alleryStart learning →New shares of Rs 6,50,000 replace old capital of Rs 5,00,000 in a merger. Gap adjusted in reserves?
ARs 1,00,000
BRs 50,000
CRs 1,50,000
DRs 6,50,000
Answer & Solution
Correct answer: C. Rs 1,50,000
Shares issued exceed the transferor's capital by 6,50,000 minus 5,00,000, so 1,50,000 is adjusted against reserves.
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