Question 02 Chapter 10 of +2-A – T.S. Grewal 12 Class

Question 02 Chapter 10 of +2-A

2. Young India Ltd. had issued the following debentures:
(a)1,00,000, 10% fully convertible debentures of  100 each on 1st April 2016 redeemable by conversion after 5 years.
(b)20,000, 10% Debentures of  100 each redeemable after 4 years, 25% Debentures in Cash and 75% by conversion.
State the amount of DRR required to be created as per the Companies Act,2013.

The solution of Question 02 Chapter 10 of +2-A: – 

a. There is no need for the creation of DRR because these debentures are fully convertible.

b DRR would be created for non-convertible part of debentures.

Amount Required to be transferred to DRR = 25% of Face value of Debentures(Non-convertible)
= 25% of Rs 5,00,000(20,00,000 × 25%) = Rs1,25,000

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Also, Check out the solved question of previous Chapters: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 – Company Accounts –  Accounting for Share Capital
• Chapter No. 9 – Company Accounts – Issue of Debentures
• Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis 
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication