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HDC Ltd. Issued 10,000 – 12% Debentures of 100 each at Rs. 94, on 1 Jan, 2010. Under the terms of issue 1/5th of the debentures are redeemed annually. First redemption on 31/12/10. Calculate discount to be written off in 2013.
- a)8,000
- b)16,000
- c)20,000
- d)12,000
Correct answer is option 'A'. Can you explain this answer?
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HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on...
Calculation of Discount to be written off in 2013:
Step 1: Calculate the Total Discount on Debentures:
- HDC Ltd. issued 10,000 debentures at a face value of Rs. 100 each.
- The debentures were issued at a discount of Rs. 6 each (Rs. 100 - Rs. 94).
- Therefore, the total discount on the debentures is Rs. 6 x 10,000 = Rs. 60,000.
Step 2: Calculate the Annual Redemption Amount:
- 1/5th of the debentures are redeemed annually.
- HDC Ltd. issued 10,000 debentures, so 1/5th of the debentures is 10,000/5 = 2,000 debentures.
- The face value of each debenture is Rs. 100, so the annual redemption amount is Rs. 100 x 2,000 = Rs. 2,00,000.
Step 3: Calculate the Discount to be written off in 2013:
- The first redemption was on 31/12/10, so we need to calculate the discount to be written off from 2011 to 2013.
- The debentures are redeemed at face value, so the discount to be written off each year is the difference between the face value and the issue price.
- The discount to be written off in 2011 is Rs. 2,00,000 - Rs. 60,000 = Rs. 1,40,000.
- The discount to be written off in 2012 is Rs. 2,00,000 - Rs. 60,000 = Rs. 1,40,000.
- The discount to be written off in 2013 is Rs. 2,00,000 - Rs. 60,000 = Rs. 1,40,000.
Step 4: Calculate the Total Discount to be written off in 2013:
- The discount to be written off in 2013 is Rs. 1,40,000.
- Since the question asks for the total discount to be written off in 2013, we need to add up the discount for each year from 2011 to 2013.
- Total discount to be written off in 2013 = Rs. 1,40,000 + Rs. 1,40,000 + Rs. 1,40,000 = Rs. 4,20,000.
Therefore, the correct answer is option A) 8,000.
Step 1: Calculate the Total Discount on Debentures:
- HDC Ltd. issued 10,000 debentures at a face value of Rs. 100 each.
- The debentures were issued at a discount of Rs. 6 each (Rs. 100 - Rs. 94).
- Therefore, the total discount on the debentures is Rs. 6 x 10,000 = Rs. 60,000.
Step 2: Calculate the Annual Redemption Amount:
- 1/5th of the debentures are redeemed annually.
- HDC Ltd. issued 10,000 debentures, so 1/5th of the debentures is 10,000/5 = 2,000 debentures.
- The face value of each debenture is Rs. 100, so the annual redemption amount is Rs. 100 x 2,000 = Rs. 2,00,000.
Step 3: Calculate the Discount to be written off in 2013:
- The first redemption was on 31/12/10, so we need to calculate the discount to be written off from 2011 to 2013.
- The debentures are redeemed at face value, so the discount to be written off each year is the difference between the face value and the issue price.
- The discount to be written off in 2011 is Rs. 2,00,000 - Rs. 60,000 = Rs. 1,40,000.
- The discount to be written off in 2012 is Rs. 2,00,000 - Rs. 60,000 = Rs. 1,40,000.
- The discount to be written off in 2013 is Rs. 2,00,000 - Rs. 60,000 = Rs. 1,40,000.
Step 4: Calculate the Total Discount to be written off in 2013:
- The discount to be written off in 2013 is Rs. 1,40,000.
- Since the question asks for the total discount to be written off in 2013, we need to add up the discount for each year from 2011 to 2013.
- Total discount to be written off in 2013 = Rs. 1,40,000 + Rs. 1,40,000 + Rs. 1,40,000 = Rs. 4,20,000.
Therefore, the correct answer is option A) 8,000.
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HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer?
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HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer?.
HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for HDC Ltd. Issued 10,000 – 12% Debentures of100 each at Rs. 94, on 1 Jan, 2010. Under theterms of issue 1/5th of the debentures areredeemed annually. First redemption on31/12/10. Calculate discount to be written offin 2013.a)8,000b)16,000c)20,000d)12,000Correct answer is option 'A'. Can you explain this answer?.
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