Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing - Accountancy MCQ CUET Accountancy 2023 11 June Shift 3 2026 | ExamTest.live

hardMCQCUET Accountancy 2023 11 June Shift 32026Accountancy

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Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of Rs. 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of Rs. 45, 00, 000 . At the time of issue of Debenture they also issued equity Share of Rs. 30, 00, 000 at 20% premium.How much amount is to be debited in statement of profit and Loss to write off loss on Issue of Debentures?

Solution & Step-by-step Explanation

1. Calculate total Loss on Issue of Debentures: Discount on Issue = 50, 000 \times 10 = Rs. 5, 00, 000 Premium on Redemption = 50, 000 \times 25 = Rs. 12, 50, 000 Total Loss on Issue = 5, 00, 000 + 12, 50, 000 = Rs. 17, 50, 000 Utilize Securities Premium Reserve to write off the loss: Securities Premium from Equity Shares = 20% of 30, 00, 000 = Rs. 6, 00, 000 Balance Loss to be written off via the Statement of Profit & Loss: Net Amount Debited to P&L = Total Loss on Issue - Securities Premium Balance Net Amount Debited to P&L = 17, 50, 000 - 6, 00, 000 = Rs. 11, 50, 000

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Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of Rs. 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of Rs. 45, 00, 000 . At the time of issue of Debenture they also issued equity Share of Rs. 30, 00, 000 at 20% premium.How much amount is to be debited in statement of profit and Loss to write off loss on Issue of Debentures?

Rs. 12, 50, 000

Rs. 17, 50, 000

Rs. 5, 00, 000

Rs. 11, 50, 000

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