MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Authorised Share Capital

As per Sectio...

Question

As per Section 52 of the Companies Act 2013, the securities premium reserve can be utilised for the purpose of:

A

Redemption of preference shares

No worries! We‘ve got your back. Try BYJU‘S free classes today!

B

Transfer of amount to capital redemption reserve

No worries! We‘ve got your back. Try BYJU‘S free classes today!

C

Payment of dividend on preference shares

No worries! We‘ve got your back. Try BYJU‘S free classes today!

D

Payment of premium on redemption of preference shares.

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Open in App

Solution

The correct option is D Payment of premium on redemption of preference shares.
As per companies Act Securities premium can be utilised only for:
(a) issuing fully paid shares to members
(b) writing off the balance of preliminary expenses of the company
(c) writing off commission paid/discount allowed/expenses incurred on issue of shares or debentures of the company
(d) for providing for the premium payable on redemption of preference shares
(e) for purchase of its own shares

Suggest Corrections

thumbs-up

0

Similar questions

Q. 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

Equality 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________.

Q. When shares are issued at a premium for the purpose of redemption of preference shares, amount of premium can be used for redemption of par value of preference shares.

Q. Solid 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-

Q. A company wishes to redeem its preference shares amounting to Rs. 1,00,000 at a premium of 5% and for this purpose issues 5,000 equity shares of Rs. 10 each at a premium of 5%. The company also has a balance of Rs. 1,00,000 as General Reserves and Rs. 50,000 in profit and loss account. The amount to be transferred to Capital Redemption Reserve account for the purpose of redemption is ____________.

Q. Redeemable preference shares of Rs. 2,00,000 are redeemed at par for which purpose fresh equity shares are issued for Rs. 80,000 at 10% premium. The amount to be transferred to Capital Redemption Reserve Account would be____________.

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Issue of Shares

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Authorised Share Capital

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon