Question

A Company issued 50,000 shares of ₹20 each at 5% premium. ₹10 were payable on application and balance on allotment. What will be the allotment amount?
(A) ₹5,00,000
(B) ₹4,75,000
(C) ₹5,50,000
(D) ₹5,25,000

#Explain with solution.​

Answer 1

Issued share 50000 @20 each
At 5% premium =20*5/100=1
On application =50000*10=500000
On allotment =50000*11=550000

So c is the correct one!!

Answer 2

The allotment amount would be Option (C): INR 5,50,000

Explanation:

It has been mentioned that the company has issued 50,000 shares at INR 20 each with a 5% premium.

Premium calculation: 20×5/100≅1

INR 10 is being paid at the time of application: 50,000×10≅5,00,000

Hence, the allotment amount would be: 50,000×11≅5,50,000