Read the following passage carefully and answer the questions.
X Ltd. issued 30,000 shares to the public having Face value ₹100 at 10% premium. Money is receivable as follows:
Application = ₹40 (including premium)
Allotment = ₹45
First and Final call = Remaining amount
The public applied for 50,000 shares. The company rejected application for 10,000 shares and made a pro rata allotment to the rest of the applicants. A shareholder applying for 400 shares, didn't pay the allotment and call money and his allotted shares were forfeited by the company. Later, the forfeited shares were reissued at ₹80 each as fully paid.
What amount is to be refunded while allotting shares on a Pro-rata basis?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹4,00,000
This is the case where some applications are rejected outright and the rest get a pro-rata allotment. Only the money on the rejected applications is refunded; the extra money paid by the pro-rata applicants is kept and adjusted towards the allotment money.
Applications rejected = 10,000 shares
Application money = ₹40 a share
Refund = 10,000 × ₹40 = ₹4,00,000
The other 40,000 applicants paid for 10,000 shares more than they got (another ₹4,00,000), but that sum is adjusted against what they owe on allotment, not refunded.
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
