A company has offered for subscription to the public 10,000 shares of Rs 10 each. It has received applications for 15,000 shares. Company has decided to allot shares on prorata basis. Gunakshi holding 200 shares failed to pay

allotment money and first call money. Her shares were forfeited :

Amount payable was as under :

Rs 2 per share on application.

Rs 3 per share on allotment.

Rs 5 per share on call.

Calculate the amount unpaid on allotment.

Rs 400

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Rs 300

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Rs 200

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Rs 500

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Solution

The correct option is A
Rs 400

Number of shares applied = Total No. of shares applied × shares alloted to Gunakshi

Total No. of shares allotted=15000/10000 × 200 = 300

Excess applications received = 300 – 200 = 100

Excess applications amount received = 100 × 2 = Rs. 200

Amount Due on allotment = 200 × 3 = Rs. 600

Excess application money adjusted = Rs. 200

Net unpaid amount on allotment = Rs 600 – Rs 200 = Rs. 400

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Similar questions

Q. A limited company issued a prospectus inviting application for 2,000 shares of Rs.10 each at premium of Rs. 2 per share payable ass follows:
On application - Rs. 2
On allotment - Rs. 5 (including premium)
On 1st call - Rs. 3
On llnd final call - Rs. 2
Application were received for 3,000 shares and allotment was mad on pro-rata basis to applicant of 2,400 shares. Money received in excess on application was adjusted towards allotment.
Ramesh whom 40 shares were allotted, failed to pay allotment money & first call his shares were forfeited. Find the number of shares Ramesh has applied for?

Himalaya Company Limited issued for public subscription of 1,20,000 equity shares of Rs 10 each at a premium of Rs 2 per share payable as under :

With Application	Rs 3 per share
On allotment (including premium)	Rs 5 per share
On First call	Rs 2 per share
On Second and Final call	Rs 2 per share

Applications were received for 1,60,000 shares. Allotment was made on pro-rata basis. Excess money on application was adjusted against the amount due on allotment.

Rohan, whom 4,800 shares were allotted, failed to pay for the two calls. These shares were subsequently forfeited after the second call was made. All the shares forfeited were reissued to Teena as fully paid at Rs 7 per share.

Record journal entries in the books of the company to record these transactions relating to share capital. Also show the company’s balance sheet.

PRACTICAL PROBLEMS

(Forfeiture of shares issued at par)

Vijay Ltd. issued Rs 40,000 Equity shares of Rs 10 each payable as follows.

On Application	:	Rs 2	On Allotment	:	Rs 3
On First Call	:	Rs 3	On Second Call	:	Rs 2

The company received applications for Rs 50,000 equity shares. Allotment for shares was made on pro rata basis. Share allotment and calls were made and as also received except Raja holding Rs 1,000 shares failed to pay both the calls. His shares were forfeited after second call.

Record the above transactions in books of Vijay Ltd.

Note: Excess money received on share application 10,000 × Rs 2 = 20,000 will be diverted to share allotment A/c.

A company issued 4,000 equity shares of Rs. 10 each at par payable as under :

On application Rs. 3; On allotment Rs. 2; On first call Rs. 4 and on final call Rs. 1 per share

Applications were received for 13,000 shares. Applications for 3,000 shares were rejected and pro-rata allotment was made to the applicants for 10,000 shares. How much amount will be received in cash on the first call? Excess application money is adjusted towards the amount due on allotment and calls.

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