Question

• Share capital Rs. 100000@ Rs.
10. If the value of the same
reduced up to Rs. 8 What is the
capital Reduction Amount
Answer
A.
Rs. 25000
B.
Rs. 15000
C.
Rs. 20000
D.
Rs. 30000​

Answer 1

Answer:

C) 20,000

Explanation:

Calculation of Capital Reduction Amount : -

No.of shares = Total share Capital

Each share value

= 1,00,000

10

= 10,000 Shares

Capital Reduction Amount = 10,000 x 2

( 10 - 8 = 2)

= Rs. 20,000

Answer 2

Given:

Share capital before reduction = Rs. 1,00,000

Amount per share = Rs. 10

Amount per share after reduction = Rs. 8

To find:

Capital Reduction Amount = ?

Solution:

• To calculate the capital amount reduction we need to calculate the share capital after the value is reduced to Rs. 8.

• Use the following formula:

   => Share capital (after reduction) = (Share capital × Reduction amount per   share ) ÷ Amount per share

   => Share capital (after reduction) = (Rs 1,00,000 × Rs 8) ÷ Rs 10

   => Share capital (after reduction) = Rs 10,000 × Rs 8

   => Share capital (after reduction) = Rs 80,000

• Now to calculate the capital-reduction amount subtract the share capital after reduction from share capital before reduction.

  => Capital reduction amount = Rs. 1,00,000 - Rs. 80,000

  => Capital Reduction Amount = Rs. 20,000

Hence, the correct answer is Rs. 20,000 (option C).