Question

Romi Ltd. purchased building worth ₹1,50,000 machinery worth ₹1,40,000 and furniture worth ₹10,000 from xyz co. and took over its liabilities of ₹20,000 for a purchase consideration of ₹3.15,000. They paid the purchase consideration by issuing 12% debentures of ₹100 each at a premium of 5%. What will be the number of debentures issued by Romi Ltd.

• A. 4000
• B. 3500
• C. 3000
• D. 2000

Answer 1

The Correct Option is C

To determine the number of debentures issued by Romi Ltd., follow these steps:

1. Determine the Total Assets Acquired:
   • Building: ₹1,50,000
   • Machinery: ₹1,40,000
   • Furniture: ₹10,000
   Total assets = ₹1,50,000 + ₹1,40,000 + ₹10,000 = ₹3,00,000
2. Consider Liabilities Taken Over:
   Romi Ltd. took over liabilities worth ₹20,000.
3. Understand Purchase Consideration:
   The purchase consideration is ₹3,15,000.
4. Calculate the Debentures to Be Issued:
   The debentures are issued at 12% with a face value of ₹100 each but at a premium of 5%. Therefore, the issue price per debenture is:
   
   Issue price = Face value + Premium = ₹100 + ₹5 = ₹105
5. Calculate Number of Debentures Issued:

   Number of debentures	=	Purchase Consideration / Issue Price per Debenture
   Number of debentures	=	₹3,15,000 / ₹105
   Number of debentures	=	3000

Thus, the number of debentures issued by Romi Ltd. is 3000.