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

None of the above

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Call Money

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Application money

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Prospectus money

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Solution

The correct option is C
Application money

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

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

Competent Ltd. issued a prospectus inviting applications for 50,000 Equity Shares of ₹ 10 each, payable ₹ 5 as per application (including ₹ 2 as premium), ₹ 4 as per allotment and the balance towards first and final call.

Applications were received for 65,000 shares. Application money received on 5,000 shares was refunded with letter of regret and allotments were made on pro rata basis to the applicants of 60,000 shares. Money overpaid on applications including premium was adjusted on account of sums due on allotment.

Mr. Sharma to whom 700 shares were allotted failed to pay the allotment money and his shares were forfeited by the Directors on his subsequently failure to pay the call money.

All the forfeited shares were subsequently sold to Mr. Jain credited as fully paid-up for ₹ 9 per share.

You are required to set out the Journal entries and the relevant entries in the Cash Book.

Q. X Ltd . issued a prospectus inviting applications for 50,000 Equity Shares of ₹ 10 each, payable ₹ 5 as per application (including ₹ 2 as premium), ₹ 4 as per allotment and the balance towards first and final call.
Applications were received for 65,000 shares. Application money received on 5,000 shares was refunded with letter of regret and allotments were made on pro rata basis to the applicants of 60,000 shares. Money overpaid on applications including premium was adjusted on account of sums due on allotment.
Mr Sharma to whom 700 shares were allotted failed to pay the allotment money and his shares were forfeited by the Directors on his subsequently failure to pay the call money.
All the forfeited shares were subsequently sold to Mr.Jain credited as fully paid-up for ₹ 9 per share .
You are required to set out the journal entries and the relevant entries in the Cash Book.

Q. A Co Ltd. was registered with a nominal capital of ₹ 1,00,000 in Equity Shares of ₹ 10 each. It offered to the public 6,000 shares for subscription . The applications were received for 8,000 shares. The Directors rejected applications for 1,000 shares and returned the money received thereon. The application money received on the other 1,000 shares was adjusted towards allotment money. The amount payable on shares was: ₹ 2 per share on application, ₹ 4 per share on allotment and the balance on first call . One shareholders holding 100 shares failed to pay the first call money and as a result his shares were forfeited .
Pass necessary journal entries and prepare Cash Book to record the above transactions.

Q. A limited company issued a prospectus inviting application for 2,000 shares of Rs.10 each at premium of Rs. 2 per share payable ass follows:
On application - Rs. 2
On allotment - Rs. 5 (including premium)
On 1st call - Rs. 3
On llnd final call - Rs. 2
Application were received for 3,000 shares and allotment was mad on pro-rata basis to applicant of 2,400 shares. Money received in excess on application was adjusted towards allotment.
Ramesh whom 40 shares were allotted, failed to pay allotment money & first call his shares were forfeited. Find the number of shares Ramesh has applied for?

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

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

The correct option is C
Application money

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