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On 1st April 2022… (Class 12 Accountancy SQP 2023-24, Q3b)

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AccountancyCBSE Class 12 · Sample paper, session 2023-24 · 1 mark · MCQ

CBSE Class 12 Accountancy sample paper 2023-24: question 3(b)

From the official CBSE sample question paper for 2023-24, section A, question 3(b), for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q3(b) · 1 mark · MCQIssue and Redemption of Debentures

On 1st April 2022, Galaxy ltd. had a balance of ₹8,00,000 in Securities Premium account. During the year company issued 20,000 Equity shares of ₹10 each as bonus shares and used the balance amount to write off Loss on issue of Debenture on account of issue of 2,00,000, 9% Debentures of ₹100 each at a discount of 10% redeemable @ 5% Premium. The amount to be charged to Statement of P&L for the year for Loss on issue of Debentures would be:

  1. (A)₹30,00,000.
  2. (B)₹22,00,000.
  3. (C)₹24,00,000.
  4. (D)₹20,00,000.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2023-24.

Hints

Open one hint at a time and try again before the next.

Hint 1

Bonus shares use up part of the Securities Premium first.

Hint 2

Loss on issue = discount + premium payable on redemption.

Hint 3

What the premium balance cannot cover goes to the Statement of Profit and Loss.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Securities Premium left after the bonus issue = ₹ 8,00,000 − 20,000 × ₹ 10 = ₹ 6,00,000. Face value of debentures = 2,00,000 × ₹ 100 = ₹ 2,00,00,000; loss on issue = discount 10% (₹ 20,00,000) + premium on redemption 5% (₹ 10,00,000) = ₹ 30,00,000.

  2. Securities Premium absorbs ₹ 6,00,000; the rest, ₹ 24,00,000, is charged to the Statement of Profit and Loss. Option (C).

    1 mark

Answer: (C) ₹24,00,000.

Where the marks are

  • Loss ₹ 30,00,000 less Securities Premium ₹ 6,00,000 left after the bonus issue (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Issue and Redemption of Debentures, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2023-24: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.