Question

CAS Ltd. issued 40,000 shares of Rs 10 each at a premium of 20% on May 01 payable as follows:
On application Rs 4.50 (inclusive of premium)
On allotment Rs 2.50
On first and final call Rs 5.00
Mr. X, to whom 2,000 shares were allotted, has paid Rs 10,000 on June 01. At the time of remitting the allotment money, she indicated that the excess money should be adjusted towards the call money. The directors of the company made the first and final call on October 31. The company has a policy of paying interest on calls-in-advance. The amount of interest paid to Mr. X on calls-in-advance = ?

• A. Rs 125
• B. Rs 104
• C. Rs 250
• D. Rs 300

Answer 1

Answer: (A)

Rs 125

Mr. X has paid Rs 10,000 as the allotment money on June 01.

$Moneytobepaidonallotment=No.ofshare\times Allotmentmoney$

Substituting the values in the above equation

$Moneytobepaidonallotment=2000shares\times Rs2.50=Rs5,000$

$Excessmoneyonallotment=AmountReceived-Amountcalledup$

Substitute the values in above equation

$Excessmoneyonallotment=Rs10,000-Rs5,000=Rs5,000$

$Interestpaidoncall-in-advance=Excessmoney\times \frac{interest}{100}\times Timeperiod$

Substitute the values in the above equation

$Interestpaidoncall-in-advance=5000\times \frac{15}{100}\times \frac{6}{12}=Rs125$.