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

Stage 1: Application Receipt.
Shares Applied = 70,000.
Shares Allotted = 50,000.
Resulting Surplus Applications = 20,000 shares.

Stage 2: Application Funds Per Share.
Application Amount = Rs. 5 (inclusive of premium).

Stage 3: Surplus Funds Received.
Surplus Applications = \( 20,000 \times 5 = Rs. 1,00,000 \).

Stage 4: Surplus Fund Allocation.
As per the provided information, Rs. 40,000 was returned, and Rs. 60,000 was applied to the allotment. Total accounted surplus application funds = Rs. 1,00,000.

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