The number of shares to be issued to a vendor for consideration other than cash is calculated as follows:

When shares are issued to a vendor for consideration other than cash (like purchase of assets or business), the company needs to determine how many shares to issue to settle the payment.

Formula:

Number of shares to be issued = $\frac{\text{Amount Payable to Vendor}}{\text{Issue Price per share}}$

Understanding the terms:

• Amount Payable: The purchase consideration agreed to be paid to the vendor for the assets/business acquired
• Issue Price: The total price per share (which may include face value, premium, and any calls)

Why other options are incorrect:

• Option 1: Application money is only a part of the share price collected at the application stage, not the complete value per share
• Option 2: Uses "Amount Receivable" (incorrect term) and "Allotment price" (only a component) instead of total issue price
• Option 4: Uses "Amount Receivable" which is incorrect - from the company's perspective, it's an amount payable to the vendor

Example: If a vendor sells machinery worth ₹5,00,000 and shares are issued at ₹10 per share, then:

Number of shares = ₹5,00,000 ÷ ₹10 = 50,000 shares

The correct answer is Option 3.