Jindal Ltd. purchased a machine from Auto Ltd. for Rs. 38,00,000. As per purchase agreement Rs. 8,00,000 was paid in cash and balance by issuing of shares of Rs. 100 each at 20% premium. Calculate the number of shares issued.

25,000

The correct answer is Option (2) → 25,000

Price of machinery = ₹38,00,000
₹8,00,000 was paid in cash
Remaining amount = 3800000 - 800000
                           = 3000000

Shares are issued at Rs. 100 each at 20% premium for ₹3000000.
Price of each share = 100 + premium
                            = 100 + 20
                            = 120

No of shares issued = Purchase consideration / Price of share
                             = 3000000/120
                             = 25000