Question

VL Ltd. offered for public subscription 90,000 equity shares of ₹ 10 each at a premium of 10%. The entire amount was payable on application. Applications were received for 1,00,000 shares, and allotment was made to all the applicants on a pro-rata basis. The amount received on application was ______.

Options

• ₹ 10,00,000

• ₹ 9,00,000

• ₹ 9,90,000

• ₹ 11,00,000

Answer 1

VL Ltd. offered for public subscription 90,000 equity shares of 710 each at a premium of 10%. The entire amount was payable on application. Applications were received for 1,00,000 shares, and allotment was made to all the applicants on a pro-rata basis. The amount received on application was ₹ 11,00,000.

Explanation:

Amount received on application = `1,00,000 × (10 + 10/100 xx 10)`

= 1,00,000 × 10 + 1

= 1,00,000 × 11

= ₹ 11,00,000