alleryIf 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_
Keep practising Company Accounts
Browse all Company Accounts questions for CA Foundation, or explore more Accountancy topics.
Related questions