Practicing Success
Read the following passage and answer the following question. ABC Ltd. took over Assets of ₹6,00,000 and Liabilities of ₹40,000 of XYZ Ltd. at an agreed value of ₹6,30,000. ABC Ltd. issued 10% Debentures of ₹100 each at a discount of 10% to XYZ Ltd. in full satisfaction of the purchase price. ABC Ltd. writes off any capital losses incurred during a year, at the end of that financial year. |
How many debentures are issued by the company for the purchase consideration? |
7,000 7,700 6,300 7,500 |
7,000 |
The correct answer is option 1- 7,000. Nominal value of debenture = ₹100 Issue price = 100-10 No of debenture issued = Purchase consideration/ issue price |