Answer based on following passage.
Earn Limited, with an authorised capital of ₹10,00,000 divided into equity shares of ₹ 10 each, issued 50,000 equity shares at a premium of ₹3 per share payable as follows.
On application - ₹3 per share
On allotment - ₹5 per share (including Premium)
On first and final call- Balance amount.
Applications were received for 60,000 shares. The Directors allotted the shares to all applicants on pro-rata basis. All money received except the first and final call on 1,000 shares issued to Ravi.
Identify the number of shares applied by Ravi.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 1,200 shares
Shares applied = 60,000; shares allotted = 50,000; allotment was pro rata to all applicants.
Pro-rata ratio (applied : allotted) = 60,000 : 50,000 = 6 : 5
Ravi was allotted 1,000 shares, so shares applied by him = 1,000 × 6/5 = 1,200 shares