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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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares will be __________
- a)Rs. Nil
- b)Rs. 1,432
- c)Rs. 1,900
- 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 pre...
Calculation of amount raised through issue of shares:
Nominal value of shares issued = Rs. 1,98,084 ÷ Rs. 20 = 9,904 shares
Amount raised through issue of shares = 9,904 shares x (Rs. 20 + 5% of Rs. 20) = Rs. 2,08,084
Calculation of amount required for redemption of preference shares:
Redemption amount = Nominal value of preference shares + Premium on redemption
= Rs. 2,00,000 + 4% of Rs. 2,00,000
= Rs. 2,08,000
As the amount raised through issue of shares (Rs. 2,08,084) is greater than the amount required for redemption of preference shares (Rs. 2,08,000), the balance amount will be credited to the share premium account.
Balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares:
Balance outstanding = Amount raised through issue of shares - Premium on issue of shares - Amount required for redemption of preference shares
= Rs. 2,08,084 - 5% of Rs. 20 x 9,904 shares - Rs. 2,08,000
= Rs. 1,432
Therefore, the correct answer is option (c) Rs. 1,432.
Nominal value of shares issued = Rs. 1,98,084 ÷ Rs. 20 = 9,904 shares
Amount raised through issue of shares = 9,904 shares x (Rs. 20 + 5% of Rs. 20) = Rs. 2,08,084
Calculation of amount required for redemption of preference shares:
Redemption amount = Nominal value of preference shares + Premium on redemption
= Rs. 2,00,000 + 4% of Rs. 2,00,000
= Rs. 2,08,000
As the amount raised through issue of shares (Rs. 2,08,084) is greater than the amount required for redemption of preference shares (Rs. 2,08,000), the balance amount will be credited to the share premium account.
Balance outstanding to the credit of share premium account after adjusting premium on redemption of preference shares:
Balance outstanding = Amount raised through issue of shares - Premium on issue of shares - Amount required for redemption of preference shares
= Rs. 2,08,084 - 5% of Rs. 20 x 9,904 shares - Rs. 2,08,000
= Rs. 1,432
Therefore, the correct answer is option (c) Rs. 1,432.
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Community Answer
O Ltd. has redeemed its 12% preference shares of Rs. 2,00,000 at a pre...
12% preference shares of Rs. 2,00,000 at premium of 4% [2,00,000 x 4% =8000]
Redemption issued Rs.1,98000 shares at premium of 5% [ 1,98,000 x 5%=9,900]
Adjusted premium on redemption of preference = Rs. 9,900 - 8,000 = Rs. 1,900.
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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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)Rs. 8,000Correct 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 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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)Rs. 8,000Correct 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 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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)Rs. 8,000Correct 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 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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)Rs. 8,000Correct 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 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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)Rs. 8,000Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)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. 1,98,000 worth of shares of Rs. 10 each at a premium of 5%. The balance outstanding to the credit of share premium account after adjusting premium on redemptionof preference shares will be __________a)Rs. Nilb)Rs. 1,432c)Rs. 1,900d)Rs. 8,000Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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