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O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?
- a)Rs.Nil
- b)Rs.1,904
- c)Rs.1,432
- d)Rs.8,000
Correct answer is option 'C'. Can you explain this answer?
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O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a prem...
< b="" /> Given information: < />
- O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4%.
- The company has issued shares worth Rs. 1,98,084 at a premium of 5% to meet the redemption.
- We need to find the balance outstanding to the credit of the share premium account after adjusting the premium on redemption of preference shares.
< b="" /> Calculation: < />
< b="" /> Step 1: Calculate the redemption amount for preference shares: < />
- Redemption amount = Nominal value of preference shares + Premium on redemption
- Nominal value of preference shares = Rs. 2,00,000
- Premium on redemption = Nominal value of preference shares * Premium rate
- Premium rate = 4%
- Premium on redemption = Rs. 2,00,000 * 4% = Rs. 8,000
- Redemption amount = Rs. 2,00,000 + Rs. 8,000 = Rs. 2,08,000
< b="" /> Step 2: Calculate the number of shares issued to meet the redemption: < />
- Face value of each share = Rs. 20
- Amount raised by issuing shares = Rs. 1,98,084
- Premium on issuing shares = Amount raised * Premium rate
- Premium rate = 5%
- Premium on issuing shares = Rs. 1,98,084 * 5% = Rs. 9,904
- Amount raised excluding premium = Amount raised - Premium on issuing shares = Rs. 1,98,084 - Rs. 9,904 = Rs. 1,88,180
- Number of shares issued = Amount raised excluding premium / Face value of each share = Rs. 1,88,180 / Rs. 20 = 9,409 shares
< b="" /> Step 3: Adjust the premium on redemption: < />
- Total premium on redemption = Redemption amount - Amount raised excluding premium = Rs. 2,08,000 - Rs. 1,88,180 = Rs. 19,820
- Balance outstanding to the credit of the share premium account after adjusting the premium on redemption = Premium on issuing shares - Total premium on redemption
- Balance outstanding = Rs. 9,904 - Rs. 19,820 = Rs. -9,916
< b="" /> Conclusion: < />
- The balance outstanding to the credit of the share premium account after adjusting the premium on redemption of preference shares is Rs. -9,916.
- However, negative values are not possible for the balance, so it should be considered as zero.
- Therefore, the correct answer is option 'A' - Rs. Nil.
- O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4%.
- The company has issued shares worth Rs. 1,98,084 at a premium of 5% to meet the redemption.
- We need to find the balance outstanding to the credit of the share premium account after adjusting the premium on redemption of preference shares.
< b="" /> Calculation: < />
< b="" /> Step 1: Calculate the redemption amount for preference shares: < />
- Redemption amount = Nominal value of preference shares + Premium on redemption
- Nominal value of preference shares = Rs. 2,00,000
- Premium on redemption = Nominal value of preference shares * Premium rate
- Premium rate = 4%
- Premium on redemption = Rs. 2,00,000 * 4% = Rs. 8,000
- Redemption amount = Rs. 2,00,000 + Rs. 8,000 = Rs. 2,08,000
< b="" /> Step 2: Calculate the number of shares issued to meet the redemption: < />
- Face value of each share = Rs. 20
- Amount raised by issuing shares = Rs. 1,98,084
- Premium on issuing shares = Amount raised * Premium rate
- Premium rate = 5%
- Premium on issuing shares = Rs. 1,98,084 * 5% = Rs. 9,904
- Amount raised excluding premium = Amount raised - Premium on issuing shares = Rs. 1,98,084 - Rs. 9,904 = Rs. 1,88,180
- Number of shares issued = Amount raised excluding premium / Face value of each share = Rs. 1,88,180 / Rs. 20 = 9,409 shares
< b="" /> Step 3: Adjust the premium on redemption: < />
- Total premium on redemption = Redemption amount - Amount raised excluding premium = Rs. 2,08,000 - Rs. 1,88,180 = Rs. 19,820
- Balance outstanding to the credit of the share premium account after adjusting the premium on redemption = Premium on issuing shares - Total premium on redemption
- Balance outstanding = Rs. 9,904 - Rs. 19,820 = Rs. -9,916
< b="" /> Conclusion: < />
- The balance outstanding to the credit of the share premium account after adjusting the premium on redemption of preference shares is Rs. -9,916.
- However, negative values are not possible for the balance, so it should be considered as zero.
- Therefore, the correct answer is option 'A' - Rs. Nil.
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O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer?
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O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. 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 O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer?.
O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. 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 O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer?.
Solutions for O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Here you can find the meaning of O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer?, a detailed solution for O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice O Ltd has redeemed its 12% preference shares of Rs. 2,00,000 at a premium of 4% . To meet the redemption it has issued Rs. 1,98,084 worth of shares of Rs. 20 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares = ?a)Rs.Nilb)Rs.1,904c)Rs.1,432d)Rs.8,000Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice Commerce tests.
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