CA Foundation Exam > CA Foundation Questions > Preference shares amounting to Rs. 2,00,000 a...
Start Learning for Free
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?
- a)Rs. 1,05,000
- b)Rs. 1,00,000
- c)Rs. 2,00,000
- d)Rs. 1,11,000
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium ...
Understanding the Redemption of Preference Shares
When preference shares are redeemed, the company needs to comply with specific regulations regarding the transfer to the capital redemption reserve. In this case, we need to analyze the figures involved in the redemption and the shares issued.
Given Data:
- Preference shares to be redeemed: Rs. 2,00,000
- Premium on redemption: 5%
- Shares issued: Rs. 1,00,000
- Premium on new shares issued: 10%
Calculating the Redemption Amount:
- Total redemption amount = Preference shares + Premium
= Rs. 2,00,000 + (5% of Rs. 2,00,000)
= Rs. 2,00,000 + Rs. 10,000
= Rs. 2,10,000
Calculating the Amount Raised from New Shares:
- Total amount raised = Shares issued + Premium
= Rs. 1,00,000 + (10% of Rs. 1,00,000)
= Rs. 1,00,000 + Rs. 10,000
= Rs. 1,10,000
Capital Redemption Reserve Calculation:
According to company law, the amount to be transferred to the capital redemption reserve is equal to the nominal value of the preference shares redeemed.
- Therefore, the amount to be transferred to capital redemption reserve = Rs. 2,00,000
However, the amount actually raised from issuing new shares is only Rs. 1,10,000.
Final Amount to be Transferred:
Since the company can only transfer the nominal value of the preference shares redeemed, the correct answer is:
- Amount to be transferred to capital redemption reserve = Rs. 1,00,000
Thus, the correct answer is option B.
When preference shares are redeemed, the company needs to comply with specific regulations regarding the transfer to the capital redemption reserve. In this case, we need to analyze the figures involved in the redemption and the shares issued.
Given Data:
- Preference shares to be redeemed: Rs. 2,00,000
- Premium on redemption: 5%
- Shares issued: Rs. 1,00,000
- Premium on new shares issued: 10%
Calculating the Redemption Amount:
- Total redemption amount = Preference shares + Premium
= Rs. 2,00,000 + (5% of Rs. 2,00,000)
= Rs. 2,00,000 + Rs. 10,000
= Rs. 2,10,000
Calculating the Amount Raised from New Shares:
- Total amount raised = Shares issued + Premium
= Rs. 1,00,000 + (10% of Rs. 1,00,000)
= Rs. 1,00,000 + Rs. 10,000
= Rs. 1,10,000
Capital Redemption Reserve Calculation:
According to company law, the amount to be transferred to the capital redemption reserve is equal to the nominal value of the preference shares redeemed.
- Therefore, the amount to be transferred to capital redemption reserve = Rs. 2,00,000
However, the amount actually raised from issuing new shares is only Rs. 1,10,000.
Final Amount to be Transferred:
Since the company can only transfer the nominal value of the preference shares redeemed, the correct answer is:
- Amount to be transferred to capital redemption reserve = Rs. 1,00,000
Thus, the correct answer is option B.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer?
Question Description
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. 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 Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. 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 Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer?.
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. 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 Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. 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 Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer?.
Solutions for Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer? 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 Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer?, a detailed solution for Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?a)Rs. 1,05,000b)Rs. 1,00,000c)Rs. 2,00,000d)Rs. 1,11,000Correct answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup