Question

A Ltd., Had $3,000$, $12\%$ Redeemable preference shares of Rs. $100$ each, fully paid up. The company issued $25,000$ equity shares of Rs. $10$ each at par and $1,000$ $14\%$ Debentures of $100$ each. All amounts were received in full. The payment was made in full. The amount to be transferred to capital Redemption Reserve Account Rs _________.

• A. Nil
• B. Rs. $2,00,000$
• C. Rs. $3,00,000$
• D. Rs. $50,000$

Answer 1

The correct option is D Rs. $50,000$

Value to be transferred to CRR account :-

= Value of preference shares redeemed - new shares issued

= (3,000 shares x RS-100each) - (25,000 shares x RS-10 each)

= 3,00,000 - 2,50,000

= RS-50,000.