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.
Amount to be returned to the applicants due to non-allotment of shares will be :
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 1,20,000
Out of applications for 90,000 shares, allotment was made pro rata to applicants for 60,000 shares; the applications for the remaining 30,000 shares were rejected and their application money is returned in full.
Shares applied for but rejected = 90,000 − 60,000 = 30,000
Money refunded = 30,000 × Rs. 4 = Rs. 1,20,000
The excess money of the pro-rata applicants is not refunded; it is adjusted against the allotment money due from them.
Note: It seems that there is a mistake in the original NTA paper, which prints “On Application Rs. 3 per share” on the second line when it should read “On Allotment Rs. 3 per share”. The question can still be solved, since the first line fixes the application money at Rs. 4 per share and the second instalment is the one due on allotment.
NCERT (2026-27 edition): |