Question

Royal Ltd. invited applications for issuing 2,00,000 equity shares of ₹10 each at a premium of 25% payable with application. Applications for 4,50,000 shares were received. Applications for 1,00,000 shares were rejected and money refunded. Pro-rata allotment was made to the remianing applicants. The amount per share was payable as follows: On Application ₹4 per share including premium On Allotment ₹3.50 per share Raghu, who had applied for 7,000 shares failed to pay allotment money. His shares were forfeited immediately after allotment. Afterwards the first and final call was made. Nandan, who had applied for 10,500 shares, failed to pay the first and final call. His shares were also forfeited. Out of the forfeited shares, 7,000 shares were reissued as fully paid up for ₹9 per share including whole of Nandan's shares.

Based on the above information, you are required to answer the following question:

Amount received in cash on allotment will be ______.

विकल्प

• ₹1,00,000

• ₹6,98,000

• ₹98,000

• ₹86,000

Answer 1

Amount received in cash on allotment will be ₹98,000.

Explanation:

1) Excess amount received from Raghu on application:

Shares Allotted to Raghu = `7,000 xx (2,00,000)/(3,50,000) = 4,000`

Excess application money received from Raghu:

7,000 Shares − 4,000 Shares = 3,000 Shares − ₹4 = ₹12,000

2) 

Amount due from Raghu on Allotment:	₹
4,000 Shares × ₹3.50	14,000
Less: Excess received from Raghu on Application	12,000
Allotment money not received from Raghu	2,000

3) 

Total amount due on Allotment: 2,00,000 Shares × ₹3.50	7,00,000
Less: Excess amount received on Application	6,00,000
Balance Due	1,00,000
Less: Amount not received from Raghu on Allotment	2,000
Net amount received on Allotment in Cash	98,000