Question

Akash Ltd. registered capital is ₹ 50,00,000 in shares of ₹ 10 each. The company issued 2,00,000 of such shares, payable @ ₹ 3 per share on application, @ ₹ 3 per share on allotment and balance on first and final call. What will be the amount due on allotment, if shareholder holding 20,000 shares paid all call money at the time of allotment only?

• A. ₹ 4,00,000
• B. ₹ 6,00,000
• C. ₹ 60,000
• D. ₹ 1,50,000

Hint:

In accounting for share capital, "Due" and "Received" are two different things.
• Amount Due: Total shares $\times$ Installment rate.
• Amount Received: Amount Due + Calls-in-Advance $-$ Calls-in-Arrears. Always look for the keyword "due" to avoid getting distracted by advance payments.

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
The amount "due on allotment" refers to the total legal claim the company has on all issued shares at the allotment stage.
This is a fixed calculation based on the number of shares issued and the per-share allotment rate, regardless of whether shareholders pay early (Calls-in-Advance) or late (Calls-in-Arrears).
Key Formula or Approach:
\[ \text{Amount Due} = \text{Total Issued Shares} \times \text{Rate per Share for Allotment} \]
Step 2: Detailed Explanation:
1. Identify Shares Issued: 2,00,000 shares.
2. Identify Allotment Rate: Rs. 3 per share.
3. Calculation:
\[ \text{Amount Due on Allotment} = 2,00,000 \times 3 = 6,00,000 \).
The problem mentions that a shareholder holding 20,000 shares paid their call money early. This "Calls-in-Advance" will increase the actual cash received in the bank, but it does not change the amount that was originally "Due" on the allotment installment.
Step 3: Final Answer:
The amount due on allotment is Rs. 6,00,000.