Question

A limited company has to redeem redeemable preference shares of the value of Rs. 1,00,000 for which the company has issued 3,000 equity shares of Rs. 10 each at a premium of 10%. The amount to be transferred to capital redemption reserve account will be ___________.

• A. Rs. 1,00,000
• B. Rs. 97,000
• C. Rs. 70,000
• D. Rs. 67,000

Answer 1

The correct option is C Rs. 70,000

b'Preference shares 1,00,000

Less-Equity shares 30,000

[3,000 x 10 each]

capital redemption reserve 70,000.

'