Issue of Shares Comprehensive Questions – Part I © David Thomas

I.OVERSUBSCRIPTION AND SHAREHOLDER FAIL TO PAY SHARE ALLOTEMENT

Q1.A Ltd issued 30,000 equity shares of `10 each. The company received applications of
45,000 shares and returned 5000 shares . The balance shares were transferred to Share allotment
.The share money payable as follows .
Application ` 2
Allotment `3
I call `3
II call `2
X the holder of 3000 shares failed to pay share allotment, share first and second call
and his shares were forfeited and reissued at `9 .Pass Journals

2.B Ltd issued 50,000 equity shares `10 each. The company received applications for 70,000
shares and returned 10000 shares . The balance shares were transferred to Share allotment .The
share money payable as follows .
Application `3
Allotment `2
I call `3
II call `2
A the holder of 5000 shares failed to pay share allotment, share first and second call
and his shares were forfeited and reissued at `9.5 as fully paid .Pass Journals

Q3. Anjana Ltd issued 40,000 Equity share capital of `100 each . The company received
applications for 60,000 shares and returned 10,000 sharers
Application `10
Allotment `40
I call ` 20
II call 30
X failed to pay Allotment ,I and II call for 4000 shares
His shares forfeited and reissued at ` 105 each . Pass Journals

Q4. Akbar Ltd issued 5000 Equity share capital of ` 20 each . The company received
applications for 8000 shares and returned 1000 shares balance transferred
Application ` 3
Allotment ` 2
I call ` 9
II call Balance
Sunita failed to pay Allotment ,I and II call for 50 shares
His shares forfeited and reissued at ` 25 each .
Q 5 X Ltd issued 60,000 equity shares `10 each. The company received applications for
100,000 ,shares and returned 30 000 shares . The balance shares were transferred to Share
allotment .The share money payable as follows .
Application `3
Allotment `2
I call `3
II call `2
A the holder of 6000 shares failed to pay share allotment, share first and second call
and his shares were forfeited and reissued at `9.5 as fully paid

Q6. Ramya Ltd issued `400,000 Equity share capital of `50 each . The company received
applications for 10,000 shares and Pro rata allotment made for 9,000 shares
Application `10
Allotment `20
I call `15
II call Balance
X failed to pay Allotment ,I and II call for 80 shares
Y failed to pay I II call for 50 shares
All the shares forfeited and reissued at `45 each . Pass Journals

Q7.Z ltd issued 40,000 shares of `10 each . The company received 50,000 shares and returned
5,000 shares .
Application `4 Allotment `3 I call `2 II call `1
Y the holder of 4000 shares failed to pay Allotment , I and II call
Z the holder of 3000 shares failed to pay I and II call
The company forfeited the failed shares and reissued for `66,500 to X as fully paid up .
Pass Journals

Q8.X ltd issued 60,000 shares at the rate of `10 each to the public. The share money payable :
Application `2 Allotment `3 I call `2 II call Balance
The company received the applications for 90,000 shares. The directors transferred 20,000
shares The balance return to share holders . The excess money paid on applications are adjusted
towards allotment.
A, the holder of 6000 shares failed to pay the share allotment and calls, his shares are forfeited
.
B, the holder of 3000 shares failed to pay the calls, his shares are forfeited.
All the forfeited shares are reissued at `9 per share as fully paid to C. Pass Journals .

Q9. Das ltd offered 80,000 shares of `10 each at a premium of 20 % . The company received
90,000 applications . Pro rata allotment was made to 85,000 shares .
Application `2
Allotment `5(premium ) Raj failed to pay Allotment and Call for 8000 shares
I call Balance Rajan failed to pay Call for 2000 shares
All shares are forfeited and Reissued at `8.5 Pass Journals .
Q10.Raj Ltd offered to the public 5000 shares of`100 each at a premium of 10 % .
Public applied for 7000 shares and the directors returned 1000 shares and the remaining shares
money transferred to the allotment . The share money payable as follows .
Application `30
Allotment `40 ( premium )
I call `10
II call -Balance
A the holder of 600 shares failed to pay share allotment, share first and second call
B the holder of 300 shares failed to pay the share first and second call
All the above shares are forfeited and reissued at `95 as fully paid . Pass Journals

Q 11.Rasha Ltd invited applications for 5000 Shares of Rs. 100 each at a premium of 20 %
The company received applications for 7000 shares and all the shares allotted on pro rata basis.
The share money payable as follows :

Application `20
Allotment `60 ( include premium `20 )
I call `30
II call - Balance
X the holder 500 shares failed for allotment and calls , his shares forfeited
Y the holder of 250 shares failed to pay calls , his shares forfeited
All the shares reissued for `70,000 as fully paid up .
Pass Journals

II.PARTIAL REISSUE
Q1. A company issued 60,000 shares of `10 each payable application `2 , allotment `4 , I call
`3, II call – balance
The company received applications for 90,000 shares . The company decided to return 20,000
shares fully and allot the balance on pro rata basis. A share holder having 6000 shares failed to
pay his allotment, first and second call, his shares were forfeited . B share holder having 4000
shares failed to pay his first and second calls money, his shares were forfeited . 9000 shares
reissued at `8.5 which includes A fully . Pass journals

Q2.A company issued 40,000 Equity shares of `10 each at a premium of 60 % . The company
received applications for 70,000 shares and returned 10,000 shares fully, the Balance allotted on
pro rata basis. The share money available as follows .
Application ` 2 Allotment `9 ( include premium `6 ) I call `4 and the balance on the second
call . X the holder of 4,000 shares failed to pay allotment and calls money shares forfeited and
the Y the holder of 3000 shares failed to pay Calls money and his shares forfeited . Out of the
forfeited shares 5000 shares reissued at `9 per share which includes X fully . Pass Journals
Q 3. Sudah ltd Issued 50,000 shares . Received 80,000 shares `10 Premium of 30%
Pro Rata 60,000
Application `2 Raj holder of 5,000shares failed to pay allotment and
calls
Allotment `5 Mohan holder of 2500 shares failed to pay calls
I call `2
II call Balance
All shares are forfeited and 6000 Reissued at Rs. 10 as fully paid up includes Raj .Pass Journals
.

Q 4.Z ltd Issued 40,000 shares . Received 50,000 shares and Pro rata allotment made for
50,000 shares.
All excess applications are transferred to share allotments
Share value `10
Application `2
Allotment `3
I call `2
II call balance
X the holder of 4000 shares failed to pay Allotment , I call and II call
Y the holder of 2000 shares failed to pay I call and II call
All shares forfeited and 4000 shares reissued at `12 which includes Y fully . Pass
journals

Q5. Ruth Ltd Issued 60,000 shares . Received 80,000 applications Share value `10
Premium of 40% It Returned 10,000 shares and the balance on pro rata .
Application `2
Allotment `7
I call `4
II call Balance
X holder of 6,000shares failed to pay allotment and calls
Y holder of 3,000 shares failed to pay calls
All shares forfeited and 5,000 shares reissued at `9 which includes X 3000 shares and Y 2000
shares. Pass Journals

Q6. Rajesh ltd issued 30,000 shares Received 50,000 shares Share value `10 at premium
of Re 1 Shares allotted on Pro Rata 45,000
Application `2
Allotment `4( pre )
I call Balance
A holder of 4,000shares failed to pay allotment and call
B holder of 3,000 shares failed to pay call
All shares forfeited and 5,000 shares reissued at 11 which includes equally from X and Y .
Pass Journals .
III.WHEN APPLIED SHARES are given
Q1.Issued 30,000 Received 45,000 Returned 5,000 `10 Premium of `5
Application `3
Allotment `8
I Call Balance
X, who applied for 4000 shares failed to pay All and call his shares forfeited
Y the holder of 2000 shares failed to pay call his shares forfeited
4000 shares reissued for ` 36,000 which includes X fully. Pass Journals .

Q2.Issued 50,000 Received 75,000 Returned 5,000 `10 Premium of `3

Application `2
Allotment `7 ( incl premium )
I Call 2
II Call Balance
A, who applied for 7000 shares failed to pay All and calls his shares forfeited
B the holder of 4000 shares failed to pay calls his shares forfeited
8000 shares reissued at Rs. 9 which includes B fully. Pass Journals .

Q3. Issued 25,000 Received 40,000 Returned 5,000 Share value ` 10

Application `2
All `3
I Call `2
II call Balance
X the applicant 3500 shares failed to pay All and Calls, his shares forfeited
Y the holder for 2000 shares failed to pay Calls, his shares forfeited
4000 shares reissued at Rs. 9 per share as fully paid up which includes Y.
Pass journals

Q 4. Issued 50,000 Received 80,000 Returned 10,000 Share value ` 10

Application `2
All `3
I Call `2
II call Balance
X the applicant 7000 shares failed to pay All and Calls, his shares forfeited
Y the applicant for 3500 shares failed to pay Calls, his shares forfeited
6000 shares reissued for `48,000 as fully paid up which includes Y.
Pass journals.
IV.SHARES FORFEITED AFTR ALLOTEMNT or I CALL
Q1.Issued 40,000 Received 60,000 `10 Premium Rs. 3 Prorata 50,000
Application `2
Allotment `7 ( Sec prem included )
I `3
II Balance
X who applied for 5000shares failed to pay allotment and first call and his shares
forfeited . Y the holder of 2000 shares failed to pay I and II call, his shares forfeited
5000 shares reissued at ` 9 including X shares fully . Pass Journals .

Q2. A company Issued 60,000 shares Received 90,000 shares and returned 10,000 shares
Share value `10 at a premium of 20 %
Application `2
Al0lotment `5 ( prem )
I Call `2
II Call Balance
X who applied for 8,000 failed for all and I call, his shares forfeited
Y the holder of 3,000 shares failed to pay I and II call, his shares forfeited
8000 shares Reissued at 9.5 includes X fully . Pass Journals .

Q 3. Issued 50,000 Received 80,000 Returned 10,000 Share value ` 10

Application `2
All `3
I Call `2
II call Balance
X the applicant 7000 shares failed to pay All and I Call, his shares forfeited
Y the holder of 2500 shares failed to pay Calls, his shares forfeited
6000 shares reissued for `48,000 as fully paid up which includes Y.
Pass journals.

Q 4.Issued 5000 Received 7000 pro rata 6000 Share value Rs.100 premium of 5 %

App 15 All 25 I call 10 II call Balance

X applied for 600 shares failed to pay share allotment, and his shares forfeited
Y allotted 400 shares failed to pay the I call and his shares forfeited
Z Applied for 300 shares failed to pay II call and his shares forfeited .
600 shares reissued at Rs.90 which includes 200 shares from each share holders.
Pass Journals
V. SECURITIES PREMIUM IN APPLICATION and WITH OTHER INSTALLEMENTS

Q1.Rajesh ltd issued 30,000 Equity shares of `10 each at a premium of `3.The company
received 45,000 shares and pro rata allotment was made for 40,000 shares .
Application `3(Including Premium of `1)
Allotment `5 (Including Premium of `2)
I call `2
II call Balance
X who applied for 4000 shares failed to pay Allotment and I call, his shares forfeited
Y the holder of 2000 shares failed to pay I call and II call
.Of the forfeited shares 4,000 shares reissued at `9.5 including X shares fully . Pass Journals .

Q2. Garesh Ltd issued `600,000 of Share capital of `10each at a premium of 50 %

The company received 90,000 shares and Pro rata was made for 70,000 shares .
Application ` 4 ( include premium `2 )
Allotment `8 ( include premium `3 )
I call `2
II call - Balance
X applied for 7000 shares failed to pay the allotment and I call, his shares forfeited
Y applied for 3500 shares failed to pay for I and II call, his shares forfeited
Of the forfeited shares 7000 shares reissued at `9 which includes X fully . Pass Journals

Q3.Ashna Ltd invited applications for 5000 equity shares . It received applications for 7,000
shares and pro rata allotment made for 7,000 Shares . Share value `100 premium 50%
Application `30 ( include premium `10 )
Allotment `60 ( include premium `20 )
I call `30 ( include premium `15 )
II call `30 (include premium ` 5 )
X who applied for 700 shares failed for allotment and I call, his shares forfeited
Y applied for 350 shares failed for I and II call, his shares forfeited
Of the forfeited shares 600 shares reissued for `96,000 which includes 400 of X
and 200 of Y. Pass Journals

VI.GROUP SUMS or CATEGORY SUMS

Q 1.Nav Lakshmi Ltd., issued a prospectus inviting applications for 50,000 shares of Rs 10 each.
These shares were issued at par on the following terms:
On application ` 3, On allotment `4, on first call `2, final call the balance.
Applications were received for 60,000 shares.
Allotments were made on the following basis:
(i)To applicants for 10,000 shares – in full.
(ii)To applicants for 20,000 shares – 15,000 shares.
(iii)To applicants for 30,000 shares – 25,000 shares.
All excess amount paid on application is to be adjusted against amount due on allotment .
X the holder of 2500 shares failed to pay allotment and calls money who belongs to group 3.
All the shares on which calls were not paid were forfeited by the Board of Directors and
60 % of the shares were reissued for the price of `22,500 .Show the journals .

Q2.Sunder td., invited applications for 1,00,000,Equity shares of `20 each. The shares were issued at a
premium of `5per share. The amount was payable as follows:
On application `8 per share (including premium `3) , On allotment ` 10, ( balance premium ) and the
Balance on One call .
Application for 1,50,000 shares were received. Applications for 10,000 shares were rejected and pro
rata allotment was made to remaining applicants on the following basis:

(i) Applicants for 80,000 shares were allotted 60,000 shares; and
(ii) Applicants for 60,000 shares were allotted 40,000 shares.

X, who belonged to the first category having 300 shares, failed to pay allotment and his shares were
forfeited .Y who belonged to the second category applied for 300 shares failed to pay the first call
money and his shares were forfeited. The forfeited shares were reissued for `19,000 as fully paid up.
Journals

Q 3 Ramesh Ltd., invited applications for 50,000,Equity shares of `10 each. The shares were issued at
a premium of `3per share. The amount was payable as follows:
On application ` 3 per share (including premium `1) ,
On allotment ` 5 ( Balance premium )
On I call 2
On II call – Balance
Application for 90,000 shares were received. Applications for 10,000 shares were rejected and pro rata
allotment was made to remaining applicants on the following basis:

(i) Applicants for 30,000 shares were allotted 20,000 shares; and
(ii) Applicants for 50,000 shares were allotted 30,000 shares.

X, who belonged to the first category having 3000 shares, failed to pay allotment, I call and his shares
were forfeited .
Y who belonged to the second category applied for 5000 shares failed to pay the calls money and his
shares were forfeited.
Of the forfeited shares 3000 shares were reissued at `9.5 as fully paid up which was taken equally
from X and Y .Pass Journals

Q4.Ketan Mehta Ltd. invited applications for 2,00,000 equity shares of `10 each
`2.50 per share on application on 1st Jan. 2021
`5.00 per share (including premium of `2.50) payable on allotment on 29th February.
`5.00 per share payable on first and final call on June 30,2021
Applications were received for 2,50,000 shares. It was decided:

(a) to refuse allotment to the applicants for 10,000 shares.

 (b) to allot in full in the applicants for 40,000 shares.
(c) to allot balance of the available share pro rata among the other applicants; and
(d) to utilise excess application money in part payment of allotment money.
Amir khan who belongs to the pro rata group applied for 2,000 shares failed to pay allotment
and calls his shares are forfeited .
Sharukh Khan to whom shares had been allotted in full did not pay the amount due on call,
and his 2,000 shares were forfeited. 3000 shares were re-issued, on 31 August 2021 at ` 9
fully paid includes Amir fully .Give journal entries to record the above .

Q5.Anita Export House Ltd issued a prospectus inviting applications for `500,000 shares of `10
each at a Premium of 20 %. The share was payable as follows:
`2 on application; `5 on allotment ( include securities premium ) ; balance on one call.
Applications were received for 1,00,000 shares . Allotments were made as follows:

i. To applications for 15,000 shares - Nil

ii. To applications of 10,000 shares - in full
iii. To applications for 25,000 shares - 15,000
iv. To allot the balance on the available shares on pro rata basis among the
others
All excess amount paid in applications is to be adjusted against amount due on allotment.
A member in the pro rata group(fourth group) who applied for 2,000 shares, failed to pay
the allotment and hence his shares were forfeited after allotment .
B , who applied for 2,500 in the 3 group failed to pay first call money his share forfeited
after I call first call . Out of the forfeited shares, 2500 shares were reissued as fully paid
@ ` 9 per share which includes full shares of A . Pass the journal entries .

Q6.Japan Ltd. invited applications for 20,000 shares of `10 each payable as `2.50 on
application, `4.50 (including `1.50 premium) on allotment and balance on call. Applications
were received for 36,000 shares and it was decided to deal with the same as follows in
consultation with Stock Exchange Authorities:
(a) to refuse allotment to an applicant for 6000 shares.
(b) to allot in full to an applicant for 5000 shares.
(c) to allot the remaining shares on a prorata basis among other applicants.
(d) to utilise the surplus received on application in part payment of amount due on
allotment.
All shareholders, except the following, paid all their sum when due.
i) Mr. X, to whom 1500 shares were allotted ( Pro rata group),did not pay anything
after application
ii) Mr.Y, who applied for 3000 shares, did not pay anything after allotment ( pro rata
group
iii) Mr.Z paid his call money with allotment for 2000 shares
X shares forfeited after allotment and Y share forfeited after I call .2000 share reissued at
Rs. 8.5 which was taken equally from X and Y .Pass Journals .
© David Thomas