ABC Ltd. Purchased for cancellation its own 5,000, 9% Debentures of Rs

1.	ABC Ltd. Purchased for cancellation its own 5,000, 9% Debentures of Rs.100 each for Rs.95 per debenture. The brokerage charges Rs.15,000 were incurred. Calculate the amount to be transferred to capital reserve.
Answer» Amount paid for 5,000 Debentures= 4,75,000+15,000= Rs. 4,90,000 The nominal value of debentures to be redemption/cancelled= Rs.5,00,000 Amount of profit on redemption to be transferred to capital reserve =Rs. 5,00,000- Rs.4,90,000= Rs.10,000

ABC Ltd. Purchased for cancellation its own 5,000, 9% Debentures of Rs.100 each for Rs.95 per debenture. The brokerage charges Rs.15,000 were incurred. Calculate the amount to be transferred to capital reserve.

Answer»

Amount paid for 5,000 Debentures= 4,75,000+15,000= Rs. 4,90,000

The nominal value of debentures to be redemption/cancelled= Rs.5,00,000

Amount of profit on redemption to be transferred to capital reserve

=Rs. 5,00,000- Rs.4,90,000= Rs.10,000

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ABC Ltd. Purchased for cancellation its own 5,000, 9% Debentures of Rs.100 each for Rs.95 per debenture. The brokerage charges Rs.15,000 were incurred. Calculate the amount to be transferred to capital reserve.

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