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.
The amount to be adjusted with the call of allotment will be :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 80,000
In a pro-rata allotment, the excess application money of the allotted applicants is adjusted towards the money due on allotment.
Application money received from applicants for 60,000 shares = 60,000 × Rs. 4 = Rs. 2,40,000
Application money needed on 40,000 shares allotted = 40,000 × Rs. 4 = Rs. 1,60,000
Excess application money = Rs. 80,000
Allotment money due = 40,000 × Rs. 3 = Rs. 1,20,000
The excess (Rs. 80,000) is less than the allotment money due (Rs. 1,20,000), so the whole of it is adjusted: amount adjusted with allotment = Rs. 80,000.
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 it speaks of the allotment and the application money is fixed at Rs. 4 by the first line.
NCERT (2026-27 edition): |