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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with
- a)Rs.6,00,000
- b)Rs.6,25,000
- c)Rs.5,00,000
- d)Rs.5,50,000
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
Taksh Ltd. purchased land and building from Daksh Ltd. for a book valu...
Here , first of all we will pass journal entries for clarification with working note::
(1) Land and Building A/c Dr. 5,00,000
To Daksh Ltd. 5,00,000
(2) Daksh Ltd. Dr. 5,00,000
Discount on Issue of
Debentures Dr. 1,25,000
To 10% Debentures A/c 6,25,000
Working note ::
1. Number of shares = Purchase consideration ÷ Price of shares
= 5,00,000 ÷ 80
= 6,250 shares
( Actual price Rs. 100 when discount given by 20% , the price reduced to Rs. 80.)
2. 6,250 × 20 = 1,25,000
3. Amount to be credited to 10% Debentures A/c is 6,25,000 (5,00,000+1,25,000).
(1) Land and Building A/c Dr. 5,00,000
To Daksh Ltd. 5,00,000
(2) Daksh Ltd. Dr. 5,00,000
Discount on Issue of
Debentures Dr. 1,25,000
To 10% Debentures A/c 6,25,000
Working note ::
1. Number of shares = Purchase consideration ÷ Price of shares
= 5,00,000 ÷ 80
= 6,250 shares
( Actual price Rs. 100 when discount given by 20% , the price reduced to Rs. 80.)
2. 6,250 × 20 = 1,25,000
3. Amount to be credited to 10% Debentures A/c is 6,25,000 (5,00,000+1,25,000).
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book valu...
Explanation:
1. Calculation of Consideration:
The consideration for the purchase of land and building is given as 10% Debentures of Rs.100 each at a discount of 20%.
The book value of the land and building is not relevant in this case. We need to calculate the total amount of debentures issued.
The face value of each debenture is Rs.100 and it is issued at a discount of 20%. Therefore, the effective value of each debenture is 100 - (20/100 * 100) = Rs.80.
Let's assume 'x' as the number of debentures issued. The total consideration can be calculated as follows:
Total Consideration = Number of debentures issued * Effective value of each debenture
Total Consideration = x * Rs.80
So, the consideration for the purchase of land and building is Rs.80x.
2. Calculation of Number of Debentures:
The total consideration for the purchase is given as Rs.5,00,000.
Therefore, Rs.80x = Rs.5,00,000
x = Rs.5,00,000 / Rs.80
x = 6250
So, the number of debentures issued is 6250.
3. Calculation of Debentures Account:
The debentures account will be credited with the total value of debentures issued.
Total value of debentures issued = Number of debentures issued * Face value of each debenture
Total value of debentures issued = 6250 * Rs.100
Total value of debentures issued = Rs.6,25,000
Therefore, option 'B' (Rs.6,25,000) is the correct answer.
Conclusion:
The debentures account will be credited with Rs.6,25,000, which is the total value of debentures issued for the purchase of land and building.
1. Calculation of Consideration:
The consideration for the purchase of land and building is given as 10% Debentures of Rs.100 each at a discount of 20%.
The book value of the land and building is not relevant in this case. We need to calculate the total amount of debentures issued.
The face value of each debenture is Rs.100 and it is issued at a discount of 20%. Therefore, the effective value of each debenture is 100 - (20/100 * 100) = Rs.80.
Let's assume 'x' as the number of debentures issued. The total consideration can be calculated as follows:
Total Consideration = Number of debentures issued * Effective value of each debenture
Total Consideration = x * Rs.80
So, the consideration for the purchase of land and building is Rs.80x.
2. Calculation of Number of Debentures:
The total consideration for the purchase is given as Rs.5,00,000.
Therefore, Rs.80x = Rs.5,00,000
x = Rs.5,00,000 / Rs.80
x = 6250
So, the number of debentures issued is 6250.
3. Calculation of Debentures Account:
The debentures account will be credited with the total value of debentures issued.
Total value of debentures issued = Number of debentures issued * Face value of each debenture
Total value of debentures issued = 6250 * Rs.100
Total value of debentures issued = Rs.6,25,000
Therefore, option 'B' (Rs.6,25,000) is the correct answer.
Conclusion:
The debentures account will be credited with Rs.6,25,000, which is the total value of debentures issued for the purchase of land and building.
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer?
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer?.
Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer?.
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000.The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited witha)Rs.6,00,000b)Rs.6,25,000c)Rs.5,00,000d)Rs.5,50,000Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA CPT tests.
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