Read the following passage and answer the question.
EFG Ltd. invited applications for 10,000 shares of ₹100 each at a premium of 10 each which is payable as follows-
Application - ₹50
Allotment - ₹35 including premium
Call - ₹25
Applications for 15,000 shares is received by the company. The company rejected the applications for 2,500 shares and made pro-rata on the remaining applicants. Mr. A who is allotted 400 shares failed to pay the allotment and call money due to which company forfeited his shares and reissued at ₹105 per share.
How much money is received on allotment by the company?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹2,16,000.
Total amount due on allotment = 10,000 x 35
= 3,50,000
Excess amount received on application (2,500 x 50) = 1,25,000
Amount not received by the shareholder A = 9,000
Amount received by the company = 3,50,000 - 1,25,000 - 9,000
= ₹2,16,000
NOTE-
Who allotted 10,000 shares applied for 12,500 shares
Shares allotted to A = 400
Shares applied by A = 12,500/10,000 x 400
= 500
Money received on application by A = 500 x 50
= ₹25,000
Excess money received by A on application = 100 x 50
= 5,000
Money due on allotment by A = 400 shares x 35
= 14,000
Excess money adjusted to allotment = 5,000
Money not received by A on allotment = 14,000 - 5,000
= ₹9,000