Redemption of Preference Shares – Corporate and Management Accounting MCQ

0

Redemption of Preference Shares – Corporate and Management Accounting MCQ

1 / 33

Preference shares of ₹ 9,00,000 are redeemable by issuing 3,000 equity shares of ₹ 100 each at ₹ 140. The amount to be transferred to Capital Redemption Reserve

2 / 33

Ajay Ltd. decided to redeem ₹ 10,000 Preference shares of ₹10 each at a 10% premium. Balance in profit & loss account is ₹ 60,000 and in Securities, Premium A/c is ₹ 10,000. You are required to calculate the minimum number of equity shares to be issued for the purpose of redemption if new equity shares are to be issued at a 20% premium having a face value of ₹ 10 each.

3 / 33

An Ltd. had 3,000,12% Redeemable Preference Shares of ₹ 100 each, fully paid up. The company issued ₹ 25,000 equity shares of ₹ 10 each at par and 1,000 14% Debentures of ₹ 100 each. The amount to be transferred to Capital Redemption A/c will be

4 / 33

The balance sheet of A Ltd. has 20,000 9% preference shares of ₹ 10 each. The company redeemed preference shares at a premium of *2 per share. For redemption it realized investments at a value of ₹ 1,60,000 (Book value ₹ 2,00,000). At the time of redemption balance in the profit & loss account was ₹ 1,60,000. Issued at a premium of ₹ 40 per share, such a number of equity shares of ₹ 100 each for the purpose of redemption as to ensure that after the compliance with the requirements of the Companies Act, 2013, the credit balance in profit and loss account would be ₹ 25,000. No. of equity shares to be issued are & balance transferred to capital redemption account

5 / 33

Preference shares amounting to ₹ 2,00,000 are redeemed at a premium of 5%, by the issue of equity shares amounting to ₹ 1,00,000 at a premium of 10%. The amount to be transferred to capital redemption reserve =?

6 / 33

During the year 2005-2006, T Ltd. issued 20,000, 12% Preference shares of ₹ 10 each at a premium of 5%, which are redeemable after 4 years at par. During the year 2010-2011, as the company did not have sufficient cash resources to redeem the preference shares, it issued 10,000, 14% debentures of ₹ 10 each at a premium of 10%. At the time of redemption of 12% preference shares, the amount to be transferred to capital redemption reserve =?

7 / 33

S Ltd. issued 2,000,10% Preference shares of ₹ 100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 Equity Shares of ₹ 100 each at a premium of 20% per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account =?

8 / 33

S Ltd. had 9,000 8% preference shares of ₹ 100 each, fully paid up. The company decided to redeem these preference shares at par by the issue of a sufficient number of equity shares. How much equity shares are required to be issued if new equity shares are to be issued at ₹ 12 for a premium including ₹ 2.

9 / 33

N Ltd. had 9,000 8% preference shares of ₹ 100 each, fully paid up. The company decided to redeem these preference shares at par by the issue of a sufficient number of equity shares. How many equity shares are required to be issued if new equity shares are to be issued at ₹ 10 each?

10 / 33

During the year a company used the balance it had in its securities premium account for all of the following purposes:(a) Write off expenses after the formation of the company(b Write off the cost of issuing bonus shares.(c) Write off goodwill acquired when another business was bought as a going concern.(cl) Write off expenses of issuing shares.

11 / 33

For which one or more of the following reasons does company law attempt to protect the balance in the Securities Premium account by specifying the reasons for which alone it may be applied?(a) It is part of the capital actually contributed by the shareholders.(b) It should be protected from erosion as part of the creditor’s buffer.(c) It is not realized in cash.(d) It is immoral to allow a company to make a profit by trading on its own shares.

12 / 33

For which one or more of the following reasons could a balance in the share premium be applied?(a) To issue bonus shares.(b) For distribution to shareholders as dividend.(c) To write down the value of assets, particularly when they are impaired.(d) To write off expenses of and commission on issuing the same shares

13 / 33

Which of the following statements is correct?

14 / 33

Which of the following statements is incorrect?

15 / 33

Which of the following statements is TRUE?

16 / 33

According to section 52 of the Companies Act, 2013, the amount in the Securities Premium A/c cannot be used for the purpose of:

17 / 33

Which of the following cannot be used for the purpose of creation of a capital redemption reserve account?

18 / 33

Which of the following statements is FALSE?

19 / 33

When Redeemable Preference shares are due for redemption, the entry will be

20 / 33

Which of the following statements is NOT TRUE with regard to the redemption of Preference shares?

21 / 33

Redeemable Preference shares can be redeemed out of _______

22 / 33

A preference shareholder can vote

23 / 33

Preference shares are entitled to a

24 / 33

To whom the bonus shares or rights shares can be issued?

25 / 33

Statement I:Another purpose to create CRR is to protect the interest of creditors since CRR cannot be utilized for the payment of dividends.The main purpose to create CRR is to keep the capital structure of the company variable.

26 / 33

Which of the following can be utilized in the redemption of preference share capital account?1. Profits available for dividend2. Capital Reserve3. Dividend Equalization Fund4. Development Rebate Reserve5. Proht Prior to Incorporation

27 / 33

As per the Companies Act, 2013 the companies cannot use the balance of Securities Premium for

28 / 33

Unless otherwise stated, a preference share is always deemed to be

29 / 33

A preference share is one that enjoys a:

30 / 33

As per the Companies Act, 2013, preference shares that are issued by a company engaged in an infrastructure project can issue preference shares that are redeemable after _____

31 / 33

The balance in capital redemption reserve is available for

32 / 33

No company limited by shares, issue any preference shares which is redeemable after the expiry of a period of_____from the date of issue

33 / 33

Capital Redemption Reserve Account may be applied to issue

Leave a Comment

Your email address will not be published. Required fields are marked *