Rahul Limited purchased building from Handa Limited for ₹5,40,000 and the payment is to be made by the issue of shares of ₹100 each. The number of shares to be issued at premium of 20% is:
Answer & explanation
Correct answer: option 2
The correct answer is option 2- 4,500 shares.
Building = ₹5,40,000
Shares of ₹100 each are issued at premium of 20% i.e. ₹20.
Issue price = 100 + 20
= 120
No of shares issued = Purchase consideration/Issue price
= 5,40,000/120
= 4,500