Can anyone please explain me answer of this question? I didn't understand the answers given by icai. It is question 2 of mcq part of series 2 mock test paper September attempt.

Manan · 25 Aug 2024

Thank u so much for your help and thanks for much needed blessings

Pushan · 25 Aug 2024

(a) book vaule of investments is twice of market value. so, book value of investments whose market value is 1000 lakhs will be 2000 lakhs. so profit on sale of investment = 3000 - 2000 = 1000 lakhs (b) securities premium account is used here to pay the premium on redemption of pref shares. here, it is 250 lakhs. so remaining securities premium is 800-250 = 550 lakhs (c) 2500 lakhs of preference shares are being redeemed and 2000 lakhs of eq shares are being bought back. so, total amount to be transferred to crr would be 4500 lakhs (d) existing cash balance is 1650 lakhs. add 3000 lakhs to that from sale of investments and 2000 lakhs from bank loan. now subtract 4500 lakhs which is the nominal value or face value of the total eq and pref shares bought back and redeemed. now subtract 250 lakhs which is premium on redemption of pref shares and subtract 1000 which is premium on buying back of eq shares and the ans would be 900 lakhs. hope this helps and all the best for your upcoming attempt

Manan · 25 Aug 2024

Or please send me your workings

Manan · 25 Aug 2024

Can u please explain it?

Hazel · 25 Aug 2024

d) 900 lakh

Hazel · 25 Aug 2024

c) 4500 lakh

Hazel · 25 Aug 2024

b) 550

Hazel · 25 Aug 2024

a) 1000 lakh profit