Issue of shares: amounts due and premium: Class 12 practice
Shares may be issued at a premium (above face value). Read the method, follow the three worked examples, then try the six questions.
What you should know first
- Multiplication
The idea behind issue of shares: amounts due and premium
Shares may be issued at a premium (above face value). The premium is credited to Securities Premium and usually collected with allotment. Amount due on each call = number of shares × amount per share.
Step-by-step method
- Shares × face value = share capital.
- Shares × premium = securities premium.
- Split amounts by application, allotment, calls.
Worked example 1 (Basic)
9000 shares of ₹10 each are issued at ₹2 premium: ₹3 on application, ₹7 on allotment (including premium), ₹2 on call. Find the share capital and securities premium.
- Share capital = 9000 × 10 = ₹90,000
- Premium = 9000 × 2 = ₹18,000
- Allotment = 9000 × 7 = ₹63,000
- Total = ₹1,08,000
- Answer: ₹90,000 capital, ₹18,000 premium
Worked example 2 (Standard)
13000 shares of ₹100 each are issued at ₹10 premium: ₹30 on application, ₹60 on allotment (including premium), ₹20 on call. Find the amount received on allotment.
- Share capital = 13000 × 100 = ₹13,00,000
- Premium = 13000 × 10 = ₹1,30,000
- Allotment = 13000 × 60 = ₹7,80,000
- Total = ₹14,30,000
- Answer: ₹7,80,000
Worked example 3 (Challenge)
2000 shares of ₹10 each are issued at ₹2 premium: ₹3 on application, ₹7 on allotment (including premium), ₹2 on call. Find the total cash received if all money is paid.
- Share capital = 2000 × 10 = ₹20,000
- Premium = 2000 × 2 = ₹4,000
- Allotment = 2000 × 7 = ₹14,000
- Total = ₹24,000
- Answer: ₹24,000
Common mistakes and misconceptions
- Crediting premium to share capital
- Forgetting premium in allotment money
Practice questions
- (Basic) 13000 shares of ₹10 each are issued at ₹2 premium: ₹3 on application, ₹7 on allotment (including premium), ₹2 on call. Find the share capital and securities premium.
- (Basic) 8000 shares of ₹10 each are issued at ₹5 premium: ₹3 on application, ₹10 on allotment (including premium), ₹2 on call. Find the share capital and securities premium.
- (Standard) 18000 shares of ₹10 each are issued at ₹5 premium: ₹3 on application, ₹10 on allotment (including premium), ₹2 on call. Find the amount received on allotment.
- (Standard) 10000 shares of ₹100 each are issued at ₹10 premium: ₹30 on application, ₹60 on allotment (including premium), ₹20 on call. Find the amount received on allotment.
- (Challenge) 4000 shares of ₹100 each are issued at ₹10 premium: ₹30 on application, ₹60 on allotment (including premium), ₹20 on call. Find the total cash received if all money is paid.
- (Challenge) 7000 shares of ₹10 each are issued at ₹2 premium: ₹3 on application, ₹7 on allotment (including premium), ₹2 on call. Find the total cash received if all money is paid.
Answer key with full working
- Q1: Share capital = 13000 × 10 = ₹1,30,000 → Premium = 13000 × 2 = ₹26,000 → Allotment = 13000 × 7 = ₹91,000 → Total = ₹1,56,000 → Answer: ₹1,30,000 capital, ₹26,000 premium
- Q2: Share capital = 8000 × 10 = ₹80,000 → Premium = 8000 × 5 = ₹40,000 → Allotment = 8000 × 10 = ₹80,000 → Total = ₹1,20,000 → Answer: ₹80,000 capital, ₹40,000 premium
- Q3: Share capital = 18000 × 10 = ₹1,80,000 → Premium = 18000 × 5 = ₹90,000 → Allotment = 18000 × 10 = ₹1,80,000 → Total = ₹2,70,000 → Answer: ₹1,80,000
- Q4: Share capital = 10000 × 100 = ₹10,00,000 → Premium = 10000 × 10 = ₹1,00,000 → Allotment = 10000 × 60 = ₹6,00,000 → Total = ₹11,00,000 → Answer: ₹6,00,000
- Q5: Share capital = 4000 × 100 = ₹4,00,000 → Premium = 4000 × 10 = ₹40,000 → Allotment = 4000 × 60 = ₹2,40,000 → Total = ₹4,40,000 → Answer: ₹4,40,000
- Q6: Share capital = 7000 × 10 = ₹70,000 → Premium = 7000 × 2 = ₹14,000 → Allotment = 7000 × 7 = ₹49,000 → Total = ₹84,000 → Answer: ₹84,000
Syllabus note
This skill is listed under "Accounting for Share Capital" for Class 12 in the NCERT/CBSE books. ICSE, IGCSE, IB and state boards may teach it in a different chapter or year.
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.
Related practice and notes
Frequently asked questions
Which chapter is issue of shares: amounts due and premium in?
"Accounting for Share Capital", Class 12 Accountancy (NCERT/CBSE). Other boards may place it differently.
How were the answers checked?
Answers on this page are generated and automatically re-checked by a second, independent calculation. They have not been reviewed by a teacher — if you spot a problem, tell us on WhatsApp.