Understanding Pro-rata Allotment:
Applications considered for allotment = 35,000 shares
Shares actually allotted = 30,000 shares
Pro-rata ratio = 30,000 : 35,000 = 6 : 7
This means for every 7 shares applied, 6 shares were allotted.
Calculation of Excess Application Money:
Application money received from 35,000 applications:
= 35,000 × Rs. 40 = Rs. 14,00,000
Application money required for 30,000 shares allotted:
= 30,000 × Rs. 40 = Rs. 12,00,000
Excess application money received:
= Rs. 14,00,000 - Rs. 12,00,000 = Rs. 2,00,000
Since excess application money is adjusted towards allotment (as stated in the question), this Rs. 2,00,000 represents the allotment money received in advance alongwith application.
Answer: Rs. 2,00,000 (Option 2)