Raghu Ltd. invited applications for 2,50,000 equity shares of Rs. 25 each payable as under: On Application Rs. 5.00 per share, on Allotment Rs. 7.50 per share, on First Call Rs. 7.50 per share; and on Second and Final Call Rs. 5.00 per share. Applications were received for 5,00,000 shares. The directors decided to make a pro-rata allotment to all the applicants and adjust the excess application money towards the amount due on allotment and to refund the amount remaining thereafter. What amount will be adjusted towards sum due on allotment ?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs. 12,50,000
In a pro-rata allotment, every applicant gets fewer shares than he applied for, and the application money received on the extra shares is first adjusted against the amount due on allotment. Only what is left after covering allotment is refunded.
Application money received = 5,00,000 × Rs. 5 = Rs. 25,00,000
Application money needed on 2,50,000 shares = 2,50,000 × Rs. 5 = Rs. 12,50,000
Excess application money = Rs. 25,00,000 − Rs. 12,50,000 = Rs. 12,50,000
Amount due on allotment = 2,50,000 × Rs. 7.50 = Rs. 18,75,000
The excess (Rs. 12,50,000) is less than the allotment due, so all of it is adjusted: Rs. 12,50,000
Nothing is refunded here, and Rs. 5,62,500 (Rs. 18,75,000 − Rs. 12,50,000) is still to be received on allotment.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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