Issuing Shares at a Premium

When a company issues shares at a price higher than their face value, it is said to be issuing shares at a premium. The premium amount is the difference between the issue price and the face value of the shares. In this case, D Ltd. issued shares of Rs.100 each at a premium of Rs.20 per share.

Payment Schedule

The payment schedule for the shares is as follows:
- On Application: Rs.20 per share
- On Allotment: Rs.50 per share (including premium)
- On First Call: Rs.30 per share
- On Second and Final Call: Rs.20 per share

Applications and Allotment

Applications were received for 3,00,000 shares, but the company only had 2,00,000 shares available for allotment. Therefore, the company had to make a pro-rata allotment to the applications received. Pro-rata allotment means that each applicant will receive a proportionate number of shares based on the number of shares applied for and the total number of shares available for allotment.

In this case, the company received applications for 3,00,000 shares and had 2,00,000 shares available for allotment. Therefore, the pro-rata allotment ratio is calculated as follows:
Pro-rata allotment ratio = Number of shares applied for / Number of shares available for allotment
= 3,00,000 / 2,00,000
= 1.5

This means that for every 1 share applied for, the applicant will receive 1.5 shares. For example, if an applicant applied for 100 shares, they will be allotted 150 shares (100 x 1.5).

Employment of Excess Money

In this case, the company received applications for 3,00,000 shares, but only had 2,00,000 shares available for allotment. This means that the company received excess money on application for the remaining 1,00,000 shares. This excess money can be utilized by the company to cover the sum due on allotment.

The excess money received on application is Rs.20 per share (the amount paid on application). Therefore, the total excess money received is calculated as follows:
Excess money received = Excess shares x Excess amount per share
= 1,00,000 x Rs.20
= Rs.20,00,000

This excess money of Rs.20,00,000 can be utilized by the company to cover the sum due on allotment, which is Rs.50 per share. Therefore, the excess money can cover the allotment amount for 40,000 shares (Rs.20,00,000 / Rs.50). This means that the company can allot the remaining 40,000 shares to the applicants without requiring any additional payment.

Conclusion

In conclusion, D Ltd. issued shares at a premium of Rs.20 per share. The company received applications for 3,00,000 shares but had only 2,00,000 shares available for allotment. Therefore, a pro-rata allotment was made to the applications, and the excess money received on application was utilized to cover the sum due on allotment. This ensured that the company could allot the remaining shares