ABC Ltd offered 20000, 12% debentures of ₹100 each at a premium of 10% payable as ₹40 on application(including premium) and balance on allotment redeemable after 8 years. 30000 applications are received by the company and the allotment is made on pro-rata basis. All the money on application and allotment is received by the company timely.

How much excess money is adjusted against allotment?

₹400000

Application received = 30000
Application money = ₹40 including premium
Total application money = 30000 x 40
                                      = ₹1200000
Total application money required = 20000 debentures x 40
                                                     = ₹800000
Excess money adjusted against allotment  = 1200000 - 800000
                                                                    = ₹400000