Question

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.
Amount to be refunded on allotment for excess application will be _____.

• A. Rs. 20,000
• B. Rs. 40,000
• C. Rs. 30,000
• D. Rs. 50,000

Answer 1

The correct option is B Rs. 40,000

The amount received on shares issued is Rs 12,00,000. The application money is Rs 2 per share and application received is 1,20,000 then application money received is Rs 2,40,000. But application issued were still 100000 as it is case of over-subscription and hence application money received on issuance of share is Rs 2,00,000. There amount to refunded is Rs 40,000 (Rs 2,40,000-Rs 2,00,000).