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.

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 = 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