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 10,000 shares. The allotment was made pro-rata. How much amount will be received in cash on the allotment?

Rs. 8,000

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Rs. 12,000

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Nil

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Rs. 15,000

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Solution

The correct option is C
Nil

Application money received = 100003 = 30,000

Shares Allotted= 4,000

i.e., 1 share is allotted for every 2.5 shares applied

Application money due= 4,00030= Rs. 12,000

Excess money = Rs. 30,000-Rs. 12,000 = Rs. 18,000

Allotment money due = 4,000*2 = 8,000

As excess money is greater than allotment money we don't need to receive anything for allotment.

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Similar questions

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.

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.

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