Question

Boyle Ltd. issued 40,000 shares of ₹10 each. Applications for 2,00,000 shares were received. Amount per share was payable as follows:

On application	₹4
On allotment	₹4
On first and final call	Balance

Shares were allotted on pro rata basis to all the applicants. Excess money received with applications was refunded after adjustment in allotment and first and final call. For refunding the excess amount, the Bank Account will be credited by:

Options

• ₹4,80,000

• ₹4,00,000

• ₹80,000

• Nil

Answer 1

₹4,00,000

Explanation:

Shares issued = 40,000
Face value = ₹10 each
Applications received = 2,00,000
Application money = ₹4 per share
Application money received = 2,00,000 × 4 = ₹8,00,000

Application required = 40,000 × 4 = ₹1,60,000

Excess = 8,00,000 − 1,60,000 = ₹6,40,000

Allotment due = 40,000 × 4 = ₹1,60,000

First & Final Call due = 40,000 × 2 = ₹80,000

Total future dues = 1,60,000 + 80,000 = ₹2,40,000

Refund = 6,40,000 − 2,40,000

= ₹4,00,000