Jain and Company purchased a machine from High Machine Limited for Rs. 3,80,000. As per purchase agreement Rs. 20,000 were paid in cash and balance by issue of shares of Rs. 100 each. What will be the number of equity shares issued if issue of shares are made at 20% premium?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 3000 Shares
When shares are issued to a vendor, the number of shares = amount payable in shares ÷ issue price per share. At a 20% premium, a Rs. 100 share is issued at Rs. 120.
Amount to be paid in shares = Rs. 3,80,000 − Rs. 20,000 = Rs. 3,60,000
Issue price per share = Rs. 100 + 20% of Rs. 100 = Rs. 120
Number of shares = Rs. 3,60,000 ÷ Rs. 120 = 3,000 shares
Dividing by the face value of Rs. 100 gives 3,600 shares, which is the answer only for an issue at par.
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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