Securities Premium Questions

Hero Ltd. started a new venture of making casual shirts. The directors decided to issue $5,00,000$ shares of $\text{Rs. }10$ each at $\text{Rs. }12$ each. The following assets were purchased by the company:A building of $\text{Rs. }10$ lakhsFurniture of $\text{Rs. }7$ lakhsMachinery of $\text{Rs. }2$ lakhsThe company purchased cloth of $\text{Rs. }20$ lakhs and paid wages $\text{Rs. }5,00,000$ to the workers. The Directors also decided to buy $10,000$ shares of TATA Ltd. of $\text{Rs. }10$ each and at the end of the year Tata Ltd. paid $\text{Rs. }10,000$ as dividend.Security Premium Reserve can be used by Hero Ltd. for:

Securities Premium Reserve can be used to:A. Issue new shares to existing shareholdersB. Write off Preliminary expensesC. Writing off of GoodwillD. Premium on Redemption of debenturesE. Issue fully paid Bonus SharesChoose the correct answer from the options given below:

Securities Premium Account can be used only for the following purposes:(A) To issue partly paid bonus shares to the extent not exceeding unissued share capital of the company;(B). Buy back of own shares.(C). To write-off the expenses of, or commission paid, or discount allowed on any securities of the company;(D). To pay premium on the redemption of preference shares or debentures of the company.Choose the correct answer from the options given below:

The balance in the securities premium account cannot be used for which of the following purposes?

According to Section 52(2) of the Companies Act, 2013, the Securities Premium balance can be utilized for which of the following purposes?(A) Writing off preliminary expenses.(B) Issuing fully paid bonus shares.(C) Payment of dividends.(D) Buy-back of shares.Choose the correct answer from the options given below: