Anand Vijay Ashok Gross Liability (No. of shares) 5,00,000 5,00,000 5,00,000 Less : Marked Applications (excluding firm underwriting) 14.25.000) 4,50.000 (3.50.000) 75,000 50.000 1,50.000 Less: Unmarked Applications (equally) 124.000 (24.000 (24.000 51,000 26,000 1,26,000 Less : Firm Underwriting (50.000) (50.000 (50.000) 1,000 (24,000) 76,000 Surplus of Vijay distributed between Anand & Ashok equally (12.000) 24.000 (12.000) (11,000) 64,000- Surplus of Anand allocated to Ashok totally 11,000 (11.000 11,000 64,000 Less: Adjustment of Anand's surplus (11.000) (11.000 Net liability, excluding firm underwriting 53,000 Add. Firm underwriting 50.000 50.000 50.000 Total liability of underwriters 50.000 50.000 1.03.000 (2) Calculation of Amounts Payable by Underwriters Anand Vijay Liability (No. of shares) 50.000 50,000 1,03,000 Amount payable @ 4.50 per share 2,25,000 2.25.000 4,63,500 Less : Amount paid on Firm (1.25.000) (1.25.000 (1.25.000) Applications of 50,000 each @ 2.50 Ashok 040 Balance payable 1,00,000 1,00.000 3,38,500 Underwriting Commission Receivable 2.50.000 250.000 2.50.000 Amount Paid 1,50.000 1,50.000 Amount received by the Co. 88.500 Illustration 4 A company made a public issue of 1,25,000 equity shares of 100 each, 750 payable on application. The entire issue was underwritten by four parties: A, B, C, and D in the proportion of 30% and 25%, 25% and 20% respectively. Under the terms agreed upon, a commission of 2% was payable on the amounts underwritten A, B, C, and D also agreed on firm, underwriting of 4,000, 6,000, Nil and 15,000 shares respectively. The total subscriptions, excluding firm underwriting, including marked applications were for 90,000 shares. Marked applications received were as under: A 24.000 12,000 B 20.000 D 24,000 Ascertain the liability of the individual underwriters and also show the journal entries that you would make in the books of the company. All workings should form part of your