Question

Preference shares of Rs. 2 lakhs are redeemed at par for which fresh equity shares of Rs. 80,000 are issued at 10% premium. What amount should be transferred to Capital Redemption Reserve?

• A. Rs. 2,00,000
• B. Rs. 80,000
• C. Rs. 1,20,000
• D. Rs. 1,12,000

Answer 1

Answer: (C)

Rs. 1,20,000

Preference share 2,00,000

Less- equity shares 80,000

Capital redemption reserve 1,20,000.

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