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.

Rs. 6,000

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Nil

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Rs. 16,000

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Rs. 10,000

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Solution

The correct option is A
Rs. 6,000

Application money received = 10,0003 = Rs. 30,000

Application money for 4000 shares = 4,0003 = Rs. 12,000

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

Adjustment for Allotment money = 4,0002 =Rs. 8,000

Adjustment for first call money = 18,000 - Rs. 8,000 = Rs. 10,000

First Call money due = 4,000 4= Rs. 16,000

Amount received in first call = Rs. 16,000-Rs. 10,000 = Rs. 6,000

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

Q. Gas Ltd. issued 1,00,000 equity shares of Rs.10 each payable as follows. Rs.3 on application, Rs.3 on allotment, Rs.2 on first call and Rs.2 on second and final call. The Company received application for 1,50,000 shares.
The allotment was made as under.
Applicants for 50,000 shares were allotted in full. Applicants for 80,000 shares were allotted 50,000 shares on pro-rata basis and applicants for 20,000 shares were rejected. The amount of excess application money available for adjustment against allotment is:

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
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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.

Q. The Orient Company offered for public subscription 20,000 equity shares of Rs.10 each at a premium of 10% payable at Rs.2 on application; Rs.4 on allotment including premium; Rs.3 on first call and Rs.2 on second and final call. Applications for 26,000 shares were received. Applications for 4,000 shares were rejected. Pro-rata allotment was made to the remaining applicants. Both the calls were made and all the money were received except the final call on 500 shares which were forfeited. 300 of the forfeited shares were later on issued as fully paid at Rs. 9 per share. Give journal entries and prepare the balance sheet.

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