Soon after incorporation of Arvind Ltd. decided to issue 80,000 equity shares of ₹10 each at a premium of ₹5 per share. Instead of collecting all the capital in the form of cash/bank they have decided to go for the purchase of assets in return pay them in the form of issue of shares. They approached a businessman who sells machinery which is very must useful in production of that material. The company purchased Machinery worth ₹5,50,000 and in return they issued equity shares of ₹10 each at a premium of 10%. Further they issued shares to the public for subscription. The issue is oversubscribed to the extent of 10%. To the surprise one shareholder who got 1000 shares paid all the money due on allotment ₹3 and call money ₹2 along with allotment money.
1. Select the type of allotment of shares made to the company against the purchase of Machinery.
a. Issue against consideration other than cash
b. Initial public offer
c. Issue for cash
d. Preferential allotment.
2. If the shares are issued at premium of 10% against the purchase of an asset, then how many shares are issued?
a. 45,000 shares
b. 55,000 shares
c. 45,000 shares
d. 50,000 shares
3. Which option is not available to adjust the excess applications received on issue of equity shares?
a. Excess applications can be rejected
b. Excess applications can be adjusted towards allotment.
c. Excess applications can be partly rejected and partly adjusted towards allotment.
d. Excess applications can be allotted with preference shares
4. How much amount is received as calls in advance?
a. ₹5000
b. ₹3000
c. ₹2000
d. ₹1000
