A company issued 5 000 equity shares of Rs100 each at par payable as to Rs40 on application Rs50 on ...........

General Accounting Principles Accounting for Shares

A company issued 5.000 equity shares of Rs100 each at par payable as to :

Rs40 on application; Rs50 on allotment and Rs10 on call.

Applications were received for 8,000 shares. Allotment was made on pro-rata. How much amount will be received in cash on allotment?

Rs 2,50,000

Rs 1,20,000

Rs 1,30,000

Rs 50,000

- The company received applications for 8,000 shares, but only issued 5,000 shares.

- Each share required ?40 on application, but with pro-rata, only 5/8th of applications were accepted.

- Excess funds from surplus applications will adjust with allotment.

- Excess from 3,000 unallotted shares = 3,000 shares × ?40 = ?1,20,000.

- Allotment money required = 5,000 shares × ?50 = ?2,50,000.

- Actual cash needed on allotment = Allotment money due - Excess from applications.

- Thus, cash received on allotment = ?2,50,000 - ?1,20,000 = ?1,30,000.

Correct Answer: Option 3 - ?1,30,000

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