CA Foundation Exam  >  CA Foundation Questions  >  Outstanding redeemable preference shares = Rs... Start Learning for Free
Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000?
Most Upvoted Answer
Outstanding redeemable preference shares = Rs. 500000 Premium on redem...
Calculation of Face Value of Fresh Issue Shares

Given Information:
- Outstanding redeemable preference shares = Rs. 500000
- Premium on redemption 10%
- General reserve of Rs.150000
- Security premium balance is Rs. 40000
- Fresh issue of shares to be made at 10% discount

Step 1: Calculation of Amount available for Fresh Issue
- Amount available for Fresh Issue = (Outstanding redeemable preference shares) + (Premium on redemption)
- Amount available for Fresh Issue = Rs. 500000 + (10% of 500000) = Rs. 550000

Step 2: Calculation of Total Reserves
- Total Reserves = (General reserve) + (Security premium balance)
- Total Reserves = Rs. 150000 + Rs. 40000 = Rs. 190000

Step 3: Calculation of Maximum Discount allowed
- Maximum Discount allowed = (Total Reserves) / (Amount available for Fresh Issue) * 100
- Maximum Discount allowed = (190000 / 550000) * 100 = 34.54%

Step 4: Calculation of Face Value of Fresh Issue Shares
- Face Value of Fresh Issue Shares = (Amount available for Fresh Issue) / (1 - Maximum Discount allowed)
- Face Value of Fresh Issue Shares = 550000 / (1 - 0.3454) = Rs. 840000

Answer: The face value of fresh issue shares will be Rs. 840000. (Option not given in the question)

Explanation:
- The calculation is based on the formula for calculating the face value of shares, which is Face Value = Amount available for Fresh Issue / (1 - Maximum Discount allowed).
- The maximum discount allowed is calculated based on the total reserves available and the amount available for fresh issue.
- The face value of fresh issue shares is calculated using the above formula.
Explore Courses for CA Foundation exam
Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000?
Question Description
Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? 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 Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000?.
Solutions for Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? defined & explained in the simplest way possible. Besides giving the explanation of Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000?, a detailed solution for Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? has been provided alongside types of Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? theory, EduRev gives you an ample number of questions to practice Outstanding redeemable preference shares = Rs. 500000 Premium on redemption 10% General reserve of Rs.150000 Security premium balance is Rs. 40000 Fresh issue of shares to be made at 10% discount The face value of fresh issue shares will be : (a) 260000 (b) 354000 (c) 400000 (d) 180000? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev