Question

S Ltd. acquired fixed assets worth Rs. 15,00,000 by issued 100 shares of Rs. 10 each at a premium of 25%. Number of shares to be issued by S Ltd. to settle the purchase consideration will be _______.

• A. 12,000 shares
• B. 15,000 shares
• C. 18,750 shares
• D. 11,250 shares

Answer 1

The correct option is A 12,000 shares

Here, the amount of purchase is Rs 15,00,000 and the shares are allocated at Rs 10 per share and are issued at premium of 25% which means the shares will be allocated as Rs 10 + 25% of Rs 10 i.e. Rs 12.50. Further the fixed assest were acquired by issued 100 shares of Rs 10 and 25 % premium which makes it Rs 12.50*100 i.e. 1250 Hence, to settle the purchase consideration, S Ltd has to issue Rs 15,00,000/Rs 1250 i.e. 12000 shares.