Gross Liability (No. of shares) Less : Firm Underwriting Anand 5,00,000 50.000 4,50,000 425.000 25,000 36.000 11,000 (11.000) Vijay 5,00,000 50,000 4,50,000 450.000 Less: Marked Applications Ashok 5,00,000 50.000 4,50,000 3.50.000 1,00,000 36,000 64,000 11.000 53,000 50,000 Less: Unmarked Applications (equally) Less: Adjustment of Anand's surplus Net liability, excluding firm underwriting Firm underwriting 50.000 50,000 C24 Gross liability 50,000 50,000 1,03,000 (2) Calulation of amounts payable by underwriters liability (No. of shares) 50,000 50,000 1,03,000 Rs. Rs. Rs. Amount payable @ Rs. 4.50 per share 2,25,000 2,25,000 4,63,500 Less: Amount paid on Firm Applications of 50,000 each @ Rs. 2.50 1.25.000 125.000 1.25.000 Balance payable 1,00,000 1,00,000 3,38,500 Underwriting Commission Receivable 2.50,000 2.50,000 2.50,000 Amount Paid 1,50,000 1,50,000 Amount received by the Co. 88.500 Benefit of unmarked applications has not been given to Vijay as has surplus would have ultimately been credited for Anand & Ashok. Illustration 5 A company made a public issue of 1,25,000 equity shares of Rs. 100 each, Rs. 50 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