Comprehension
Read the passage given below and answer the questions: Q5 to Q9.
Ram Motors Ltd. invited applications on 3,000 Equity Shares of ₹100 each at a premium of ₹20. For application ₹50 (including premium), on allotment ₹50, and on final call ₹20. Total applications received were 4,000 and allotted on pro-rata basis. Excess application money adjusted towards allotment.
Ram Motors Ltd. invited applications on 3,000 Equity Shares of ₹100 each at a premium of ₹20. For application ₹50 (including premium), on allotment ₹50, and on final call ₹20. Total applications received were 4,000 and allotted on pro-rata basis. Excess application money adjusted towards allotment.
Question: 1
Calculate the amount adjusted in share allotment account.
Calculate the amount adjusted in share allotment account.
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In pro-rata allotment, excess application money is adjusted towards allotment.
Updated On: May 18, 2025
- ₹40,000
- ₹1,10,000
- ₹50,000
- ₹30,000
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The Correct Option is C
Solution and Explanation
Step 1: Calculate total application money received
Total shares applied = 4,000
Application money per share = ₹50
Total application money = \(4,000 \times ₹50 = ₹2,00,000\)
Step 2: Shares allotted on pro-rata basis
Shares to be allotted = 3,000
Pro-rata allotment ratio = \(\frac{3,000}{4,000} = \frac{3}{4}\)
Shares allotted = 3,000
Step 3: Application money for allotted shares
\(3,000 \times ₹50 = ₹1,50,000\)
Step 4: Excess application money
Excess application money \(= ₹2,00,000 - ₹1,50,000 = ₹50,000\)
Step 5: Excess adjusted towards allotment
Amount adjusted in share allotment account is ₹50,000.
Total shares applied = 4,000
Application money per share = ₹50
Total application money = \(4,000 \times ₹50 = ₹2,00,000\)
Step 2: Shares allotted on pro-rata basis
Shares to be allotted = 3,000
Pro-rata allotment ratio = \(\frac{3,000}{4,000} = \frac{3}{4}\)
Shares allotted = 3,000
Step 3: Application money for allotted shares
\(3,000 \times ₹50 = ₹1,50,000\)
Step 4: Excess application money
Excess application money \(= ₹2,00,000 - ₹1,50,000 = ₹50,000\)
Step 5: Excess adjusted towards allotment
Amount adjusted in share allotment account is ₹50,000.
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Question: 2
Calculate the amount received at the time of allotment.
Calculate the amount received at the time of allotment.
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Amount received on allotment = Total allotment money – excess application adjusted.
Updated On: May 18, 2025
- ₹40,000
- ₹1,00,000
- ₹80,000
- ₹70,000
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The Correct Option is B
Solution and Explanation
Step 1: Total allotment money due
Shares allotted = 3,000
Allotment money per share = ₹50
Total allotment money = \(3,000 \times ₹50 = ₹1,50,000\)
Step 2: Less excess application money adjusted
Excess application money adjusted = ₹50,000
Step 3: Amount expected to be received at allotment
\[ ₹1,50,000 - ₹50,000 = ₹1,00,000 \]
Shares allotted = 3,000
Allotment money per share = ₹50
Total allotment money = \(3,000 \times ₹50 = ₹1,50,000\)
Step 2: Less excess application money adjusted
Excess application money adjusted = ₹50,000
Step 3: Amount expected to be received at allotment
\[ ₹1,50,000 - ₹50,000 = ₹1,00,000 \]
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Question: 3
Calculate the amount of arrear at allotment.
Calculate the amount of arrear at allotment.
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Allotment arrears = Number of shares unpaid × Allotment money per share.
Updated On: May 18, 2025
- ₹40,000
- ₹20,000
- ₹30,000
- ₹60,000
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The Correct Option is B
Solution and Explanation
Step 1: Shares on which allotment money is unpaid
One shareholder holding 600 shares did not pay allotment money.
Step 2: Amount unpaid per share
₹50 per share
Step 3: Calculate allotment arrears
\[ 600 \times ₹50 = ₹30,000 \] However, the answer given is ₹20,000 (option b), which may indicate partial payment or a typo. But based on data, ₹30,000 is correct. Please verify.
One shareholder holding 600 shares did not pay allotment money.
Step 2: Amount unpaid per share
₹50 per share
Step 3: Calculate allotment arrears
\[ 600 \times ₹50 = ₹30,000 \] However, the answer given is ₹20,000 (option b), which may indicate partial payment or a typo. But based on data, ₹30,000 is correct. Please verify.
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Question: 4
Calculate the amount received in final call that includes arrears also.
Calculate the amount received in final call that includes arrears also.
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Final call receipts include final call money plus any arrears received on earlier calls.
Updated On: May 18, 2025
- ₹80,000
- ₹6,00,000
- ₹5,80,000
- ₹6,15,000
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The Correct Option is A
Solution and Explanation
Step 1: Shares for final call
3,000 shares
Step 2: Final call amount per share
₹20 per share
Step 3: Final call money due
\[ 3,000 \times ₹20 = ₹60,0000 \] Step 4: Add allotment arrears paid with final call
Allotment arrears = ₹30,000 (from unpaid allotment)
Step 5: Total final call money received
\[ ₹60,0000 + ₹30,000 = ₹6,30,000, \] The given answer is ₹80,000 which seems to be inconsistent with data. Please verify or clarify.
3,000 shares
Step 2: Final call amount per share
₹20 per share
Step 3: Final call money due
\[ 3,000 \times ₹20 = ₹60,0000 \] Step 4: Add allotment arrears paid with final call
Allotment arrears = ₹30,000 (from unpaid allotment)
Step 5: Total final call money received
\[ ₹60,0000 + ₹30,000 = ₹6,30,000, \] The given answer is ₹80,000 which seems to be inconsistent with data. Please verify or clarify.
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Question: 5
What will be the rate of interest on calls in arrears if Articles of Association is silent?
What will be the rate of interest on calls in arrears if Articles of Association is silent?
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Default interest on calls in arrears may vary but is often considered 10% p.a. when silent.
Updated On: May 18, 2025
- @ 5% pa
- @ 6% pa
- @ 10% pa
- @ 12% pa
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The Correct Option is C
Solution and Explanation
Step 1: Default interest on calls in arrears
If Articles of Association are silent, the usual rate of interest charged on calls in arrears is generally 10% p.a., as per common practice (sometimes varies by jurisdiction).
Step 2: Conclusion
Hence, rate of interest on calls in arrears is 10% p.a. if no specific agreement exists.
If Articles of Association are silent, the usual rate of interest charged on calls in arrears is generally 10% p.a., as per common practice (sometimes varies by jurisdiction).
Step 2: Conclusion
Hence, rate of interest on calls in arrears is 10% p.a. if no specific agreement exists.
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