Question

Ceilo Ltd. invited appications for 28,000 (c) Non-Cumulative preference shares shares. Applications for 35,000 shares are received. The company rejected 5,000 shares and gave full allotment to applicants of 8,000 shares, and prorata allotment was given of rest of the applicants in the ratio​

Answer 1

Answer:

ans:11:10

Explanation:

• APPLIED - ALLOTTED

• 5000         -  NIL

• 8000         -  8000
• 22000       -  20000

Answer 2

Given:

Applications invited=28,000 shares

Applications received=35,000 shares

Applications rejected=5,000 shares

Applications fully allotted=8,000 shares

To find:

The ratio of pro-rata allotment of the remaining shares

Solution:

The ratio of pro-rata allotment of the remaining shares is 11:10.

We can find the ratio by following the steps given below-

We know that the company has received more applications than it invited.

So, the shares after rejection and full allotment will be distributed in a specific ratio.

We know that Ceilo Ltd. invited 28,000 share applications.

Applications received=35,000 shares

Applications rejected=5,000 shares

So, the remaining applications that will be allotted=Applications received -Applications rejected

=35,000-5,000

=30,000

Now, out of these, 8,000 shares were fully allotted.

So, the applications that will be allotted=30,000-8,000

=22,000

Also, after full-allotment, remaining applications that were invited to be allotted=28,000-8,000=20,000

For 22,000 applications, 20,000 are to be allotted on a pro-rata basis.

The pro-rata ratio of allotment=Applications that will be allotted/ Applications invited to be allotted

=22,000/20,000

=22/20

=11/10

Therefore, the ratio of pro-rata allotment of the remaining shares is 11:10.