When a company issues shares in open market and the amount is payable in installments. What is the sequence of amount demanded by the company?

A. Money received on calls
B. Money due on calls
C. Allotment money received
D. Application money transferred to Share Capital A/c
E. Allotment money due

Choose the correct answer from the options given below:

D, E, C, B, A

The correct answer is option 2- D, E, C, B, A.

D - Application money transferred to Share Capital A/c: Once the prospectus is made available to the public, individuals interested in subscribing to the company's share capital submit applications along with the required application funds, depositing them in a designated bank as specified in the prospectus. The company must receive a minimum subscription within 120 days from the date of prospectus issuance. The application money is received from the applicants and transferred to the Share Capital Account.

E - Allotment money due: If the minimum subscription is achieved, the company can proceed with the allotment of shares, following certain legal formalities. Letters of allotment are sent to those who have been allocated shares, while letters of regret are sent to those who have not. The allotment of shares establishes a valid contract between the company and the applicants, who then become shareholders.  After the shares are allotted, the company demands the allotment money from the shareholders, which is due for payment.

C - Allotment money received: The shareholders then pay the allotment money, which is received by the company.

B - Money due on calls: The process of making calls is crucial for fully paying up shares and collecting the full share amount from shareholders. After allotment, the company issues calls. If shares are not fully paid up by the end of the allotment process, the directors have the authority to request the remaining payment on the shares as they see fit. The amount that is due on these calls (for further installments) is the final demand that the company makes from the shareholders.

A - Money received on calls: Once the allotment money is received, the company may call for further payments, such as first and second calls, and the money is received on these calls.