Home › Maharashtra HSC Class 12 (Commerce) › accountancy › Company Accounts › If a company issues 10,000 shares of Rs 10 each …
If a company issues 10,000 shares of Rs 10 each at a premium of Rs 2, the amount of Securities Premium is
ARs 20,000
BRs 1,00,000
CRs 1,20,000
DRs 80,000
Answer & Solution
Correct answer: A. Rs 20,000
1. Premium per share = Rs 2.
2. Total premium = 10,000 × Rs 2 = Rs 20,000.
3. Face value goes to Share Capital A/c; only the premium portion sits in Securities Premium A/c.
4. Hence (B) is correct.
_Source: Maharashtra Balbharati Std XII Book-Keeping & Accountancy, Ch 8 "Company Accounts - Issue of Shares", §8.1 ¶§8.1_
Related questions
On re-issue of forfeited shares, the maximum discount allowed isForfeiture of shares meansIf a share of face value Rs 10 is issued at Rs 8, this is'Calls in advance' represents'Calls in arrears' refers toSecurities Premium amount under Companies Act 2013 can be used forShares can be issued at a price higher than face value. This is called issue at