Question

Raj Ltd. purchased a machine from Anuj Tech Ltd. for Rs.1,90,000. As per purchase agreement, Rs. 10,000 were paid in cash and balance by issue of shares of Rs.100 each. Find the number of shares issued to Anuj Tech Ltd., if the shares issued at 20% premium.

• A. 3,000
• B. 2,000
• C. 1,500
• D. 1,000

Hint:

Shares pay for Rs. 1,80,000. Each share is issued at Rs. 120. Divide.

Answer 1

The Correct Option is C

Step 1: Understanding the Concept:
When a company buys an asset and pays partly in cash, the rest is paid by issuing shares to the vendor. The value of the shares issued must equal the unpaid part of the purchase price. Because the shares are issued at a premium, each share is valued at more than its face value.

Step 2: Key Formula:
\[ \text{Number of shares} = \frac{\text{Amount payable in shares}}{\text{Issue price per share}} \]

Step 3: Amount payable by shares:
Purchase price is Rs. 1,90,000 and Rs. 10,000 is paid in cash.
\[ 1{,}90{,}000 - 10{,}000 = 1{,}80{,}000 \]

Step 4: Issue price of one share:
Face value is Rs. 100 and the premium is 20% of 100, which is Rs. 20.
\[ \text{Issue price} = 100 + 20 = 120 \]

Step 5: Number of shares:
\[ \frac{1{,}80{,}000}{120} = 1{,}500 \]

Step 6: Check the other options:
3,000 shares at Rs. 120 would be Rs. 3,60,000, far too much. 2,000 shares would be Rs. 2,40,000, too much. 1,000 shares would be Rs. 1,20,000, too little. Only 1,500 shares gives Rs. 1,80,000.

Final Answer:
The company issued 1,500 shares, which is option 3. \[ \boxed{1{,}500 \text{ shares}} \]