M sent 10 cycles to N on consignment. The cost of each cycle was Rs.12,000.
The expenses of M were, freight Rs.7,000, insurance Rs.3,000.
During transit, 1 cycle was destroyed and the insurance company paid Rs.9,000
towards that claim.
N sold 7 cycles at Rs.15,000 each, and he paid for unloading and insurance
Rs.3,000. He sent Rs.90,000 by draft. It was agreed that N is to get 5 %
commission.
Give ledger accounts in the books of M
Answers
Explanation:
As per section 80 of the Companies Act 1956, company can redeem preference shares only out of fresh issue or profits that are available for distribution as dividends. In case, there is premium to be paid on redemption it should be paid out of profit available for paying dividends or out of securities premium account.
Amount to be paid on redemption = 2,00,000 + 20,000 ( 10% of 2,00,000)
= 2,20,000
Amount of fresh issue = Amount to be paid on redemption - (Free reserves + securities premium reserve)
= 2,20,000 - ( 30,000 + 20,000 + 8,000 + 50,000)
= Rs-1,12,000.
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