Give answer on the basis of Information given below.
Poonam Ltd. invited applications for 5,00,000 shares of ₹10 each @10% premium payable as follows:
Application - ₹3
Allotment - ₹5 [including premium]
1st and final call - balance
Applications were received for 6,60,000 shares. Applications for 60,000 shares were rejected and pro-rata allotment was made as follows:
(a) 4,00,000 shares - full
(b) 2,00,000 shares - 50%
Mr. Aman, who was allotted 500 shares under category (a), paid full amount along with allotment money. Whereas another shareholder, Mr. Rahul, who was allotted 1000 shares under category (b) failed to pay the allotment money. His shares were subsequently forfeited. These shares were reissued at ₹14 per share as ₹7 paid up. Final call has not yet been made.
Amount received on application:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → ₹19,80,000
Application money is received on every share applied for, including the 60,000 shares whose applications were later rejected.
Amount received on application = 6,60,000 × ₹3 = ₹19,80,000
The ₹1,80,000 on rejected applications is refunded and the ₹3,00,000 excess of category (b) is adjusted to allotment later; neither changes what was received on application.