Question

X Ltd. had allotted 20,000 shares to the applicants of 28,000 shares on pro rata basis. The amount payable on application is Rs 2. Mr. P applied for 840 shares. The number of shares allotted and the amount carded forward for adjustment 840 against allotment money due from Mr. P =?

• A. 120 shares; Rs 240
• B. 680 shares; Rs 320
• C. 640 shares, Rs 400
• D. 600 shares; Rs 480

Answer 1

The correct option is D 600 shares; Rs 480

Pro- rata is a situation when amount on excess share is refunded,

$SharesAlloted=\frac{Totalsharesalloted}{Totalsharesapplied}\times Shareappliedbyashareholder$

Substitute the values in above equation

$SharesAlloted=\frac{2000shares}{2800shares}\times 840shares=600shares$

$Adjustmentmoney=MoneyonApplication-Moneytobeusedup$

Substitute the values in above equation

$Adjustmentmoney=Rs2\times 840shares-Rs2\times 600shares=Rs480$.