Question : Case Study: XYZ Ltd. - Raising Finance for Expansion

XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.

Questions : Equity Shares and Preference Shares

If XYZ Ltd. issues cumulative preference shares, it means that:

Option 1: The shares cannot be redeemed
  

Option 2: Dividends on these shares must be paid before any arrears
  

Option 3: These shares cannot be traded in the stock market

Option 4: The company is required to pay dividends at a fixed rate

Question : Case Study: XYZ Ltd. - Raising Finance for Expansion

XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.

Questions : Equity Shares and Preference Shares

If XYZ Ltd. issues cumulative preference shares, it means that:

Option 1: The shares cannot be redeemed
  

Option 2: Dividends on these shares must be paid before any arrears
  

Option 3: These shares cannot be traded in the stock market

Option 4: The company is required to pay dividends at a fixed rate

Question : Case Study: XYZ Ltd. - Raising Finance for Expansion

XYZ Ltd. is a growing company that manufactures electronic gadgets. The company has been successful in the market and is planning to expand its operations. To finance this expansion, XYZ Ltd. is considering various sources of business finance.

Questions : Equity Shares and Preference Shares

If XYZ Ltd. issues cumulative preference shares, it means that:

Option 1: The shares cannot be redeemed
  

Option 2: Dividends on these shares must be paid before any arrears
  

Option 3: These shares cannot be traded in the stock market

Option 4: The company is required to pay dividends at a fixed rate

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 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

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 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