A company issues 10,000, 9% preference shares of ₹100 each, redeemable at a premium of 10%. The shares are issued at par. What is the amount to be transferred to the Capital Redemption Reserve (CRR)? MCQ with Answer and Explanation
A company issues 10,000, 9% preference shares of ₹100 each, redeemable at a premium of 10%. The shares are issued at par. What is the amount to be transferred to the Capital Redemption Reserve (CRR)?
A. ₹10,00,000
B. ₹11,00,000
C. ₹1,00,000
D. ₹9,00,000
Answer: Option A
Solution (By JKSSB Mock Tests)
When preference shares are issued at par and redeemed at a premium, the CRR must be created out of free reserves equal to the nominal value of the shares redeemed. Therefore, CRR = 10,000 * ₹100 = ₹10,00,000. The premium on redemption is provided out of securities premium or P&L.
Explanation:
Deposited checks lower the Cash Book overdraft. To make the Pass Book overdraft match the lower Cash Book overdraft, the amount must be added (reducing the negative balance).
A petty cashier is given Rs 2,000 as float. He spends Rs 1,750 during the month. Under the imprest system, how much will he receive at the start of the next month?
No comments yet. Be the first to start the discussion!