Question

Fraser and Ross issued 50009 % Adventure of rupees hundred each at power on 1st April 2017 redeemable at power on 31st March 2018 the company transfer the required amount to Drr out of surplus that is balance in the statement of profit and loss on 31st March 2017 invest with the specified amount in fixed deposit with the Canada bank on 1st April 2017 earning 8% interest interest is paid on debenture annually on 31st March​

Answer 1

Explanation:

Question 1:

A public limited company is a manufacturer of chemical fertilisers. Its annual turnover is ₹ 50 crores . The company had issued 5,000, 12% Debentures of ₹ 500 each at par. Calculate the amount of Debentures Redemption Reserve which needs to be created to meet the requirements of law.

ANSWER:

Amount required to be transferred to DRR=25% of Face value of Debentures =25% of Rs 25,00,000=Rs 6,25,000