Advanced AccountingQuestion 5310 of 305
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13. What will be the Balance of Reserves as on 31st March 2025 excluding capital redemption Reserve?

Options

AGeneral Reserve and Profit Loss ` 323 Lakhs and securities Premium ` 10 lakhs
BGeneral Reserve and Profit Loss ` 243 Lakhs and securities Premium ` 10 lakhs
CGeneral Reserve and Profit Loss ` 323 Lakhs and securities Premium ` 15.60 lakhs
DGeneral Reserve and Profit Loss ` 243 Lakhs and securities Premium ` 15.60 lakhs
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Correct Answer

Option CGeneral Reserve and Profit Loss ` 323 Lakhs and securities Premium ` 15.60 lakhs

All Options:

  • AGeneral Reserve and Profit Loss ` 323 Lakhs and securities Premium ` 10 lakhs
  • BGeneral Reserve and Profit Loss ` 243 Lakhs and securities Premium ` 10 lakhs
  • CGeneral Reserve and Profit Loss ` 323 Lakhs and securities Premium ` 15.60 lakhs
  • DGeneral Reserve and Profit Loss ` 243 Lakhs and securities Premium ` 15.60 lakhs

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Detailed Solution & Explanation

To compute the Balance of Reserves (excluding CRR) as on 31st March, 2025:
1. General Reserve & Profit and Loss Account (Combined):
- Opening balance = 600\displaystyle `\,600 Lakhs.
- Add: Profit on sale of investment = 9895=3\displaystyle 98 - 95 = `\,3 Lakhs.
- Less: Transfer to CRR = 200\displaystyle 200 (preference shares) +80\displaystyle + 80 (buyback) = 280\displaystyle `\,280 Lakhs.
- Closing balance = 600+3280=323\displaystyle 600 + 3 - 280 = `\,323 Lakhs.
2. Securities Premium:
- Opening balance = 100\displaystyle `\,100 Lakhs.
- Add: Premium on exercise of option = 56,000 shares @ 10\displaystyle `\,10 per share (discount of 5 is adjusted from options outstanding) = 5.60\displaystyle `\,5.60 Lakhs.
- Less: Premium on preference share redemption = 10\displaystyle `\,10 Lakhs.
- Less: Premium on buyback = 8,00,000×(2010)=80\displaystyle 8,00,000 \times (20 - 10) = `\,80 Lakhs.
- Closing balance = 100+5.601080=15.60\displaystyle 100 + 5.60 - 10 - 80 = `\,15.60 Lakhs.
Hence, **Option C** is the correct answer.

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