Read the passage given below and answer the question:
K Ltd. invited applications on 3000 Equity Shares of ₹100 each at a premium of ₹20. For application ₹50, on allotment ₹50 and on final call ₹20. Application also includes premium amount. Total application received 4,000 and allotted on prorata basis and excess amount adjusted towards allotment. One shareholder holding 600 shares did not pay allotment money but paid it with final call that was made after 2 months of allotment. Final call amount received in full.
Calculate the amount adjusted in share allotment account.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹50,000
Application money received = 4,000 × ₹50 = ₹2,00,000
Application money due on shares allotted = 3,000 × ₹50 = ₹1,50,000
Excess adjusted in Share Allotment Account = ₹2,00,000 − ₹1,50,000 = ₹50,000
No application was rejected outright: every applicant got shares pro rata, so the whole excess is kept and set off against allotment.