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Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:Equity Shares of ₹10 each ₹ 8,00,000 Securities Premium ₹ 2,80,000General Reserve ₹ 1,40,000Profit & Loss Account ₹ 2,40,000Sundry Creditors ₹ 1,80,000The company issued 3 bonus shares for every 4 fully paid-up shares. Securities premium account will be utilized first and then General Reserve. To issue bonus shares Profit & Loss A/c will be debited by
  • a)
    ₹ 2,40,000
  • b)
    ₹ 1,80,000
  • c)
    ₹ 2,00,000
  • d)
    ₹ 2,20,000
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:E...
Calculation of Bonus Shares:


  • Equity Shares before bonus issue = ₹ 8,00,000 / ₹ 10 = 80,000 shares

  • Bonus shares to be issued = 3/4 * 80,000 = 60,000 shares


Utilization of Reserves:


  • Securities Premium available = ₹ 2,80,000

  • General Reserve available = ₹ 1,40,000

  • Total Reserve available = ₹ 2,80,000 + ₹ 1,40,000 = ₹ 4,20,000


Debit to Profit & Loss Account:


  • Total cost of issuing bonus shares = 60,000 shares * ₹ 10 (face value) = ₹ 6,00,000

  • Utilization of Reserves = ₹ 4,20,000

  • Amount to be debited to Profit & Loss Account = ₹ 6,00,000 - ₹ 4,20,000 = ₹ 1,80,000


Therefore, the correct answer is ₹ 1,80,000.
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Community Answer
Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:E...
Calculation of Bonus Shares Issued:
- Total Equity Shares before issuing bonus shares = 8,00,000 / 10 = 80,000 shares
- Bonus shares to be issued = 3/4 * 80,000 = 60,000 shares

Utilization of Reserves:
- Securities Premium = 2,80,000
- General Reserve = 1,40,000
- Total available for bonus issue = 2,80,000 + 1,40,000 = 4,20,000

Debit to Profit & Loss Account:
- Remaining amount needed for bonus issue = 60,000 * 10 (face value of shares) = 6,00,000
- Amount to be debited to Profit & Loss Account = 6,00,000 - 4,20,000 = 1,80,000
Therefore, the correct answer is option 'B' - 1,80,000.
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Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:Equity Shares of 10 each 8,00,000 Securities Premium 2,80,000General Reserve 1,40,000Profit & Loss Account 2,40,000Sundry Creditors 1,80,000The company issued 3 bonus shares for every 4 fully paid-up shares. Securities premium account will be utilized first and then General Reserve. To issue bonus shares Profit & Loss A/c will be debited bya) 2,40,000b) 1,80,000c) 2,00,000d) 2,20,000Correct answer is option 'B'. Can you explain this answer?
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Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:Equity Shares of 10 each 8,00,000 Securities Premium 2,80,000General Reserve 1,40,000Profit & Loss Account 2,40,000Sundry Creditors 1,80,000The company issued 3 bonus shares for every 4 fully paid-up shares. Securities premium account will be utilized first and then General Reserve. To issue bonus shares Profit & Loss A/c will be debited bya) 2,40,000b) 1,80,000c) 2,00,000d) 2,20,000Correct 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 Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:Equity Shares of 10 each 8,00,000 Securities Premium 2,80,000General Reserve 1,40,000Profit & Loss Account 2,40,000Sundry Creditors 1,80,000The company issued 3 bonus shares for every 4 fully paid-up shares. Securities premium account will be utilized first and then General Reserve. To issue bonus shares Profit & Loss A/c will be debited bya) 2,40,000b) 1,80,000c) 2,00,000d) 2,20,000Correct 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 Following was the Balance Sheet of BCC Ltd. as of 31st December 2019:Equity Shares of 10 each 8,00,000 Securities Premium 2,80,000General Reserve 1,40,000Profit & Loss Account 2,40,000Sundry Creditors 1,80,000The company issued 3 bonus shares for every 4 fully paid-up shares. Securities premium account will be utilized first and then General Reserve. To issue bonus shares Profit & Loss A/c will be debited bya) 2,40,000b) 1,80,000c) 2,00,000d) 2,20,000Correct answer is option 'B'. Can you explain this answer?.
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