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Cheat sheet · Class 12 · CBSE · Commerce Accountancy

Accounting for Share Capital cheat sheet

The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.

CBSE Class 12 · Accountancy

Cheat sheet

Chapter 5Accounting for Share Capital

Authorised ≥ Issued ≥ Subscribed ≥ Called-up ≥ Paid-up.

1. Share Capital Hierarchy

  • Authorised (registered) capital.
  • Issued, subscribed, called-up, paid-up.
  • Reserve capital: callable only on winding up.

2. Issue of Shares

StageEntry
Application receivedBank Dr, To Share Application
Transfer to capitalShare Application Dr, To Share Capital
Allotment dueShare Allotment Dr, To Share Capital (+ Securities Premium)
Call dueShare Call Dr, To Share Capital

Premium can be used only as per Sec 52 of the Companies Act 2013 (e.g. bonus shares, writing off preliminary expenses).

3. Over-subscription

  • Reject some applications (refund).
  • Pro-rata allotment; excess adjusted against allotment/calls.

4. Forfeiture & Reissue

  • Forfeiture: Share Capital Dr (called-up), To Unpaid calls, To Forfeited Shares (amount paid).
  • Reissue at discount up to forfeited amount; balance of Forfeited Shares → Capital Reserve.

5. Key Points

  • Calls in arrears / in advance.
  • Private placement and ESOPs.
  • Shares can't be issued at discount (except sweat equity).
  • Minimum subscription: 90%.

Remember: Capital levels | entries | pro-rata | forfeiture & reissue

Accounting for Share Capital: questions and notes

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