Question

Wintex Ltd. issued 6,00,000 shares for subscription against which it received applications for 10,00,000 shares. It made allotment on pro rata basis in the ratio of 2 : 3, i.e., two shares for every three shares applied. Application money refunded will be on

Options

• 1,00,000 shares.

• 2,00,000 shares.

• 3,00,000 shares.

• 4,00,000 shares.

Answer 1

1,00,000 shares.

Explanation:

Pro rata ratio = 2 : 3.

To allot 6,00,000 shares, applications considered are:

`6,00,000 xx 3/2 = 9,00,000` shares

Total applications = 10,00,000 shares.

10,00,000 − 9,00,000 = 1,00,000 shares

Therefore, application money on 1,00,000 shares will be refunded.