The company received applications for 70,000 shares by February 10, 2024, with Rs. 5 payable per share on application (including premium).
Calculation:
Total application money received = Number of shares applied × Amount per share on application
Total application money received = 70,000 × Rs. 5 = Rs. 3,50,000
The Equity Share Application Account is credited with the total amount received from all applicants on the date applications are received. This represents the gross inflow before any adjustments like refunds or transfers to allotment account.
The subsequent treatment (Rs. 40,000 returned to rejected applicants and Rs. 60,000 transferred to allotment account for excess application money) happens after this initial credit entry when dealing with oversubscription, but does not affect the total amount initially credited to the Application Account.
Answer: Rs. 3,50,000 (Option 3)