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CSEET · Fundamentals of Accounting · Introduction to Company Accounts

Kaveri Ltd issued 10,000 equity shares of Rs 100 each at a premium of Rs 20 per share, Rs 30 being payable on application, Rs 50 on allotment (including premium) and the rest on call. Applications were received for 15,000 shares; 10,000 were allotted and excess application money was adjusted towards allotment. What amount is due from shareholders on allotment, after adjusting the excess application money, and is received in cash?

This question contains an inconsistency and has no valid key. Allotment due is Rs 5,00,000, excess application money is Rs 1,50,000, so cash due is Rs 3,50,000, which is not among the options.

  1. ARs 2,00,000Correct
  2. BRs 3,00,000
  3. CRs 5,00,000
  4. DRs 50,000

Explanation

Application money received = 15,000 x 30 = Rs 4,50,000. Application money on shares allotted = 10,000 x 30 = Rs 3,00,000, so excess = Rs 1,50,000. Allotment due = 10,000 x 50 = Rs 5,00,000. Cash needed = 5,00,000 - 1,50,000 = Rs 3,50,000. Hence none of the options reflect this unless data is rechecked; the key option 0 is incorrect.

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