Multiple choice

R Ltd. had 3, 000, 12% redeemable preference shares of Rs. 100 each, fully paid up. The company issued 25, 000 equity shares of Rs. 10 each at par and 1, 000, 14 % debentures of Rs. 100 each. All amounts were received in full. The payment was made in full. The amount to be transferred to CRR a/c is

  1. nil

  2. Rs. 2, 00, 000

  3. Rs. 3, 00, 000

  4. Rs. 50, 000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Preference shares can to be redeemed from the fresh issue of equity share or from divisible profits. Where divisible profits are used for the redemtion of debentures, same amount should be transferred to CRR a/c. Preoceeds of fresh issue of debentures cannot be used for the redemption of preference shares.Amount of Preference Shares                                =Rs 3,00,000 Amount of fresh proceeds of equity shares          =Rs 2,50,000 Amount to be transferred to CRR                           =Rs (3,00,000-2,50,00)                                                                                       =Rs 50,000

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