Advanced AccountingQuestion 5308 of 305
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11. What will be the balance of capital redemption reserve as on 31st March 2025?

Options

A` 280 Lakhs
B` 330 Lakhs
C` 250 Lakhs
D` 130 Lakhs
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Correct Answer

✅ Option B — ` 330 Lakhs

All Options:

  • A` 280 Lakhs
  • B` 330 Lakhs ✓
  • C` 250 Lakhs
  • D` 130 Lakhs

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Detailed Solution & Explanation

To calculate the balance of Capital Redemption Reserve (CRR) as on 31st March, 2025:
1. CRR is required to be created under Section 55 (redemption of preference shares out of free reserves) and Section 68 (buyback of equity shares out of free reserves).
2. CRR created for preference share redemption = ‘ 200\displaystyle `\,200 Lakhs (nominal value of redeemed preference shares).
3. CRR created for buyback of equity shares = 8,00,000ב 10=‘ 80\displaystyle 8,00,000 \times `\,10 = `\,80 Lakhs (nominal value of shares bought back).
4. Total CRR created = 200+80=‘ 280\displaystyle 200 + 80 = `\,280 Lakhs.
5. Closing CRR balance = Opening CRR (50\displaystyle 50) + CRR Created (280\displaystyle 280) = ‘ 330\displaystyle `\,330 Lakhs.
Hence, **Option B** is the correct answer.

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