Question

A company issued 4,000 equity shares ₹10 each at par payable as under: On application ₹3; on allotment ₹2; on first call ₹4 and on final call ₹1 per share.
Applications were received for 10,000 shares. Allotment was made pro-rata. How much amount will be received in cash on allotment?

विकल्प

• ₹8,000

• ₹12,000

• Nil

• None

Answer 1

Nil

Explanation:

Application Money Received

10,000 shares × ₹3 = ₹30,000

Application required for 4,000 shares = 4,000 × ₹3 = ₹12,000

Excess application money = ₹18,000

Allotment due = 4,000 × ₹2 = ₹8,000

Excess application money (₹18,000) is more than enough to cover allotment (₹8,000).

So, no cash will be received on allotment because it is fully adjusted from application excess.