Accountancy Part AAccounting for Shares

Total applications received are for :

Raj Ltd. was registered with 70,000 equity shares. They issued 40,000 equity shares @ 10 each payable as follow :
On Application Rs. 4 per share
On Application Rs. 3 per share
and Balance on 2 calls
The issue was over subscribed by 50,000 shares. The directors decided upon making prorata allotment to 60,000 shares while remaining were returned.

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → 90,000 shares

An issue is over-subscribed when applications are received for more shares than are offered. Applications = shares offered + excess.

Applications = 40,000 + 50,000 = 90,000 shares

NCERT (2026-27 edition):
Over Subscription – “There are instances when applications for more shares of a company are received than the number offered to the public for subscription. This usually happens in respect of shares issue of well-managed and financially strong companies and is said to be a case of ‘Over Subscription’.”