Anthony Ltd. invited applications for 2,00,000 shares of Rs. 10 each payable Rs. 3 on application, Rs. 5 on allotment and balance on call. Public had applied for 3,20,000 shares out of which applications for 70,000 shares were rejected and remaining were allotted on pro-rata basis. Determine the amount to be received by company with allotment, if Mohan holding 10,000 shares paid all his dues along with allotment.

Rs. 8,70,000

The correct answer is Option (1) → Rs. 8,70,000

Issued shares = 200000

Applications received = 320000
Application rejected = 70000
Remaining applications = 320000 - 70000
                                  = 250000
Pro-rata is made on these 250000 shares.
For 250000 shares 200000 shares issued.

Excess money received = 50000 shares x 3
                                   = ₹150000

Allotment money due on allotment = 200000 shares x 5
                                                  = ₹1000000

Excess money received on applications adjusted = 1000000 - 150000
                                                                      = 850000 (allotment money received)

* Mohan holding 10,000 shares paid all his dues along with allotment.
Mohan paid calls money = 10000 x 2
                                   = 20000

Amount received on allotment = 850000 + 20000
                                            = 870000