Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

Romi Ltd. acquired assets of ₹20 lakh and took over creditors of ₹2 lakh from Kapil Enterprises. Romi Ltd. issued 8% debentures of ₹100 each at par as purchase consideration. What will be the purchase consideration for the purchase of the business?

Options:

₹2000000

₹1800000

₹1500000

₹2200000

Correct Answer:

₹1800000

Explanation:

Purchase consideration = Assets - Liabilities
                                     = 2000000 - 200000
                                     = ₹1800000