In July 2021, M Ltd calls for public subscriptions for 10 million shares. The issue price per share is $1.20 to be paid in three parts, $0.50 on application; $0.40 within one month of the shares being allotted and $0.30 within two months of the first and final call. By the end of July, when applications close, applications have been received for 12 million shares. The directors decide to issue shares to all subscribers in a pro-rata basis with excess monies on application will be applied against allotment and future calls.

The excess amount received on application to be applied to allotment will be:

a.

$2 000 000

b.

$1 000 000

c.

$3 000 000

d.

$6 000 000

e.

$2 400 000