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Application of Shares

The first ins...

Question

The first instalment which the appplicants have to pay along with the applications for shares is known as money.

A

allotment

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B

call

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C

application

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D

prospectus

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Solution

The correct option is C application
Application money is the first instalment which the appplicants have to pay along with the applications for shares.

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Similar questions

The first instalment which the appplicants have to pay along with the applications for shares is known as ___

Q. The Directors of Super Star Ltd. invited applications for 2,00,000 Equity Shares of ₹ 10 each to be issued at 20% premium. The money payable per shares was: on application ₹ 5, on allotment ₹ 4 (including premium of ₹ 2), first call ₹ 2 and final call ₹ 1.

Applications were received for 2,40,000 shares and allotment was made as:
(i) to applicants for 1,00,000 shares

—

in full,
(ii) to applicants for 80,000 shares

—

60,000 shares,
(iii) to applicants for 60,000 shares

—

40,000 shares.

Applicants of 1,000 shares falling in Category
(i) and applicants of 1,200 shares falling in Category
(ii) failed to pay allotment money. These shares were forfeited on failure to pay first call. Holders of 1,200 shares falling in Category
(iii) failed to pay the first and final call and these shares were forfeited after final call.

1,300 shares[1,000 of Category(i) and 300 of Category (ii)] were reissued at ₹ 8 per share as fully paid-up.
Journalise the above transactions. Prepare Cash book and Balance Sheet.

Q. Sony Media Ltd.issued 50,000 shares of ₹ 10 each payable ₹ 3 on application , ₹ 4 on allotment and balance on first and final call . Applications were received for 1,00,000 shares and allotment was made as follows :
(i) Applicants for 60,000 shares were allotted 30,000 shares,
(ii) Applicants for 40,000 shares were allotted 20,000 shares,
Anupam to whom 1,000 shares were allotted from category
(i) failed to pay the allotment money.
Pass journal entries up to allotment .

Q. 'Nigam Limited' invited applications for issuing

15, 000

equity shares of

R s 10

each at a discount of

R s 1

per share. The amount was payable as follows:
On application -

R s 2

per share
On allotment -

R s 3

per share
On first and final call -

R s 4

per share
Applications for

18, 000

shares were received. Shares were issued proportionately to all applicants. Excess money received with applications was adjusted towards sums due on allotment. Ramesh who had applied for

360

share failed to pay allotment, and first and final call money. Naresh to whom

150

shares were allotted failed to pay the first and final call money. Shares of both Ramesh and Naresh were forfeited. Out of the forfeited shares,

200

shares were re-issued at

R s 9

per share as fully paid up. The re-issued shares included all the shares of Naresh.
Pass necessary journal entries for the above transactions in the books of 'Nigam Limited'.

Q. H Limited issued a prospectus inviting applications for 20,000 shares of ₹ 10 each at a premium of ₹ 2 per share payable as follows:
On application ₹ 2 ; on allotment ₹ 5 (including premium) ; on first call ₹ 3 ; on second and final call ₹ 2.

Applications were received for 30,000 shares and pro rata allotment was made on the applications for 24,000 shares. Money overpaid on applications was adjusted against amount due on allotment.

Ramesh, to whom 400 shares were allotted , failed to pay the allotment money and on his subsequent failure to pay first call his shares were forfeited . Mohan , the holder of 600 shares, failed to pay two calls and his shares were forfeited after the second call.

Of the shares forfeited, 800 shares were sold to Krishna credited as fully paid-up for ₹ 9 per share, the whole of Ramesh's shares being included .
Pass journal entries and prepare the Balance Sheet.

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