950 Particulars In the solution given above, firm underwriting was allowed to be set off against the individual liability of each underwriter (by inclusion in marked forms). However, if it is agreed that firm underwriting will not be so allowed, rather its benefit will be shared by all underwriters (by inclusion in unmarked forms), the solution will be as follows. STATEMENT OF UNDERWRITERS' TOTAL LIABILITY No. of Shares A B Total Gross Liability 12,000 5,000 3,000 20,000 Less: Marked Applications 2,000 4.000 1,000 7,000 Balance 10,000 1,000 2.000 13,000 Less: Unmarked Applications in the ratio of gross liability i.e. 12:5:3. 4,320 1,800 1,080 7,200 Balance 5,680 800 920 5,800 Credit for B's oversubscription to A & C in the ratio of 12:3 (Less: gross liability) (640) 800 Net Liability for shares remained unsubscribed 5,040 760 5,800 Add: Liability in respect of firm underwriting 1,600 600 2.000 4.200 Total Liability (Total shares to be acquired) 6,640 600 2.760 10,000 160 TT Ltd. issued 50,000 equity shares of Rs 10 each at par. The entire issue was under- 2.38 written as follows: A-30,000 shares (firm underwriting 4,000 shares) B-15,000 shares (firm underwriting 5,000 shares) C-5,000 shares (firm underwriting 1,000 shares) The total applications including firm underwriting were for 40,000 shares. The marked applications were as follows: A-10,000 shares; B - 7,000 shares; C-3,000 shares The underwriting contract provides that credit for unmarked applications be given to the underwriters in proportion to the shares underwritten. Determine the liability of each underwriter and amount of commission payable to them, assuming the rate to be the maximum allowed by law