Question : Pilot Pens Ltd. issued 5,000, 6% Debentures of Rs. 100 each at a discount of 20%. It had balance in Securities Premium Reserve of Rs. 60,000 and Rs. 10,000 in Surplus, i.e., Balance in Statement of Profit and Loss. Profit for the year before writing off the balance of Discount on the Issue of Debentures is Rs.20,000. Balance shown in the statement of profit and loss will be
Option 1: Rs 1,00,000
Option 2: Rs 10,000
Option 3: Rs 20,000
Option 4: Rs 30,000
Correct Answer: Rs 10,000
Solution : Answer = Rs 10,000
Discount on issue of Debentures = 1,00,000
(5000 @ 100 each) = 5,00,000 x 20/100
Securities Premium Reserve A/c Dr 60,000
Surplus in the Statement of Profit and Loss Dr 40,000
To discount on the issue of debentures A/c 1,00,000
Hence, the correct option is 2.
Question : Puran Store Ltd., an Unlisted Company, is to redeem 5000,8% Debentures of Rs. 100 each on 30th June 2020. It has a balance of Rs. 10,000 in Debentures Redemption Reserve. It decides to set aside the amount to Debentures Redemption Reserve on 31st March 2020 on which date
Question : On 1st April, 2018 X Ltd. issued 20,000, 10% Debentures of Rs.100 each at a discount of 5% redeemable at a premium of 4% after 5 years. It decided to write off loss on issue of debentures in the year ended 31st March, 2019. It has the following balances : Capital
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