947 R (ii) COMPUTATION OF AMOUNT RECEIVED/PAID IN SETTLEMENT Particulars P Q Net liability (No. of shares) 5,000 Amount receivable @ 10 per share (Rs.) 50,000 Underwriting commission @ 2% of the face value of shares underwritten (Rs.) 1,26,000 42,000 Amount received from underwriters (Rs.) Amount paid to underwriters (Rs.) 76,000 42,000 35,000 3,50,000 42,000 3,08,000 Note: The firm underwriting shares have been treated as unmarked applications. It is presumed that the amount for firm underwriting shares has been received earlier during opening date of issue, and now the final settlement is done only for shares left unsubscribed. A public limited company, with a capital of Rs. 10,00,000 divided into equity shares of 2.27 Rs. 10 each, places its entire issue on the market, and the whole issue has been under- written as follows: Paterson & Co. 30,000 shares Price & Co. 15,000 shares Singh & Co. 35,000 shares Talukdar & Co. 2,000 shares Mazumdar & Co. 10,000 shares Banerjee & Co. 8,000 shares All marked forms are to go in relief of the liability of the underwriter whose name they bear. The applications received on the forms marked by the underwriters are: Paterson & Co. 25,000 shares Price & Co. 1,000 shares Singh & Co. 23,500 shares Talukdar & Co. 2,000 shares Mazumdar & Co. 6,500 shares Banerjee & Co. 7,000 shares Applications for 20,000 equity shares are received on unmarked application forms. Calculate the liability of the individual underwriters. In terms of the underwriting agreement, the rel- evant proportion is to be ascertained not in terms of the original liability ratio but after giving credit for marked forms. (CA Inter, Old Scheme, May, 1975)