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📚 Complete Accounting for Share Capital Worksheet Practice Guide
This interactive practice worksheet is created for Class 12 Accountancy Part 2 Chapter 1, Accounting for Share Capital. It combines conceptual revision with numerical practice so that students can revise the accounting treatment of issue of shares, share application, allotment, calls, oversubscription, pro-rata allotment, calls in arrears, calls in advance, issue of shares for consideration other than cash, forfeiture and reissue of forfeited shares, and securities premium. The worksheet is designed for repeated practice: students can choose a question count, select a timer, start a test and generate another fresh set through the shuffle feature.
1. Meaning of Share Capital
Share capital represents the capital raised by a company through the issue of shares. A company divides its capital into units known as shares. Shareholders contribute money in accordance with the terms of issue. Accounting for share capital records the amount received or receivable from shareholders and the related stages of issue.
2. Types of Share Capital
Students should understand terms such as authorised capital, issued capital, subscribed capital, called-up capital and paid-up capital. Authorised capital is the maximum capital stated in the company's constitutional documents. Issued capital is the portion offered for subscription. Subscribed capital is the portion taken up by applicants. Called-up capital is the amount demanded on the subscribed shares, while paid-up capital is the amount actually received or treated as received, subject to the applicable adjustments.
3. Issue of Shares
Shares may be issued for cash or for consideration other than cash, subject to the applicable corporate and accounting requirements. In a cash issue, money is commonly received in stages such as application, allotment and calls. Questions may ask for journal entries, amounts due, amounts received, or balances outstanding at each stage.
4. Share Application
When applications are invited, applicants pay the application money specified in the prospectus or issue terms. The company records receipt of application money and subsequently transfers the relevant amount to Share Capital when shares are allotted. Excess application money may be adjusted towards allotment or refunded, depending on the facts.
5. Share Allotment
After applications are considered, shares are allotted to successful applicants. Allotment money becomes due according to the terms of issue. Students should distinguish between the amount due on allotment and the amount actually received. Any excess application money adjusted against allotment should be considered while calculating the net amount receivable.
6. Calls on Shares
The unpaid portion of share capital may be called in instalments known as calls. A question may involve first call, second call or final call. The student should identify the amount per share, the number of shares and the amount already received. Numerical practice often requires calculating the total amount due and the amount actually collected.
7. Oversubscription
Oversubscription occurs when applications received are greater than the number of shares offered. For example, a company offering 50,000 shares may receive applications for 80,000 shares. The company may reject some applications, make proportionate allotment to others, or use a combination of methods according to the terms of the issue and applicable requirements.
8. Pro-Rata Allotment
Under pro-rata allotment, shares are allotted in a proportion to the applications received. If 60,000 shares are applied for and 40,000 are allotted to a group, the ratio is 2:3. This relationship is used to determine the number of shares allotted to an individual applicant. Excess application money may be adjusted towards allotment, making net allotment calculations important.
9. Calls in Arrears
Calls in arrears are amounts called by the company but not received from shareholders by the due date. Questions may provide the number of shares, amount due per share and unpaid amount. Students should calculate the arrears accurately and understand its presentation and accounting treatment.
10. Calls in Advance
Calls in advance occur when a company receives money from a shareholder before the amount has been formally called. It is not normally treated as share capital until the relevant call becomes due. Questions can test the difference between calls in arrears and calls in advance.
11. Securities Premium
When shares are issued at a price above their face value, the excess is known as securities premium. For example, if a ₹10 share is issued at ₹12, the premium is ₹2 per share. Questions may ask for total premium, premium on allotment or the accounting entry for receipt or due of premium. Students should carefully identify the face value and issue price.
12. Issue of Shares at Par
Shares are issued at par when the issue price equals the nominal or face value. If a ₹10 share is issued for ₹10, there is no securities premium. Numerical questions may compare par, premium and other issue situations to test conceptual understanding.
13. Issue of Shares at Premium
When the issue price is higher than face value, the difference is securities premium. The worksheet includes numerical questions where students calculate total issue proceeds, capital component and premium component separately.
14. Shares Issued for Consideration Other Than Cash
A company may issue shares to vendors or other parties in settlement of an asset or service, subject to applicable requirements. The accounting treatment depends on the terms and the value involved. Students should read the question carefully to determine whether the shares are issued at par or premium and whether the consideration is fully settled.
15. Forfeiture of Shares
Forfeiture may occur when a shareholder fails to pay amounts due on shares and the company's articles and applicable rules permit forfeiture. The accounting entry removes the called-up share capital associated with the forfeited shares, reverses relevant unpaid amounts and recognises the amount already received in Share Forfeiture Account, subject to the facts of the question.
16. Share Forfeiture Account
The Share Forfeiture Account generally represents the amount already received on forfeited shares, after considering the applicable accounting treatment. Questions may ask students to calculate the balance credited to Share Forfeiture Account or the amount available for transfer to Capital Reserve after reissue.
17. Reissue of Forfeited Shares
Forfeited shares may be reissued subject to applicable requirements. A company may reissue them at par, at premium or at a discount within the permitted limit linked to the amount forfeited on those shares. Students must compare the reissue price with face value and calculate the resulting discount, if any.
18. Capital Reserve on Reissue
After reissue of forfeited shares, the balance of Share Forfeiture Account relating to the reissued shares, after adjusting any discount on reissue, may be transferred to Capital Reserve. The amount must be calculated only for the shares actually reissued, not automatically for all forfeited shares.
19. Journal Entries
Common journal-entry stages include receipt of application money, application money becoming due or transferred, allotment becoming due, receipt of allotment money, calls becoming due, receipt of calls, forfeiture and reissue. Students should identify the debit and credit accounts logically instead of memorising entries without understanding the underlying transaction.
20. Numerical Answer Questions
This worksheet provides an answer textbox below calculation-based questions. Enter the numerical result and press Check Answer. A correct answer changes the textbox to green, while a wrong answer changes it to red. The system allows a small tolerance for decimal calculations so that reasonable rounding does not unfairly mark an answer wrong.
21. MCQ Practice
MCQs cover definitions, accounting treatment, formulas and application. Options are shuffled every time a question set is generated. Therefore, students cannot depend on the correct answer always appearing in the same option position.
22. Tabulation-Based Questions
Tabulation questions are included to develop calculation and data-organisation skills. A typical table may contain number of shares, face value, issue price, premium, application money, allotment money and calls. Students enter the missing figure and then check the answer.
23. Sub-Part Questions
Multi-part questions combine two or more related calculations. For example, a question may ask for total application money in part (a), excess application money in part (b), and amount adjusted towards allotment in part (c). This format helps students practise longer examination-style problems in manageable steps.
24. Share Issue Calculations
Many problems can be solved by separating the total amount into three components: number of shares, amount per share and stage-wise amount. For example, if 20,000 shares have ₹3 application money per share, application money is 20,000 × ₹3 = ₹60,000. Always identify the number of shares actually involved in the particular stage.
25. Oversubscription Calculations
For oversubscription questions, first determine applications received and shares allotted. Then calculate the pro-rata ratio if applicable. If excess application money is adjusted against allotment, subtract the adjusted amount from the gross allotment due to determine the amount still receivable.
26. Forfeiture Calculations
Forfeiture questions require careful attention to the amount called, the amount received and the amount unpaid. The amount already received on the forfeited shares is relevant to the Share Forfeiture Account. Students should also identify whether securities premium had become due and whether it was received before forfeiture.
27. Reissue Calculations
For reissue questions, compare the reissue price with face value. If reissued below face value, calculate the discount and compare it with the amount originally forfeited on those shares. The remaining eligible forfeiture amount can then be transferred to Capital Reserve.
28. Important Formula Revision
Total issue proceeds = Number of shares × Issue price per share. Securities premium per share = Issue price – Face value. Total securities premium = Number of shares × Premium per share. Application money = Number of shares × Application amount per share. For pro-rata allotment, use the stated application-to-allotment relationship and adjust excess application money according to the question.
29. Timer and Progress Practice
Students can choose from several timer settings or use no timer. The progress bar shows how many questions have been checked. The score updates after the first check of each question. Once every question has been checked, the final result card displays score, total, percentage and attempted count.
30. Show Answer Discipline
The Show Answer control is hidden until Check Answer is pressed. This prevents students from immediately revealing answers and encourages genuine attempts. After checking, the student can use Show Answer for correction and revision.
31. Randomisation and 5000 Questions
The generator uses multiple question templates and randomized values. A uniqueness key is maintained for each worksheet so repeated question instances are avoided. Large tests can contain up to 5,000 generated questions. Shuffle Whole Worksheet starts another fresh randomized test using the selected settings.
32. Exam Preparation Strategy
Begin with definitions and basic share capital classifications. Move to issue at par and premium, then oversubscription and pro-rata allotment. Practise calls in arrears and advance. Finally, devote substantial practice to forfeiture and reissue because these questions combine several accounting adjustments. After completing a topic-wise revision, attempt a mixed timed test.
33. Common Mistakes
Common errors include using applications received instead of shares allotted, forgetting adjustment of excess application money, confusing face value with issue price, incorrectly calculating securities premium, ignoring the amount received before forfeiture, and transferring the wrong portion of Share Forfeiture Account to Capital Reserve. Reading the exact wording of each problem is essential.
34. Student-Friendly Practice Workflow
Use 10–20 questions for quick revision, 50–100 for regular chapter practice, and larger sets for intensive revision. Write full workings in a notebook even when the online worksheet asks only for a final number. Review every wrong question before starting the next test.
35. About This DigiSadhan Tool
This is an original interactive educational practice tool developed for students. It is designed to complement classroom learning and standard Class 12 Accountancy study material. It does not reproduce textbook pages; instead, it generates original practice questions around the chapter's core concepts. The interface is responsive and optimized for mobile users while remaining comfortable on desktops.
36. Final Revision Checklist
Before an examination, revise authorised, issued, subscribed, called-up and paid-up capital; issue at par and premium; application, allotment and calls; oversubscription and pro-rata allotment; calls in arrears and advance; securities premium; issue for consideration other than cash; forfeiture; reissue; and Capital Reserve. Then complete a mixed practice test without using Show Answer until after checking.
37. Start Practising Today
Select the number of questions, timer and difficulty level. Press Start New Test, attempt each question, check the answer and review feedback. When the test is finished, use the result to identify topics that need more revision. Press Shuffle Whole Worksheet to generate another fresh practice set.