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    Question

    A company redeems preference shares of ₹5,00,000 at

    par out of fresh equity issue of ₹3,00,000 and balance from profits. Securities Premium balance = ₹80,000. What minimum amount must be transferred to Capital Redemption Reserve (CRR)?
    A ₹2,00,000 Correct Answer Incorrect Answer
    B ₹3,00,000 Correct Answer Incorrect Answer
    C ₹5,00,000 Correct Answer Incorrect Answer
    D ₹80,000 Correct Answer Incorrect Answer
    E Nil Correct Answer Incorrect Answer

    Solution

    Redemption = 5,00,000. New issue = 3,00,000. Balance 2,00,000 from profits → must transfer equal amount to CRR.

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