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A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an issue of 1,00,000 equity shares of Rs. 10 each. 80% of issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance unsubscribed shares are purchased by A and B in profit sharing ratio. How many shares are purchased by A?
  • a)
    80,000 shares
  • b)
    72,000 shares
  • c)
    12,000 shares
  • d)
    8,000 shares
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
A and B enter into a joint venture to underwrite the shares of K Ltd. ...
To solve this question, let's break it down step by step:

Step 1: Calculate the number of shares subscribed by A and B
- The total number of shares issued by K Ltd is 1,00,000.
- 80% of the shares are subscribed by the public, which means 80,000 shares are subscribed.
- The remaining 20% of shares are unsubscribed.
- Since A and B enter into a joint venture and share the profit in a ratio of 3:2, they will also share the unsubscribed shares in the same ratio.
- To calculate the number of shares subscribed by A, we use the formula: (Number of unsubscribed shares / Total profit sharing ratio) * Profit sharing ratio of A.
- Number of unsubscribed shares = 20,000 (20% of 1,00,000)
- Total profit sharing ratio = 3 + 2 = 5
- Profit sharing ratio of A = 3
- Number of shares subscribed by A = (20,000 / 5) * 3 = 12,000 shares

Therefore, A purchased 12,000 shares.

Step 2: Verify the answer
- Let's calculate the total number of shares purchased by A and B to verify the answer.
- Shares subscribed by A = 80,000 (subscribed by the public) + 12,000 (purchased by A) = 92,000 shares
- Shares subscribed by B = 80,000 (subscribed by the public) + 8,000 (purchased by B) = 88,000 shares
- Total shares purchased by A and B = 92,000 + 88,000 = 1,80,000 shares
- Total shares issued by K Ltd = 1,00,000 (subscribed by the public) + 20,000 (unsubscribed) = 1,20,000 shares

Since the total shares purchased by A and B (1,80,000 shares) is equal to the total shares issued by K Ltd (1,20,000 shares), our answer is correct.

Therefore, A purchased 12,000 shares.
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Community Answer
A and B enter into a joint venture to underwrite the shares of K Ltd. ...
100000*10= 10lakh

80% of 10 lakh = 8lakh

left 2lakh

A 2lakh * 3/5 = 1.2 lakh

A will get 120000/10 = 12000 no of shares
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A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an issue of 1,00,000 equity shares of Rs. 10 each. 80% of issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance unsubscribed shares are purchased by A and B in profit sharing ratio. How many shares are purchased by A?a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. Can you explain this answer?
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A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an issue of 1,00,000 equity shares of Rs. 10 each. 80% of issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance unsubscribed shares are purchased by A and B in profit sharing ratio. How many shares are purchased by A?a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. 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 A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an issue of 1,00,000 equity shares of Rs. 10 each. 80% of issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance unsubscribed shares are purchased by A and B in profit sharing ratio. How many shares are purchased by A?a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. 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 A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an issue of 1,00,000 equity shares of Rs. 10 each. 80% of issue are subscribed by the party. The profit sharing ratio between A and B is 3:2. The balance unsubscribed shares are purchased by A and B in profit sharing ratio. How many shares are purchased by A?a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. Can you explain this answer?.
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