Free PDF Download for Class 12 Solutions Available on Vedantu
FAQs on TS Grewal Solutions: Accounting for Share Capital (Chapter 8)
1. Where can I find reliable, step-by-step solutions for TS Grewal's Class 12 Accountancy Chapter 8 (Accounting for Share Capital) for the 2025-26 session?
Vedantu provides comprehensive, step-by-step solutions for all questions in TS Grewal's Class 12 Accountancy Chapter 8, 'Accounting for Share Capital'. Our solutions are crafted by expert accountants and are fully updated for the CBSE 2025-26 syllabus, ensuring you get the correct methods for journal entries, ledger accounts, and Balance Sheet presentation.
2. How do I solve questions on pro-rata allotment of shares from TS Grewal Chapter 8?
Solving questions on pro-rata allotment requires a systematic approach, which is detailed in our solutions. The key steps are:
Calculate the application money received: Total applications × Application money per share.
Determine the amount to be transferred to Share Capital: Shares allotted × Application money per share.
Calculate excess application money: This is the difference between money received and money transferred to Share Capital.
Adjust the excess money: First against Share Allotment, and if any surplus remains, against Share Calls (or refunded if specified). Preparing a working table is highly recommended to ensure accuracy.
For detailed examples, you can refer to our Accounting for Share Capital notes.
3. What is the correct journal entry for the forfeiture of shares that were originally issued at a premium?
When shares issued at a premium are forfeited, the treatment of the Securities Premium Account depends on whether the premium has been received. Our TS Grewal solutions explain this with two scenarios:
If the premium has been received: The Securities Premium Account is not debited at the time of forfeiture, as a premium once received cannot be cancelled.
If the premium has not been received: The Securities Premium Account must be debited to cancel the premium that was due but not paid. The journal entry would be:
Share Capital A/c (Dr.) [With amount called-up]
Securities Premium A/c (Dr.) [With unpaid premium amount]
To Share Forfeiture A/c [With amount already received]
To Calls-in-Arrears A/c [With total unpaid amount]
4. How should Share Capital be disclosed in a company's Balance Sheet as per Schedule III, which is covered in TS Grewal solutions?
As per Schedule III of the Companies Act, 2013, Share Capital is shown under the head 'Equity and Liabilities' in the Balance Sheet. The disclosure is made in the Notes to Accounts with the following details:
Authorised Capital: The maximum capital the company is authorised to issue.
Issued Capital: The part of authorised capital offered to the public for subscription.
Subscribed Capital: The part of issued capital that has been subscribed by the public. This is further divided into 'Subscribed and fully paid-up' and 'Subscribed but not fully paid-up'.
Calls-in-Arrears are deducted from the subscribed capital, and Forfeited Shares Account is added.
For a complete guide on presentation, see our notes on the Disclosure of Share Capital in the Balance Sheet.
5. Why is the balance in the Share Forfeiture Account transferred to the Capital Reserve upon re-issue of those shares?
The amount in the Share Forfeiture Account represents a gain on the forfeited shares. This gain is not operational but a capital gain because it arises from a capital transaction (issue of shares). Upon the successful re-issue of these shares, the gain becomes realised. As per accounting principles, all capital gains that are realised must be transferred to a Capital Reserve. This reserve is not available for dividend distribution but can be used for purposes like writing off capital losses or issuing bonus shares.
6. What is the accounting treatment for 'Issue of Shares for Consideration other than Cash' in TS Grewal problems?
When a company acquires assets (like machinery or a business) and issues shares instead of paying cash, the accounting involves two main steps:
Record the purchase of assets:
Sundry Assets A/c (Dr.)
To Vendor's A/cRecord the issue of shares to the vendor:
Vendor's A/c (Dr.)
To Share Capital A/c
To Securities Premium A/c (if shares are issued at a premium)
The number of shares to be issued is calculated by dividing the purchase consideration by the issue price per share.
7. What is the fundamental difference between Calls-in-Arrears and Calls-in-Advance, and how are they treated in the accounts?
Calls-in-Arrears represents the amount called up by the company but not yet paid by shareholders. It is shown as a deduction from 'Subscribed but not fully paid-up' capital in the Notes to Accounts. The company may charge interest on this amount.
Calls-in-Advance is the amount received from shareholders before the company has officially made the call. It is a liability for the company and is shown under 'Current Liabilities' on the Balance Sheet. The company may pay interest on this amount. Our TS Grewal solutions provide clear journal entries for both scenarios.
