Question

A company issued 5,000 equity shares of 50 each at par payable as to : 20 on application ; * 25 on allotment and 05 on Call Applications were received for 8,000 shares. Allotment was made on pro-rata. How much amount will be received in cash on allotment?
(a) 65,000
(b) 25,000
(c) 60,000
(d) 1,25,000 ​

Answer 1

Answer:

(a) 65,000

Explanation:

Amount received on Application =  $20*8000=1,60,000$

Share capital for Application = $20*5000=1,00,000$

Amount of money received on Application adjusted with Allotment =

Amount received on Application - Share Capital for Application

⇒ $1,60,000-1,00,000= 60,000$

Now,

Amount due on allotment = $25*5,000=1,25,000$

Money received on allotment=

Amount due on allotment - Amount of application adjusted with allotment

⇒ $1,25,000-60,000=65,000$