Megha co Limited issued on 1st January 2016 20012 percentage deventure of Rs 100 is at Rs 90 payable as follows on application RS 30 on allotment Rs 40 on first and final 20 all the defences were subscribed and paid in full interest is payable half year the indirect was paid actor for percentage on an average rate of income tax is 20 percentage
Answers
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.