Question

What is the amount of excess application money credited to Share Allotment and money refunded on rejected application in totality?

• A. Rs. 40,000
• B. Rs. 60,000
• C. Rs. 1,00,000
• D. Rs. 1,20,000

Hint:

Always split excess application into (i) refund portion and (ii) adjustment towards allotment. Together they must equal the excess received.

Answer 1

The Correct Option is C

Step 1: Applications received.
Shares applied = 70,000.
Shares issued = 50,000.
Therefore, excess applications = 20,000 shares.

Step 2: Application money per share.
Application = Rs. 5 (including premium).

Step 3: Excess money received.
Excess application = \( 20,000 \times 5 = Rs. 1,00,000 \).

Step 4: Adjustment of excess.
As per the passage, Rs. 40,000 was refunded and Rs. 60,000 was adjusted towards allotment. Thus, in totality, the amount of excess application money accounted for = Rs. 1,00,000.

Final Answer: \[ \boxed{Rs. 1,00,000} \]