Question

Sunrise Ltd. purchased machinery of ₹ 11,50,000 from Indian Traders, payment was made as follows: ₹ 1,00,000 by cheque and balance by issue of equity shares of nominal (face) value of ₹ 100 each fully paid at an issue price of ₹ 105 each. Amount of securities premium will be

Options

• ₹ 60,000.

• ₹ 70,000.

• ₹ 50,000.

• ₹ 40,000.

Answer 1

₹ 50,000.

Explanation:

Balance payable by issue of shares:

₹ 11,50,000 − ₹ 1,00,000 = ₹ 10,50,000

Number of shares issued:

₹ 10,50,000 ÷ ₹ 105 = 10,000 shares

Premium per share:

₹ 105 − ₹ 100 = ₹ 5

Therefore, Securities Premium:

10,000 × ₹ 5 = ₹ 50,000​