Question : Puran Store Ltd., an Unlisted Company, is to redeem 5000,8% Debentures of Rs. 100 each on 30th June 2020. It has a balance of Rs. 10,000 in Debentures Redemption Reserve. It decides to set aside the amount to Debentures Redemption Reserve on 31st March 2020 on which date it has
following Reserves and Surplus: Rs. Securities Premium Reserve 25,000 Capital reserve Rs 20,000 General Reserve 30,000; and Surplus, i.e., Balance in Statement of Profit and Loss 30,000 Balance Rs. 40,000 can be set aside to Debentures Redemption Reserve from:
Option 1: Capital Reserve and General Reserve
Option 2: Capital Reserve and Securities Premium Reserve
Option 3: General Reserve and Surplus, i.e., Balance in Statement of Profit and Loss
Option 4: Securities Premium Reserve and Surplus, i.e., Balance in Statement of Profit and Loss
Correct Answer: General Reserve and Surplus, i.e., Balance in Statement of Profit and Loss
Solution : Answer = General Reserve and Surplus, i.e., Balance in Statement of Profit and Loss.
Only revenue nature profits are transferred to the Debenture redemption Reserve account, General reserve and surplus of profit and loss are used to create DRR.
Hence, the correct option is 3.
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Question : Pilot Pens Ltd. issued 5,000, 6% Debentures of Rs. 100 each at a discount of 20%. It had balance in Securities Premium Reserve of Rs. 60,000 and Rs. 10,000 in Surplus, i.e., Balance in Statement of Profit and Loss. Profit for the year before writing off the balance of Discount on the Issue of Debentures is Rs.20,000. Balance shown in the statement of profit and loss will be
Option 1: Rs 1,00,000
Option 2: Rs 10,000
Option 3: Rs 20,000
Option 4: Rs 30,000
Question : Choose which of the following statements is true.
Option 1: Debentures Redemption Reserve is set aside by all the companies except All India Financial Institutions regulated by RBI and Banking Companies.
Option 2: Amount is set aside to Debentures Redemption Reserve by Unlisted Companies which are not Non-Banking Finance Companies (NBFCs) or Housing Finance Companies (HFCs).
Option 3: Amount is set aside to Debentures Redemption Reserve by all Unlisted Companies.
Option 4: Debentures Redemption Investment is made by the companies required to set aside amount to Debentures Redemption Reserve.
Question : On 1st April, 2018 X Ltd. issued 20,000, 10% Debentures of Rs.100 each at a discount of 5% redeemable at a premium of 4% after 5 years. It decided to write off loss on issue of debentures in the year ended 31st March, 2019. It has the following balances : Capital Reserve Rs.1,00,000 and Securities Premium Reserve Rs.50,000.
Question:- At the time of writing off loss on issue of debenture. Statement of profit and loss account will be __________.
Option 1: Debited by Rs. 1,80,000
Option 2: Credited by Rs. 30,000
Option 3: Debited By Rs.1,30,000
Option 4: None of the above
Question:- At the time of writing off loss on issue of debentures, securities premium reserve account will be __________.
Option 1: Credited by Rs. 50,000
Option 2: Debited by Rs. 50,000
Option 3: Debited by Rs. 1,80,000
Option 4: Credited by Rs. 1,80,000
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