Question

44. AB Ltd purchased a Machinery from XY Ltd for 4,50,000. AB Ltd immediately paid 90,000 by Bank Draft and the balance by issue of preference share of 100 each at 20% premium for the purchase consideration of Machinery to XY Ltd. Shares issued by AB Ltd? 1 Marks 3,000 preference shares 30,000 preference shares 3,600 preference shares 0 36,000 preference shares ​

Answer 1

Explanation:

3000 preference shares

Answer 2

Answer:

Option (a) is correct.

Explanation:

In this question, we have to determine the number of shares issued by the company. In the question, it is given that AB purchased machinery from XY for 4,50,000 out of which 90,000 is paid immediately and the shares were issued for the remaining balance. The issue price of shares is 100 per share plus a 20% premium.

First of all, we calculate the remaining balance:

$Remaining Balance= Cost of Machine-Amount Paid\\=4,50,00-90,000\\=3,60,000$

Now we find the price of each share after adding the premium:

$Issue price= Par Value+ Premium\\=100+20\\=120$

Now to calculate the number of shares issued we divide the remaining balance by the issue price per share:

$Number of Share=\frac{Remaining Balance}{Issue Price per Share}\\ =\frac{3,60,000}{120} \\=3,000$

Hence, the number of shares issued is 3,000.

Option (b) is not correct because it is not the correct number of shares.

Option (c) is not correct because it is not the correct number of shares.

Option (d) is not correct because it is not the correct number of shares.

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