Question : If a company issues a fully paid share of Rs.1,25,000 in consideration of net assets of Rs.1,50,000 to a vendor. The Balance of Rs.25,000 will be credited to:
Option 1: Goodwill Account
Option 2: Security Premium Account
Option 3: Statement of Profit and Loss Account
Option 4: Capital Reserve Account
Correct Answer: Security Premium Account
Solution : Security Premium Reserve is the additional amount charged on the face value of any share of the company when the shares are issued, redeemed, and forfeited. The following will be the journal entries: Vendor A/c Dr. 1,50,000 To Equity Share Capital A/c 1,25,000 To Securities Premium Account A/c 25,000 (Being equity shares are issued to the vendor in consideration other than cash)
Hence the correct answer is option 2.
Question : If vendors are issued fully paid shares of Rs.5,00,000 in consideration of net assets Rs.3,00,000. Then the balance of Rs.2,00,000 will be:
Question :
When Net Assets are more than Purchase Consideration. the excess of Net Assets over Purchase Consideration is credited to-----------------
Exe Ltd. took over assets of Rs. 7,00,000 and liabilities of Rs. 60,000 of Wye Ltd. for the purchase consideration of Rs. 6,60,000. Exe Ltd. paid the purchase consideration by issuing 9% Debentures of Rs. 100 each at 10%
Question : Capital employed in a firm is calculated from the liabilities approach as follows
Question : Prakash Ltd. purchased assets worth Rs.2,20,000 and also took over the liabilities (creditors) of Rs.40,000 of Ajay Ltd. for a purchase consideration of Rs. 1,92,000. Prakash Ltd. paid the purchase consideration by issuing 12% debentures of Rs.100 each at premium of
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