Question

To redeem the preference shares, 1,00,000 equity shares of Rs. 10 each at Rs.11, Rs. 1,00,000 10%. Pref. shares of Rs. 10 each at Rs. 9 and Rs. 1,00,000 9% Debentures of Rs. 100 each at Rs. 90 are issued, the proceeds of a fresh issue under Section 80 is __________.

• A. 10,90,000
• B. Rs. 1,10,00,000
• C. Rs. 12,80,000
• D. Rs. 11,90,000

Answer 1

The correct option is A 10,90,000

Under sec 80 o the companies Act the word "proceeds" does not include the amount of the premium if the shares are issued at a premium but stands for the actual amount received if shares are issued at a discount or at par.

So, the amount of fresh proceeds = 1,00,000*10 = 10,00,000

1,00,000/10 = 10,000 = 10,000 *9 = 90,000

Total = 10,90,000.