Read the following information and answer the question.

ABC Ltd offered 20,000, 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. 30,000 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 money is received on allotment?

₹10,00,000

The correct answer is option 1- ₹10,00,000.

Face value of debenture = ₹100
Application money  = ₹40 including premium of 10%.
Premium is = 100 x 10/100
                  = ₹10
Allotment money = 100 -30
                           = ₹70
Money due on allotment = 20,000 deb x 70
                                       = ₹14,00,000

Application received = 30,000
Application money = ₹40 including premium
Total application money = 30,000 x 40
                                      = ₹12,00,000
Total application money required = 20,000 debentures x 40
                                                    = ₹8,00,000
Excess money adjusted against allotment  = 12,00,000 - 8,00,000
                                                                    = ₹4,00,000

Amount received on allotment = 14,00,000 - 4,00,000
                                                = ₹10,00,000