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A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.
- a)80,000 shares
- b)72,000 shares
- c)12,000 shares
- d)8,000 shares
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
A and B enter into a joint venture to underwrite the shares of K Ltd. ...
Given:
- A and B enter into a joint venture to underwrite the shares of K Ltd.
- K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each.
- 80% of the issue was subscribed by the public.
- The profit sharing ratio between A and B is 3:2.
- The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio.
To Find: How many shares to be purchased by A.
Solution:
Total number of equity shares issued by K Ltd. = 1,00,000
Number of shares subscribed by public = 80% of 1,00,000 = 80,000
Number of shares not subscribed by public = 1,00,000 - 80,000 = 20,000
A and B purchased the balance 20,000 shares in the ratio of 3:2
Let the number of shares purchased by A be x
Then, the number of shares purchased by B = (20,000 - x)
Profit sharing ratio between A and B = 3:2
Therefore, profit will be shared in the ratio of 3x : 2(20,000 - x)
We know that the total profit will be the difference between the amount received from the public and the amount paid to K Ltd. for the shares.
Amount received from the public = 80,000 x Rs. 10 = Rs. 8,00,000
Amount paid to K Ltd. for the shares = (80,000 + x) x Rs. 10 = (80,000 + x) x 10,000
Total profit = Rs. 8,00,000 - (80,000 + x) x 10,000
Profit sharing ratio = 3x : 2(20,000 - x)
Therefore,
3x/2(20,000 - x) = Rs. 8,00,000 - (80,000 + x) x 10,000
Solving the above equation, we get
x = 12,000
Therefore, A purchased 12,000 shares.
Hence, option (c) 12,000 shares is the correct answer.
- A and B enter into a joint venture to underwrite the shares of K Ltd.
- K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each.
- 80% of the issue was subscribed by the public.
- The profit sharing ratio between A and B is 3:2.
- The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio.
To Find: How many shares to be purchased by A.
Solution:
Total number of equity shares issued by K Ltd. = 1,00,000
Number of shares subscribed by public = 80% of 1,00,000 = 80,000
Number of shares not subscribed by public = 1,00,000 - 80,000 = 20,000
A and B purchased the balance 20,000 shares in the ratio of 3:2
Let the number of shares purchased by A be x
Then, the number of shares purchased by B = (20,000 - x)
Profit sharing ratio between A and B = 3:2
Therefore, profit will be shared in the ratio of 3x : 2(20,000 - x)
We know that the total profit will be the difference between the amount received from the public and the amount paid to K Ltd. for the shares.
Amount received from the public = 80,000 x Rs. 10 = Rs. 8,00,000
Amount paid to K Ltd. for the shares = (80,000 + x) x Rs. 10 = (80,000 + x) x 10,000
Total profit = Rs. 8,00,000 - (80,000 + x) x 10,000
Profit sharing ratio = 3x : 2(20,000 - x)
Therefore,
3x/2(20,000 - x) = Rs. 8,00,000 - (80,000 + x) x 10,000
Solving the above equation, we get
x = 12,000
Therefore, A purchased 12,000 shares.
Hence, option (c) 12,000 shares is the correct answer.
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Community Answer
A and B enter into a joint venture to underwrite the shares of K Ltd. ...
No. of unsubscribed shares =100000 - 80% of 100000 = 20000 shares
A's share in 20000 shares = 20000*3/5 = 12000 shares
A's share in 20000 shares = 20000*3/5 = 12000 shares
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A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. Can you explain this answer?
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A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect 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 A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect 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 A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. Can you explain this answer?.
A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect 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 A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect 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 A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect answer is option 'C'. Can you explain this answer?.
Solutions for A and B enter into a joint venture to underwrite the shares of K Ltd. K Ltd. make an equity issue of 1,00,000 equity shares of Rs. 10 each. 80% of the issue was subscribed by the public. The profit sharing ratio between A and B is 3:2. The balance shares not subscribed by the public, purchased by A and B in profit sharing ratio. How many shares to be purchased by A.a)80,000 sharesb)72,000 sharesc)12,000 sharesd)8,000 sharesCorrect 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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