Read the following passage and answer the following questions.
BCD Ltd. invited applications for 1,00,000 shares of ₹10 each which is payable as follows-
Application - ₹2
Allotment - ₹3
First and final Call - Balance amount
Applications for 3,00,000 shares is received by the company. Company made pro-rata on the all applicants and adjust excess money towards allotment only. Mr. A shareholder who had applied for 3,000 shares failed to pay call money due to which company forfeited his shares and reissued at ₹8 per share as fully paid.
How much amount is received on allotment by the company?
Answer & explanation
Correct answer: option 4
The correct answer is option 4- Zero.
Amount received on application on 3,00,000 shares = 3,00,000 x 2
= ₹6,00,000
Excess amount received on application on 2,00,000 shares.
Excess amount = 2,00,000 x 2
= ₹4,00,000
Amount due on allotment = 1,00,000 shares x 3
= ₹3,00,000
As excess money is ₹4,00,000 which can be adjusted towards allotment. But money needed on allotment is ₹3,00,000 so ₹1,00,000 will be refunded.
Thus, no amount will be received on allotment.