Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

A company issued 4,000 equity shares of ₹10 each at par payable as under :
On application ₹3; on allotment ₹2; on first call 4 and on final call ₹1 per share.
Applications were received for 13000 shares. Applications for 3000 shares were rejected and pro-rata was made on the remaining shares.

How much amount was received on first call in cash?

Options:

₹5000

₹5500

₹6000

₹6500

Correct Answer:

₹6000

Explanation:

Amount received on application = 10000 X 3 = ₹30000
Amount should be on the application = 4000 X 3 = ₹12000
The excess amount received that will be adjusted towards allotment and calls= 30000 - 12000 = ₹18000
Amount due on allotment = 4000 X 2 = ₹8000
Excess amount left after adjusted in allotment money = 18000-8000= ₹10000
Amount due on first call = 4000 X 4 = ₹16000
Amount received on first call in cash after excess money adjusted=  16000 - 10000 = ₹6000