Read the following information carefully and answer the question.
A Limited took over assets of ₹3,00,000 and liabilities of ₹10,000 from X and co. Ltd. for an agreed purchase consideration of ₹2,70,000 to be satisfied by issue of 10% debentures of ₹100 each at a premium of 20%. The company also took a loan of ₹10,00,000 from Punjab National Bank and issued 10% debentures of ₹12,00,000 of ₹100 each as collateral security. The rate of Interest on loan is 12% p.a.
The amount of Capital Reserve is :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → ₹20,000
When the purchase consideration is less than the net assets taken over, the difference is a gain credited to Capital Reserve.
Net assets = ₹3,00,000 − ₹10,000 = ₹2,90,000
Capital Reserve = ₹2,90,000 − ₹2,70,000 = ₹20,000
NCERT (2026-27 edition):
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