Read the following passage and answer the question.
EFG Ltd. invited applications for 10,000 shares of ₹100 each at a premium of 10 each which is payable as follows-
Application - ₹50
Allotment - ₹35 including premium
Call - ₹25
Applications for 15,000 shares is received by the company. The company rejected the applications for 2,500 shares and made pro-rata on the remaining applicants. Mr. A who is allotted 400 shares failed to pay the allotment and call money due to which company forfeited his shares and reissued at ₹105 per share.
How much money is adjusted towards allotment?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹1,25,000.
Money received by the company = 15,000 shares x 50
= ₹7,50,000
Application rejected = 2,500 shares
Refunded amount = 2,500 x 50
= ₹1,25,000
Amount transferred to share capital A/c = 10,000 shares x 50
= ₹5,00,000
Money adjusted towards allotment = 7,50,000 - 1,25,000 -5,00,000
= ₹1,25,000