CA Foundation Exam  >  CA Foundation Questions  >  S Ltd. issued 2,000, 10% Preference shares of... Start Learning for Free
S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________
  • a)
    Rs. 50,000
  • b)
    Rs. 40,000
  • c)
    Rs. 2,00,000
  • d)
    Rs. 2,20,000
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, whic...
Calculation of Capital Redemption Reserve Account Transfer

Issue of Preference Shares
- Number of Preference Shares issued = 2,000
- Face value of each share = Rs. 100
- Total face value of Preference Shares issued = Rs. 2,00,000
- Premium on redemption = 10%
- Premium on each share = Rs. 10
- Total premium collected = 2,000 x Rs. 10 = Rs. 20,000

Amount transferred to Capital Redemption Reserve Account = Total premium collected on redemption of Preference Shares = Rs. 20,000

Issue of Equity Shares for Redemption of Preference Shares
- Number of Equity Shares issued = 1,500
- Face value of each share = Rs. 100
- Premium on each share = 20%
- Premium on each share = Rs. 20
- Total premium collected = 1,500 x Rs. 20 = Rs. 30,000

Redemption of Preference Shares
- Number of Preference Shares redeemed = 2,000
- Face value of each share = Rs. 100
- Total face value of Preference Shares redeemed = Rs. 2,00,000
- Premium paid on redemption = 10%
- Premium paid on each share = Rs. 10
- Total premium paid on redemption = 2,000 x Rs. 10 = Rs. 20,000

Transfer to Capital Redemption Reserve Account
- Amount transferred to Capital Redemption Reserve Account = Total premium collected on redemption of Preference Shares - Premium paid on redemption of Preference Shares
- Amount transferred to Capital Redemption Reserve Account = Rs. 20,000 - Rs. 10,000 = Rs. 10,000

Therefore, the amount to be transferred by the company to the Capital Redemption Reserve Account will be Rs. 50,000 (Rs. 20,000 from the issue of Preference Shares + Rs. 30,000 from the issue of Equity Shares for redemption of Preference Shares - Rs. 10,000 paid on redemption of Preference Shares).
Free Test
Community Answer
S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, whic...
2,00,000-1,50,000=50,000
Explore Courses for CA Foundation exam

Similar CA Foundation Doubts

S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer?
Question Description
S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. 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 S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. 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 S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer?.
Solutions for S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. 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 S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer?, a detailed solution for S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice S Ltd. issued 2,000, 10% Preference shares of Rs.100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of Rs.100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be _________a)Rs. 50,000b)Rs. 40,000c)Rs. 2,00,000d)Rs. 2,20,000Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev