Jindal Ltd. purchased a machine from Auto Ltd. for ₹ 38,00,000. As per purchase agreement ₹ 8,00,000 was paid in cash and balance by issuing of shares of ₹ 100 each at 20% premium. Calculate the number of shares issued.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 25,000
Price of machinery = ₹38,00,000
₹8,00,000 was paid in cash
Remaining amount = 38,00,000 - 8,00,000
= 30,00,000
Shares are issued at Rs. 100 each at 20% premium for ₹30,00,000.
Price of each share = 100 + premium
= 100 + 20
= 120
No of shares issued = Purchase consideration / Price of share
= 30,00,000/120
= 25,000