Practicing Success
Read the following case study and answer question. Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems face by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of Rs 45,00,000. At the time of issue of Debenture they also issued equity Share of Rs30,00,000 at 20% premium. |
How much amount is to be debited in statement of profit and Loss to write off loss on issue of Debentures? |
Rs 12,50,000 Rs 17,50,000 Rs 5,00,000 Rs 11,50,000 |
Rs 11,50,000 |
The correct answer is option (4) : Rs 11,50,000. Discount on issue = No of debentures x discount per debenture Premium on redemption = No of debentures x Premium per debenture Total loss on issue = 5,00,000 + 12,50,000 Premium available on issue of shares = 30,00,000 x 20/100 Total amount written off from statement of profit and loss = Total loss on issue - Premium available |