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Unitary Method

Prabha Indust...

Question

Prabha Industries Ltd. purchased a Plant from Hind Industries for Rs. $12, 00, 000$ . The company paid Rs. $400, 000$ in cash and agreed to allot $15 %$ redeemable preferences shares of Rs. $100$ each at a premium of $25 %$ for the balance amount. The vendor will be allotted ____________ $10 %$ preference shares of Rs. $100$ each.

A

8, 000

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B

6, 400

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C

7, 800

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D

7, 580

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Solution

The correct option is B $6, 400$
Value of plant and machinery = 12,00,000
Cash Paid = 4,00,000
Value left for allotting shares = 8,00,000
Number of preference shares
to be allotted = Amount for allotting shares
------------------------------------------
Value of shares
= 8,00,000
-------------------
(100+25) 125
= 6,400 shares.

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