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Read the following information and answer the given questions:
Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.
Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?
- a)Statement of Profit and Loss
- b)General Reserve
- c)Capital Reserve
- d)Securities Premium
Correct answer is option 'A'. Can you explain this answer?
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Read the following information and answer the given questions:Charan ...
Discount on issue of debentures is a capital loss and over a period of 3 to 5 years or is charged to “Securities Premium Account” as per the guidelines issued by ICAI. The discount on issue of debentures can be written-off either by debiting it to profit and loss or to securities premium account.
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Read the following information and answer the given questions:Charan ...
Explanation:
Capital Losses:
- Charan Ltd. writes off any capital losses incurred during a year at the end of that financial year.
Treatment of Discount on Issue of Debentures:
- The discount on the issue of debentures is considered a capital loss.
- Since Charan Ltd. writes off any capital losses incurred during the year, the discount on the issue of debentures will be transferred to the Statement of Profit and Loss account.
Impact on Financial Statements:
- By transferring the discount on the issue of debentures to the Statement of Profit and Loss account, the net profit for the year will be reduced.
- This reduction in profit reflects the true cost incurred by the company in issuing debentures at a discount.
Therefore, the discount on the issue of debentures will be transferred to the Statement of Profit and Loss account as a capital loss, in accordance with Charan Ltd.'s policy of writing off any capital losses incurred during a year.
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Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer?
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Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer?.
Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Read the following information and answer the given questions:Charan Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of Paras Ltd. at an agreed value of ₹6,30,000. Charan Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to Paras Ltd. in full satisfaction of the price. Charan Ltd. writes off any capital losses incurred during a year, at the end of that financial year.Q. As Charan Ltd. writes off the capital losses where will the discount on issue of debentures be transferred to?a)Statement of Profit and Lossb)General Reservec)Capital Reserved)Securities PremiumCorrect answer is option 'A'. Can you explain this answer?.
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