Question

X Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 20 thousand from Y Ltd. X Ltd. issued 8% debentures of ₹ 200 each at a discount of 10% as purchase consideration. Number of debentures issued will be ______.

Options

• 11,000

• 9,000

• 10,000

• 10,100

Answer 1

X Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 20 thousand from Y Ltd. X Ltd. issued 8% debentures of ₹ 200 each at a discount of 10% as purchase consideration. Number of debentures issued will be 11,000.

Explanation:

1. Calculate the Purchase Consideration:

Assets acquired = ₹ 20,00,000

Creditors taken over = ₹ 20,000

Purchase Consideration = Assets acquired − Creditors taken over

Purchase Consideration = ₹ 20,00,000 − ₹ 20,000 = ₹ 19,80,000.

2. Calculate the Issue Price of each Debenture:

Face value of debenture = ₹ 200

Discount = 10% of ₹ 200 = ₹ 20

Issue Price per debenture = Face value − Discount

Issue Price per debenture = 200 − 20 = 180

3. Calculate the Number of Debentures Issued:

Number of debentures = `"Purchase Consideration"/"Issue Price per debenture"`

Number of debentures = `(19,80,000)/180` = 11,000