Question

A company issued 4,000 equity shares of ₹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 13,000 shares. Applications for 3,000 shares were rejected and pro-rata allotment was made to the applicants for 10,000 shares. How much amount will be received in cash on first call? Excess application money is adjusted towards amount due on allotment and calls.

Options

• ₹6,000

• Nil

• ₹16,000

• ₹10,000

Answer 1

₹6,000

Explanation:

Pro-rata on 10,000 applied → 4,000 allotted ⇒ ratio 2 : 5.

10,000 × ₹3 = ₹30,000.

pplication needed for 4,000 shares = 4,000 × ₹3

= ₹12,000 → Excess ₹18,000.

Allotment due = 4,000 × ₹2 = ₹8,000 → adjusted from excess → ₹10,000 excess left.

4,000 × ₹4 = ₹16,000.

Adjust remaining excess ₹10,000 

cash to receive on first call = ₹6,000.