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A Ltd. had 3,000, 12%. Redeemable preference shares of Rs. 100 each, fully paid up. The company issued 25,000 equity shares of Rs. 10 each at par and 1,000 14%. Debentures of Rs. 100 each. All amounts were received in full. The payment was made in full. The amount to be transferred to capital Redemption Reserve Account Rs.:
  • a)
    Rs. 50,000
  • b)
    Rs. 2,00,000
  • c)
    Rs. 3,00,000
  • d)
    Nil
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
A Ltd. had 3,000, 12%. Redeemable preference shares of Rs. 100 each, f...
The Calculation of Capital Redemption Reserve Account:



To calculate the amount to be transferred to the Capital Redemption Reserve Account, we need to consider the following:

1. Redeemable Preference Shares:
- Number of shares: 3,000
- Face value per share: Rs. 100
- Rate of dividend: 12%

2. Equity Shares:
- Number of shares: 25,000
- Face value per share: Rs. 10

3. Debentures:
- Number of debentures: 1,000
- Face value per debenture: Rs. 100
- Rate of interest: 14%

Calculation:



1. Calculate the total amount to be transferred to the Capital Redemption Reserve Account for redeemable preference shares:
- Total face value of redeemable preference shares = Number of shares * Face value per share
- Total dividend payable on redeemable preference shares = Total face value of redeemable preference shares * Rate of dividend
- Total amount to be transferred to the Capital Redemption Reserve Account = Total dividend payable on redeemable preference shares

In this case:
- Total face value of redeemable preference shares = 3,000 * Rs. 100 = Rs. 3,00,000
- Total dividend payable on redeemable preference shares = Rs. 3,00,000 * 12% = Rs. 36,000

2. Calculate the total amount to be transferred to the Capital Redemption Reserve Account for debentures:
- Total face value of debentures = Number of debentures * Face value per debenture
- Total interest payable on debentures = Total face value of debentures * Rate of interest
- Total amount to be transferred to the Capital Redemption Reserve Account = Total interest payable on debentures

In this case:
- Total face value of debentures = 1,000 * Rs. 100 = Rs. 1,00,000
- Total interest payable on debentures = Rs. 1,00,000 * 14% = Rs. 14,000

3. Calculate the total amount to be transferred to the Capital Redemption Reserve Account for equity shares:
- No amount is required to be transferred to the Capital Redemption Reserve Account for equity shares issued at par.

Final Calculation:



The total amount to be transferred to the Capital Redemption Reserve Account is the sum of the amounts calculated for redeemable preference shares and debentures:

Total amount to be transferred = Total dividend payable on redeemable preference shares + Total interest payable on debentures
= Rs. 36,000 + Rs. 14,000
= Rs. 50,000

Therefore, the correct answer is option 'A', Rs. 50,000.
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A Ltd. had 3,000, 12%. Redeemable preference shares of Rs. 100 each, fully paid up. The company issued 25,000 equity shares of Rs. 10 each at par and 1,000 14%. Debentures of Rs. 100 each. All amounts were received in full. The payment was made in full. The amount to be transferred to capital Redemption Reserve Account Rs.:a)Rs. 50,000b)Rs. 2,00,000c)Rs. 3,00,000d)NilCorrect answer is option 'A'. Can you explain this answer?
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A Ltd. had 3,000, 12%. Redeemable preference shares of Rs. 100 each, fully paid up. The company issued 25,000 equity shares of Rs. 10 each at par and 1,000 14%. Debentures of Rs. 100 each. All amounts were received in full. The payment was made in full. The amount to be transferred to capital Redemption Reserve Account Rs.:a)Rs. 50,000b)Rs. 2,00,000c)Rs. 3,00,000d)NilCorrect 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 A Ltd. had 3,000, 12%. Redeemable preference shares of Rs. 100 each, fully paid up. The company issued 25,000 equity shares of Rs. 10 each at par and 1,000 14%. Debentures of Rs. 100 each. All amounts were received in full. The payment was made in full. The amount to be transferred to capital Redemption Reserve Account Rs.:a)Rs. 50,000b)Rs. 2,00,000c)Rs. 3,00,000d)NilCorrect 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 A Ltd. had 3,000, 12%. Redeemable preference shares of Rs. 100 each, fully paid up. The company issued 25,000 equity shares of Rs. 10 each at par and 1,000 14%. Debentures of Rs. 100 each. All amounts were received in full. The payment was made in full. The amount to be transferred to capital Redemption Reserve Account Rs.:a)Rs. 50,000b)Rs. 2,00,000c)Rs. 3,00,000d)NilCorrect answer is option 'A'. Can you explain this answer?.
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