R Ltd purchased a building from X Infra for ₹6,00,000 and the payment is to be made by the issue of shares for ₹100 each at a premium of 20%. Calculate the number of shares to be issued.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- 5,000 shares.
Machinery = 6,00,000
Shares are issued for ₹100 each at a premium of 20%
Premium = 100 x 20/100
= 20
Issue price of shares = 100 + 20
= 120
No of shares issued = Purchase consideration/Issue price of share
= 6,00,000/120
= 5,000