R.Ltd invited applications for 15,000 shares of ₹10 each at premium of ₹2 per share. The amount was payable as follows:
On Application ₹4, On allotment ₹5
On Ist call ₹2, and on final call ₹1
Applications were received for 20,000 shares. Application of 2,000 shares were rejected. Mohan, who applied for 3,000 shares was allotted in full and prorata allotment was made to the remaining applicants. All money was fully received with the exception of first call and final call on 3,000 shares held by Hari. These shares were forfeited and subsequently re-issued @ ₹8 per share.
On the basis of the above information answer the question.
Calculate the total amount received on share allotment.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → ₹63,000
The excess application money of the pro-rata applicants is adjusted towards allotment, so less cash is received on allotment:
Amount due on allotment = 15,000 × ₹5 = ₹75,000
Pro-rata applicants: applied for 20,000 − 2,000 − 3,000 = 15,000 shares, allotted 15,000 − 3,000 = 12,000 shares
Excess application money = 3,000 × ₹4 = ₹12,000, adjusted on allotment
Cash received on allotment = ₹75,000 − ₹12,000 = ₹63,000