RP Limited was registered with the capital of Rs 8500000 divided into equity shares of Rs 100 each at a premium of 10percernt the company invited application for issuing 25000 shares .the amount was payable as Rs 25 on application Rs 35 on allotment Rs 25 on final call
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Answer:
ACCOUNTANCY
A company invited applications for 25,000 equity shares of Rs 10 each and received 30,000 applications along with the application money of Rs 4 per share. Which of the following alternatives can be followed?
I. Refund the excess applications.
II. Make pro rata allotment to all the applicants, and refund the excess application money.
III. Not to allot any shares to some applicants, full allotment to some of the applicants and pro rata allotment to the rest of the applicants.
IV. Not to allot any shares to some applicants and make pro rate allotment to other applicants.
V. Make pro rata allotment to all the applicants and adjust the excess money received towards call money.
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ANSWER
Oversubscription is the case when a company receives application more than the issued shares.
These extra 5000 shares can be treated in the following ways:
1. The company may refund the amount received on these 5000 excess shares.
2. Prorata allotment can be made in which the shares can be re-adjusted as per the conditions.
3. The company can resolve the problem be rejecting some of the shares, full allotment to some shares and making pro-rata allotment to the rest of the shares.
4. Reject some of the shares and make pro-rata allotment to rest of the shares.
5. The company can even make pro-rata allotment to all shares and the excess money can be used in fulfilling the calls money.