A company allotted 10,000 shares to applicants of 14,000 shares on a pro-rata basis. The application was for ₹2 per share. A shareholder applied for 420 shares. How much amount will be adjusted against allotment and calls money?

₹240

The correct answer is option 1- ₹240.

Who applied for 14,000 shares got 10,000 shares
Who applied for 420 shares got = 10000/14000 X 420
                                                   = 300 shares

Amount received on application = 420 X 2
                                                  = ₹840

Amount should be received on application on allotted shares = 300 X 2
                                                                                                 = ₹600

Excess amount adjusted against allotment and call = 840 - 600
                                                                                 = ₹240