Question

Redeemable preference shares of Rs. 1,00,000 are redeemed at par for which purpose fresh equity shares of Rs. 80,000 are issued at a discount of 10%. The amount to be transferred to Capital Redemption Reserve Fund will be ______________.

• A. Rs. 20,000
• B. Rs. 28,000
• C. Rs. 1,00,000
• D. Rs. 80,000

Answer 1

The correct option is B Rs. 28,000

b'Equity shares of Rs. 80,000 at a discount of 10% [80,000 x 10% =8,000]

80,000 - 8000 = 72,000

Redeemable preference share of Rs, 1,00,000

- 72,000

Capital Redemption Reserve 28,000.

'