Question

Apple Tree Ltd. issued 50,000 Equity Shares of ₹ 10 each at par for subscription payable ₹ 3 on Application, ₹ 4 on Allotment and ₹ 3 as First and Final call. Excess application money was to be adjusted against allotment and call.

It received applications for 1,45,000 Equity Shares. Applicants for 20,000 Equity Shares were refused allotment and remaining applicants were allotted shares on pro rata basis. The amount that the company credits to Calls-in-Advance Account will be

Options

• ₹ 2,25,000.

• ₹ 25,000.

• ₹ 1,75,000.

• Nil.

Answer 1

₹ 25,000.

Explanation:

Application money from applicants considered for allotment:

1,25,000 × ₹ 3 = ₹ 3,75,000

Application money required:

50,000 × ₹ 3 = ₹ 1,50,000

Excess = ₹ 2,25,000. After adjusting allotment of 50,000 × ₹ 4 = ₹ 2,00,000, the balance ₹ 25,000 is credited to Calls-in-Advance A/c.