Company D) None of these

Q.3. Who are the real owners of a company?

(A) Government (B) Board of Directors
(C) Equity shareholders (D) Debentureholders

Q.4. A Company is created by:

(A) Special act ofthe Parliament (B) Companies Act
D) Members
(C)Investors
Q.5. An artificial person created by Law is called
(A)Sole Tradership (B) Partnership Firm
(C) Company (D) All of the Above

Q.6. The liability of members in a Company is :

(A) Limited (B) Unlimited
(C) Stable (D) Fluctuating

Q.7. Liability of a shareholder is limited to ... o f the shares allotted to

him
(A) Paid up Value (B) Called up value
(C) Face value (D) Reserve Price

Q.8. Maximum number of members in a private company is

(B) 200
(A) 7
C) 20 (D) No Limit
62 JE OF_SHARES
ISSUE DF SHARES
(i) Meaning, Nature and Types of Shares
units which is calied:
Q.9. Capital of a Company is divided in
(B) Share
(A) Debenture
(C) Stock (D) Bond

the company
Q.10. Shareholders receive from
(A) Interest (B) Commission
(C) Profit (D) Dividend

Q.11. Equity shares cannot be issued for the purpose of:

(A) Cash Receipts (B) Purchase of assets
(C) Redemption of debentures (D)Distribution of dividend
Q.12. A Company may issue.
(A) Equity Shares
(B) Preference Shares
(C) Equity and Preference both shares
(D) None of the Above
HOTS
Q.13. A company cannot issue
(A) Redeemable Equity Shares (B) Redeemable Preference Shares
(C) Redeemable Debentures D) Fully Convertible Debentures
Q.14. To whom dividend is given at a fixed rate in a company?
(A) To equity shareholders (B) To preference shareholders
(C) Todebentureholders (D) To promoters
Q.15. Preferenceshareholders have
(A) Preferential right as todividend only
(B) Preferential right in the management
(C) Preferential right as to repayment of capital at the time of liquidation of
the company
(D) Preferential right as to
dividend and repayment of
liquidation of the company capital at the time of
0.16. The shares on which there is no any pre-1ixed rate
the rate of dividend is fluctuating every year
of dividend is decided, but
profits, such share are called
according to the availability of
(A) Equity Share (B) Non-cumulative
C) Non-convertible preference share (D) Non-guaranteed preference share
preference share
17 Preference shares, in case the holders or
nese have a right
preference shares into equity shares at tneir option to convert their
issue, such shares are called according to the terms
ms

(A) Cumulative Preference Share (B) Non-cumulative Preference Share

(C) Convertible Preference Share (D) Non-convertible Preference Share
ISSUE OF SHARES
63

Q. 18. A preference share which does not carry the right of sharing in surplus profits
iscalled..
(A) Non-Cumulative Preference Share
(B) Non-participating Preference Share
C) Iredeemable Preference Share
(D) Non-convertible Preference Share

0.19. Which shareholders have a right to receive the arrears of dividend from future
profits
(A) Redeemable Preference Shares
(B) Participating Preference Shares
(C) Cumulative Preference Shares
(D) Non-Cumulative Preference Shares

Q. 20. Which shareholders are returned their capital after some specified time
(A) Redeemable Preference Shares
(B) Iredeemable Preference Shares
(C) Cumulative Preference Shares
(D) Participating Preference Shares

HOTS
Q.21. The following statements apply to equity/preference shareholders. Which one
sharehoders?
of them applies only to preference
of investment
(A) Shareholders risk the loss
(B) Shareholders bear the risk of no dividends in the event of losses
(C) Shareholders usually have the right to vote
(D) Dividends are usually given at a set amount in every financial year.

HOTS
Q.22. Unless otherwise stated, a preference share is always deemed to be:
non-convertible
(A) Cumulative, participating and
(B) Non-cumulative, non-participating and non-convertible
(C) Cumulative, non-participating and non-convertible
(D) Non-cumulative, participating and non-convertible
) Meaning, Nature and Types of Share Capital
Q.23. Nominal Share Capital is * *

(A) that part of authorised capital which is issued by the company

(B) the amount of capital which is actually applied by the prospective
shareholders
(C) the amount of capital which is actually paid by the shareholders
(D) the maximum amount of share capital which a eompany is authorised to
iSSue
 64 ISSUE OF SHARES
Q. 24. The portion of the capital which can be called-up only on the windino.
the Company is called...
ding up of
(A) Authorised Capital
(B) Called up Capital
(C) Uncalled Capital
(D) Reserve Capital (CPT Dec. 2012)
Q. 25. Capital included in the Total of Balance Sheet of a Company is called:
(A) Issued Capital (B) Subscribed Capital
(C) Called up Capital (D) Authorised Capital
Q. 26. is transferred to Capital Reserve.
(A) Profit from sale of fixed assets
(B) Premium on issue of shares
(C) Profit on forfeiture of shares
(D) All of the Above

Q.27. Reserve Capital is also known by:

(A) Capital Reserve (B) Called up Capital
(C) Subscribed Capital (D) None of the above

Q.28. Reserve Capital is

(A) Subscribed Capital
(B) Capital Reserve
(C) Uncalled Capital
(D) Part of the uncalled capital which may be called only at the time of
liquidation
of theCompany
Q. 29. In theBalance Sheet of a company, under the heading share
is shown
capital, at the last

(A) Authorised Share Capital (B) Subscribed Share Capital

(C) Issued Share Capital D) Reserve Share Capital
Q. 30. Which of the following is not shown under the
heading 'Share Capital' in a
Balance Sheet
(A) Subscribed Capital (B) Issued Capital
(C) Reserve Capital (D) Authorised Capital
Q.31. Reserve Capital is a part of:
(A) Paid-up Capital
(B) Forfeited Share Capital
C) Assets
(D) Capital to be called up only on liquidation of company
 65
; OF SHARES

OTS
Which of the following statements is true?
32.
Issued Capital
(A) Authorised Capital
=

> Issued Capital

(B) Authorised Capital
Issued Capital
(C) Paid up Capital> Foundation, Dec., 2012)
(C.S.
(D) None of the above
Company is mentioned in
33. Authorised Capital of a

(B) Articles of Association

(A) Memorandum of Association
(D) Statement in lieu of Prospectus
(C) Prospectus
lock in period is :
In of private placement of shares, the
0.34. case
(B) 2 Years
(A) I Year
(C) 3 Years (D) None of the above
does notinvite the general
of private placement of shares and company
.35. In case company instead
of issuing
public for subscription of shares in that case,
prospectus

(A) Prepares the statement in lieu of prospectus

(B) Prepares the Report
(C) Prepares the Budget
(D) Prepares the Asset side of Balance Sheet
shares, to raise the amount of capital a

36. In case of private placement of

company
prospectus
(A) invites the public through
(B) does not invite the public
advertisement
(C) invites the public through
memorandum of association
D) invites the public through in consideration of
to its employees or directors
Shares issued by a company
are called .
Intellectual Property Rights' Shares
(B) Private Equity
(A) Right Equity Shares Shares
(D) Bonus Equity
C) Sweat Equity Shares

lssue and Allotment of Shares

38. A Compan; may issue the share

A) By Private of Shares
Placement

5) By Public Subscription of
Shares
than cash
() For Consideration other

(D) By All ofthe Above

include
9. Public subscription of shares (B) To Receive Applications
(A) To Issue Prospectus (D) All of the Above
(C) To Make Allotment
 ISSUE OF SHARE
ofa certain n i t l nber of
appropriation
when
66 will define, application?
to his
Q. 40. Which ofthe following
applicant
in response
(B) Share forfeiture

is made to an
shares
(D) Share Purchase
(A) Share allotment
C.S. Foundation, Dec. 2012
(C) Share trading
value is called
than its face
price lower Profit
of shares at Issue at a
a
Q. 41. Issue (B)
Premium
(A) Issue at a Loss (D) Issue at a
Discount
(C) Issue at a
Subscription has been fixed at
Minimum
Act,
to Companies
Q. 42. According
amount.
of the issued (B) 50%
(A) 25% (D) 100%
(C) 90%
allotment of shares is
addition to others, for
conditions, in Subscription
Q. 43. One of the Minimum
General Meeting (B) Receiving
(A) Resolution in on Application
by Public (D) Full Payment
C) Full Subscription

Persons who start a company are called.. .

Q.44. (B) Directors
(A) Shareholders
(D) Auditors
C) Promoters

is related to which share capital

Q. 45. Minimum subscription amount of 90%
(A) Authorised Capital (B) Issued Capital
(C) Paid up Capital (D) Reserve Capital

Q. 46. Share Application

Account is in the nature of
(A) Real Account (B) Personal Account
C) Nominal Account (D) None of the above

As per SEBI Guidelines, Application money should not be less than .. **

.

o.47.
of the issue price of each share.
(A) 10% (B) 15%
(C) 25% (D) 50%
ters
Shares ofR10 each the prom0
issued at 8% premium
Q. 48. 4,000 Equity were to
of a company for their services. Which account will be debited?
(A) Share Capital Account
(B) Goodill Account/Incorporation Cost Account
(C) Securities Premium Reserve Account
(D) Cash Account
net
Q.49. If vendors are issued fully paid shares of 1,25,000 in consideration ofne
assets of 71,50,000, the balance of R25,000 will be credited to:
(A) Statement of Profit & Loss (B) Goodwill Account
C) Security Premium Keserve Account (D) Capital Reserve Accou
SSUE OF SHARES
67
Q.50
0 .Issue of shares at a price higher than its face value is called:
(A) Issue at a Profit (B) Issue at a Premium
(C) Issue at a Discount (D) Issue at a Loss
0.51. On issue of shares Premium is
(A) Profit (B) Income
(C) Revenue Receipt (D) Capital Profit
HOTS
0.52. Which ofthe following is not a capital profit?
A) Profit prior to
incorporation of the company
(B) Profit from the sale of fixed assets
(C) Premium on issue of shares
(D) Compensation received on the termination of a contract

Q.53. Maximum limit of Premium on shares is:

(A) 5% (B) 10%
C) No Limit D) 100%
Q.54. When a company issues shares at a premium, the amount of premium should
be received by the company
(A) Along with application money (B) Along with allotment money
(C) Along with calls (D) Along with any of the above
.55. Amount ofsecurities premium can be utilised for:
(A) Writing off the preliminary expenses ofthe company
(B) Issuing bonus shares to the shareholders of the company

(C) Buy-back of its own shares

(D) All of the above
Q.56.
0. For what purpose securities premium reserve account cannot be utilized?

(A) Amortization of preliminary expenses

(B)C) Distribution of dividend
Issue of fully paid bonus shares

(D) Buy Back of own shares (CPT: Dec. 2010)

.57. Premium
remium on the issue of shares should be shOwn
A) On the Assets side of balance sheet

On the Equity & Liabilities side of balance sheet

C) In profit & loss Statement
(D) None of the Above
S8.A Company issued 50,000 shares of R20
each at 5% premium. 10 were
on allotment. What will be the allotment
Payable on application and balance
amount? (B) 4,75,000
(A) 75,00,000
(D) 5,25,000
C) 5,50,000
 ISSUE OF SHARE

according
to Table F at:
68
in arrears is charged
on calls (B) 10% p.a.
. 59. Interest
(A) 6% p.a (D) 12% p.a.

(C)5%p.a Balance Sheet

is shown inthe
Q.60. Amount of
Calls in Arrears
from issuedcapital
(A) as deduction subscribed capital
deduction from
(B) as

to subscribed capital
C) as addition (CPT Dec. 2012
the assets sidec
(D) on
to pay. .... interest on the
Company is required
Q.61. As per Table F, the
amount of calis in advance
(B) 5% p.a.
(A) 12% p.a.
(D) 6% p.a.
(C) 10% p.a.

Q.62. Amount of Calls in Advance is

(A) Added to Share Capital
(B) Deducted from Share Capital
(C) Shownm on the Assets side
D) Shown on the Equity & Liabilities side
HOTS

Q. 63. Following amounts were payable on issue of shares by a Company

application, 73 on allotment, F2 on first call and 2 on final call. X holdin:
500 shares paid only application and allotment money whereas Y holding
shares did not pay final call. Amount of calls in arrear will be
(A) 3,800 (B) R2,800
C) 71,800 (D) T6,200
Q.64. The subscribed capital ofa company is 80,00,000 and the nominal value
the share is 100
each. There were no calls in arrear till the final cal
made. The final eall made was
paid on 77,500 shares only. The balance in
calls in arrear amounted to
R62,500. Calculate the final call on share.
(A) 7
(B) 20
(C) 22
(D) 25
0.65. A shareholder
holding 600
Ist November 2018 whereas
shares paid the amount of call ( 5
the call was per shai
calls in advance as due on lst March 2019. Intere
per Table F will be
(A) 745
C) 50 (B) 760
(D) R120
0. 66. From which account,
experises on issue of shares
all will be written off
 69
E OF SHARES

Statement of Profit and Loss

(A)
(B) Miscellaneous Expenditure Account
(C) Share Issue Expenses Account

D)Securities Premium Reserve Account

67. Pro-rata allotment of shares is made when there is
(A) Under subscription
(B) Oversubseription
(C) Equal subseription
D) As and when desired by directors

into 5,00,000 shares of T10 each.

,68. Authorised capital of a Company is divided for Amount of
It issued 3,00,000 shares. Public applied 3,60,000 shares.
issued capital will be
(A) T30,00,000 (B) 736,00,000
(C)T50,00,000 D) 6,00,000
it received
invited applications for 1,00,000 shares and
0,69. A Company shares were rejected
applications for 1,50,000 shares. Applications for 30,000
allotted shares on prorata basis. How many shares
an
and the remaining were
applicant for 3,000 shares will be allotted:
(A) 2,500 Shares (B) 3,600 Shares

C) 4,500 Shares (D) 2,000 Shares

HOTS
of 14,000 shares on pro-rata
Q.70.E Ltd. had allotted 10,000 shares to the applicants
was 2. F applied for 420 shares.
basis. The amount payable on application
carried forward for adjustment
The number of shares allotted and the
amount

from F will be
against allotment money due
(A) 60 shares; 120 (B) 340 shares; 160
(C) 320 shares, 200 (D) 300 shares; F240
(C.F. Foundation, June 2013)

allotted 60,000 shares on prorata basis,

.71.If applicants for 80,000 shares were
for
the shareholder who was allotted 1,200 shares must have applied
(B) 3,600 Shares
(A) 900 Shares
(D) 4,800 Shares
C) 1,600 Shares
of R10 each at par payable as to 73 on
2.A Company offered 50,000 shares balance on final call. Applications were
the
applications, 75 on allotment and allotment was made pro-rata. The excess
the
received for 60,000 shares and allotment and call. How much
on
application money was to
be adjusted
from Share Application
A/c to Share Allotment
amount will be transferred
Alc? (B) 730,000
(A) 1,80,000 (D) 750,000
(C) 1,50,000
 par at unde
payable as
70 each
on final call I per
of RI0 call

equity
shares
call
4 and
HOTS issued4,000 2; on
first
allotment

for 3,000.shares
company
Q.73. A 3; on
Applications

for 1os
application
On shares.
applicants

share. received
for 13,000 made to the
was first call2
Applications
were
allotment
in cash on Kcess
and pro-rata be
received
ment and calls,
were
rejected amount
will due o n allotm

shares. How
much towards
amount

money
is adjusted (B) Nil
application
(D) T10,000
(A) 76,000
(C) R16,000

under
HOTS each at par payable as r

4,000 equity
shares of 10 and on final call l per
n

Q.74. A company
issued
first call 4
allotment 2; on
On application 3; on

share. Allotment was made pro-rata

received for 10,000 shares.
Applications were allotment?
be received in cash
on
How much amount will
(B)12,000
(A) F8,000
(D) None
(C) Nil

HOTS
shares of 100 each at par payable as to
Q.75. A company issued 5,000 equity
T40 on application; 750 on allotment and F10 on call.
Applications were received for 8,000 shares. Allotment was made on pro-rata
How much amount will be received in cash on
allotme:
(A)2,50,000 (B) R1,20,000
(C) R1,30,000 (D) 50,000
Q.76. A Company purchased abuilding for 3,60,000 and issued as payment egui
shares at 20%
premium. Journal Entry will be:
(A) Building A/c Dr.
To Share Capital A/c 4,00,000
3,20,000
To Securities Premium Reserve A/c 80,000

(B) Share Capital A/Jc

To Building A/c Dr 4,00,000
To Securities Premium Reserve 3,60,000
A/c 40,000

(C) Building A/c

To Share Dr.
Capital A/c 3,60,000
To Securities Premium Reserve 3,00,000
A/c 60,000
(D) Building A/c
To Share
Capital A/c Dr
To Securities Premium Reserve 3,60,000 60,000
A/c
3,00,000
uE OFSHARES
71
17, A Company purchased a Building for 712,00,000
were paid in cash. Balance amount
out of which 2,00,000
paid by issue of equity shares of R10
was
each at 25% premium. How many shares will be
(A) 1,00,000 Shares
issued by the Company
(B) 80,000 Shares
(C) 1,20,000 Shares
(D) 96,000 Shares
78. 1f shares of R4,00,000 are issued for
purchase of assets of
1,00,000 will be treated as ... 75,00,000,
(A) Discount
(B) Premium
(C) Profit
(D) Loss
0.79.A Building was purchased for 79,00,000 and payment was made in 7100
shares at 20% premium. Securities Premium Reserve A/c will be

(A) Debited by F1,50,000 (B) Credited by 71,50,000

C) Debited by 1,80,000 (D) Credited by 1,80,000
Q.80. A company purchased machinery for 1,80,000 and in consideration issued
shares at 20% premium. What will be the face value of shares issued
(A) T1,50,000 (B) 1,44,000
(C)T1,80,000 (D) 72,16,000
Forfeiture of Shares
Q.81. Forfeiture of shares results in the reduction of:
(A) Subscribed Capital (B) Authorised Capital
(C) Reserve Capital D) Fixed Assets
Q82.Which one ofthe following items is not a part of subscribed capital?
(A) Equity Shares (B) Preference Shares
C) Forfeited Shares (D) Bonus Shares
65. At the time of forfeiture of shares the share capital account is debited with

(A) Face value (B) Called up value

C) Paid up value (D) Issued value (CPT, June 2011)
Q. 84. Voluntary return of shares for concellation by the shareholders is called
(A) Cancellation of shares (B) Forfeiture
C) Surrender of shares (D) None ofthese
Q.85. If the Premi on the forfeited shares has already been received, then
Securities Premium A/c should be
(B) Debited
(A) Credited
C) No treatment (D) None of these (CPT, June 2011)
iOTS
Q.86.5alance
Balance of share forfeiture account is shown in the balance sheet under the

head.. ***

(B) Reserve and Surplus

A) Share Capital Account
Unsecured Loans
Current Liabilities and Provisions (D)
CPT, Dec. 2010)
 ISSUE OF SHARES
but 6 have
has called up R8 been
72
T10the
company dek
a c c o u n t should be

equity share of the capital

Q.87. On an
company
is forfeited,

received by the

by: (B)78
(A) 1 0 (D)7 2
(C)6
on which
the full a m o u n t has heeeen
of R3
i10 issued at
a premium
forfeited the capital
account shoula
Q. 88. Ifa share of paid is
(including premium)
called and R8
bedebited with: (B) 78
(A)5 (D) F13
(C) T10
1 on which
9 (includin
issued at a premium of
share of 710 is paid is forfeited
Q.89. If a 7 including premium
been called and
premium) have
account should be
debited by
thecapital (B) 7
(A) F10
(D)F9
(C) 8 first
share on
were forfeited for
non-payment of 2 per
Q.90. 600 shares of 710 each Account will be
credited
final call. Share Forfeiture
call and 5 per share on
with
(B) R1,800
(A) F1,200
(D) 4,200
C) F3,000
forfeited tor
at 20% premium were
Q.91. 800 shares of T10 each issued
and first & tina
non-payment of allotment money of T5 (including premium)
will be credited with
of 73 per share. Share Forfeiture Account
(A) F1,600 (B) 72,400
C)3,200 (D) 74,80o
we
on allotment)
Q.92. 800 shares of T10 each issued at 30% premium (to be paid
forfeited for non-payment of 2 per share on first call and 72 per share
final call. Share Forfeiture Account will be credited with
(A) 2,400 (B) 74,800
(C) 73,200 (D) 77,200
Q.93. A Company forfeited 300 shares of 710 each, 78 per share called up
har
which X had paid application and allotment money of 76 per share.
Forfeiture Account will be credited with
(A) ? 600 (B) 71,800
(C) 1,200 (D) R2,400
Q.94. On 300 equity shares of 710 the company has called up 78 but R6
be
received by the company are forfeited, the forfeiture account shou d
credited by
(A) 2,400
(B) 1,200
(C) 1,800
(D)600
 O FS H A R E S
73

shares of R10 issued at a premium of 73 on which the full amount has

95 If400called and R8
been (including premium) have been received are forfeited, the
forfeiture account should be credited with :
(A) 73,200 (B) 2,000
(C)1,200 (D) 2,800
If 500 shares of *10 isued at a premium of 1 on which T9 (including
.
premium) have been called and 7 including premium have been paid are

forfeited, the forfeiture account should be credited by

(A) T3,000 (B) 3,500
(C) 4,000 (D) 74,500
97, ACompany forfeited the following shares:
200 shares of R10 each; called up 9 per share, paid-up 7 per share. Journal
Entry for forfeiture will be):
(A) Share Capital A/c Dr. 2,000
To Share Forfeiture A/c 200
1,800
ToCalls in Arrears A/c
Dr. 2,000
B) Share Capital A/c 1,800
To Share Forfeiture A/c
ToCalls in Arrears A/c 200
Dr. 1,800
(C) Share Capital A/c 1,400
To Share Forfeiture Alc
400
ToCallsin Arrears Ac
Dr. 1,800
(D) Share Capital A/c 400
To Share Forfeiture Alc 1,400
To Calls in Arrears A/c
each, F7 called up, issued at a premium of
.98. XLtd. forfeited 500 shares of T10 of first call
time of allotment for non-payment
2 per share to be paid at the
forfeiture will be :
of R2 per share. Entry on 3,500
Dr.
(A) Share Capital A/c Dr. 1,000
Reserve A/c
Securities Premium 1,000
A/c
To Share First Call 3,500
To Share Forfeiture A/c Dr. 4,500
(B) Share Capital A/c Dr. 1,000
Reserve A/c
Securities Premium 1,000
A/c
To Share First Call 4,500
A/c
To Share Forfeiture 4,500
Dr.
(C) Share Capital A/c 1,000
Call Alc
To Share First 3,500
A/c
To Share Forfeiture Dr. 3,500
(D) Share Capital A/c 1,000
Call A/c
To Share First 2,500
Forfeiture A/c
To Share
 ISSUE OF SHARES
exceed.
shares cannot
74 forfeited
on
reissue of
Q.99. The
amount of discount
face value
(A) 5% of the
value
(B) 10% ofthe face forfeited
shares
received on
(C) The
amount
forfeited
shares (CPT Dec., 2012)
received on
not
(D) The
amount
shares is debited to :
re-issue of forfeited
100. Discount
allowed on
(B) Share forfeiture A/c
Q.
A/c
(A) Share Capital (D) General Reserve A/c
Loss
Statement of Profit &
(C) re-issue of forfeited shareces is
shares account after
forfeited
Q. 101. The balance ofthe
transferredto A/c
Loss (B) Share Capital
Statement of Profit & Reserve A/c
(A) (D) General
Reserve Alc
(C) Capital for non-payment
10 each fully called up
of

500 shares of
Q.102. X Ltd. forfeited share 300 of these shares w e r e reissued at 9 per share
final call of 73 per
What is the amount to
be transferred to Capital Reserve
fully paid up.
Account?
(B) 2,100
(A) F3,500
(C) 3,20o
(D) R1,800
103. Y Ltd. forfeited 400 shares of 10 each,
F7 called up, for non-payment of first
Q. call of 2 per share. Out of these, 300 shares were reissued for R6 pershareas
Reserve Account
paid up. What is the amount to be transferred Capital
to
7
(A) 1,700 (B) 1,200
(C)2,100 (D) 7 300

Q. 104. 400 shares of which 78 has been called and 5 has been paid. are
T10, on
forfeited. Out ofthese, 300 shares are re-issued for 79 as fully paid. What
the amount to be transferred to Capital Reserve Account?
(A) 1,200 (B) 1,600
C) 2,000 (D) F1,700
Q.105. R Ld. forfeited 600shares of R100 cach 7 0 called up on which Mahesh hs
paid application and allotment money of 750 per share. Of these, 400 st
were re-issued to Naresh as fully paid-up for 1 10 per share. What 1s
amount to be transferred to Capital Reserve?
(A) 730,000 (B) 36,000
(C) 24,000 (D) 20,000
o. 106. Madhu Ltd. forfeited 800 shares of ?10 each
issued at 10% premiu
Shyam (79 called up) on which he did not
premium) and first call of 72. Out of
pay 3 of allotment
allotment (includin
these, 600 shares were re-is
- i s s u e d to Ram

as fully paid up for 9 per share. What

is to amount to erred to capilal
Reserve? be transferre
(A) 72,400
(B) 71,800
(C) 73,000
(D) 73,600
sSUE OF SHARES
75
c7 Ifa share of R 100 on which R60 has been paid, is
forfeited, it can be re-1SSuea
at the minimum price of:
(A) 7 60
(B) 100
(C) 40
D) 7140
108. A Company forfeited 1,000 shares of I10 each fully called, on which 6,000
has been paid. Out of these 800 shares were reissued upon payment of 76,600.
What is the amount to be transferred to Capital
Reserve?
(A) 74,800 (B) 6,000
(C) 4,600 (D) 73,400o
o. 109. A company forteited 700 shares of R10 each, on which only 75 per share was
paid. Of these, 200 shares were reissued at 9 per share. Amount from Share
Forfeiture Account to Capital Reserve Account will be transferred
(A) T800 (B)200
(C) 3,500 (D) R2,500
Q.110. 300 equity shares of T10 each were issued at 75 per share premium. Only 4
per share on application has been paid on these shares. These shares were
forfeited. Later on out ofthese, 200 shares were reissued at 12 per share as
fully paid. What will be amount of Capital Reserve?
(A) F 500
(B) 1,200
(C) 200
(D) R 800

Q.111. 700 shares of 10each were reissued as9 paid up for R7 per share. Entry for
reissuewill be
(A) Bank Alc Dr. 4,900
Share Discount A/c Dr. 1,400
To Share Capital A/c 6,300

(B) Bank A/¢ Dr. 4,900

ToShare Capital A/c 4,900

(C) Bank A/c Dr. 4,900

Share Forfeiture A/c Dr. 1,400
To Share Capital A/c 6,300

(D) Bank A/c Dr 4,900

Share Forfeiture A/c Dr. 2,100
To Share Capital A/c 7,000
.112. A Ld. forfeited 2.000 shares of 1 0 each fully called up for non-payment of
final call of 72 per share. 1,200 of these shares were reissued at 77 per share.
fully paid up. What is the amount to be transferred to Capital Reserve

Account?
 ISSUE F SHARES

( B )71,200
16 ( D ) 7 6 , 0 0 0

(A) F 7,600 B..

in Share
(C) 1 2 , 4 0 0
Q. 112 what
is the net
balance
Forleiture
information given in
Q. 113. Using (B) F6,400
Account
(D)2,800
(A) 79,600
(C) 16,000

up, for
non-Davma.

HOTS 70 called ment of

T100 each, 6n
300 shares of were reissued for 60 per
114. B Lid.
forfeited 200 shares
Q. share. Out these, of to Capital Res erve
first call of R20 per
transferred
amount to be
What is the
share as70 paid
up.
Account?
(B) 8,000
(A) F13,000
(D) 7,000
(C) 2,000
R5 has been paid, are
which 7 has been called and
Q.115. 2,000 shares of T10,
on
are re-issued for
9 as fully paid. What is
forfeited. Out these, 1,500 shares Reserve Account?
of
the amount to be transferred to Capital
(A) T6,000 (B) R7,500
(C) F10,000 (D) R8,500
Q.116. X Ltd. forfeited 400 shares of R20 each 15 called up on which application
and allotment money of R1l per share has been received. Of these, 100 shares
were re-issued as fully paid-up for R24 per share. What is the amount to h
transferred to Capital Reserve?
(A) R1,500 (B) 4,400
(C) 1,100 (D) 3,500
HOTS
Q.117. Z Ltd. forfeited 300 shares of T10 each issued
20%
premium (T9
at
u called
on which 4 of
allotment
been received. Out
(including premium) and first call of R2 has
of these, 100 shares were re-issued as
per share. What is to amount to be fully paid uP
(A) T400 transferred to capital Reserve?
(C) 500
(B) T300
(D) 7600
Q.118. Using information given in Q. I17, what is
Forfeiture Account the net balance left i Share
(A) 1,400
(C) 900 (B) 1,500
(D) R1,000
Q. 119. P Lid. rfeited 150 shares of
non-payment of the linal call of R10 each, issued at for
11 per share. How R3. Out premium ol 72, a
a
much amount of these, 100
(A) 700 would be shares were re-1
(C) 1,200 transferred
(B) 500 to cap
apital reserve
(D) R300
(C.S. Foundation, Dec 201
SSUE OF SHARES 77

1OTS
a120. XY Limited issued 2,50,000 equity shares of 710 each at a premium of 1
each payable as R2.5 on application, R4 on allotment and balance on the first
and final call. Applications were received for 5,00,000 equity shares but the
company allotted to them only 2,50,000 shares. Excess money was applied
towards amount due on allotment. Last call on 500 shares was not received
and shares were forfeited after due notice. This is a case of
(A) Over subscription (B) Pro-rata allotment
(C) Forfeiture of Shares (D) All of the above
(C.S. Foundation, June 2013)

), 121. Metacaf Ltd. issued 50,000 shares of R100 each payable R20 on application
(on 1st May 2012); R30 on allotment (on 1st January 2013); 20 on first call
(on 1st July 2013) and the balance on final call (on Ist February 2014).
Shankar, a shareholder holding 5,000 shares did not pay the first call on the
due date. The second call was made and Shankar paid the first call amount

along with the second call. All sums due were received.
Total amount received on Ist February was
(A) F15,00,000 (B) F16,00,000
(C) R10,00,000 (D) R11,00,000
(C.B.S.E. Sample Paper, 2015)

See Answers at the end ofthe Book]

 Chapter 7
Issue of Shares
B 3. 4. B
D
6. A 7. C 8. B 9 B 10 D
11 D 12. C 13. A 14. B 15 D

16 A 17. C 18 B 19 C 20. A
21 D 22 C 23. D 24. D 25. B
26 D 27 D 28. D 29. B 30. C
31 D 32 B 33. A 34 C 35. A
36 B 37 C 38 D 39 D 40. A
41 C 42 C 43. B 44 C 45. B
46. B 47. C 48. B 49 C 50 B
51. D 52 D 53. C 54. D 55 D
56. B 57. B 58. 59 B 60. B
61 A 62 D 63. B 64. D
66.
65 D
D 67. B 68. A 69. A 70 D
71 C 12 B 73 A
76. C
74 C 75 C
11 B 78. B 79 B
81 80. A
82 C 83 B 84 C
86 87 B 85. C
88. C 89. C
91 C 92 B 90 B
93. B 94. C
96. A 97 C 98 D 95 B
101 99. C
C 102 D 03 B
100. B
106 104. A 105
107 C 108. D D
111. C 109 A
12 D 113 B 10 D
116 C 117 14 B
A 18. D 115 A
121 B 19 AA
120 D