Excel Ltd. issued 1,00,000 equity shares and the entire issue was underwritten as follows: Underwriter - X: 50% Underwriter - Y: 30% Underwriter - Z: 20% Applications were received for 90,000 shares. Out of these, applic

CS Executive · Company Accounts & Auditing Practices · PYQS · December 2015
Excel Ltd. issued 1,00,000 equity shares and the entire issue was underwritten as follows: Underwriter - X: 50% Underwriter - Y: 30% Underwriter - Z: 20% Applications were received for 90,000 shares. Out of these, applications for 20,000 shares were marked with X; 10,000 marked with Y and 5,000 marked with Z. The remaining applications for 55,000 shares did not bear any stamp. Determine the liability of each underwriter in relation to above.

Answer & Explanation:

Net liability of Underwriters Particulars Total X (50%) Y (30%) Z (20%) Liability agreed 1,00,000 50,000 30,000 20,000 Less: marked application 35,000 20,000 10,000 5,000 Balance 65,000 30,000 20,000 15,000 Less: unmarked (5:3:2 ratio) 55,000 27,500 16,500 11,000 Net liability 10,000 2,500 3,500 4,000

Topics: Company Accounts

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic