1.

Shubh Limited has the following balances appearing in its Balance Sheet: `{:("Securities Premium Reserve",,Rs.,"22,00,000"),("9% Debentures",,Rs.,"1,20,00,000"),("Underwriting Commission",,Rs.,"10,00,000"):}` The company decided to redeem its 9% Debentures at a premium of 10%. You are required to suggest the ways in which the company can utilise the securities premium amount.

Answer» (i) Utilise Rs. 10,00,000 to write off Underwriting Commission.
(ii) Utilise balance Rs. 12,00,000 to write off Premium on Redemption of 9% Debentures.


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