Question

A Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of B Ltd. for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 15% debentures of ₹ 100 each at 10% discount. The number of debentures to be issued is:

Options

• 6,600

• 5,400

• 6,000

• 4,500

Answer 1

6,000

Explanation:

Purchase Consideration = ₹ 6,00,000

Amount paid in cash = 10% of ₹ 6,00,000 = ₹ 60,000

Amount of Debentures issued = ₹ 6,00,000 − 60,000 = ₹ 5,40,000

Issue Price of Debenture = ₹ 100 − (10% of ₹ 100)

= ₹ 100 − ₹ 10

= ₹ 90

Number of Debentures issued = `(5,40,000)/90` = 6,000