3 Marks Question

Question 13 Marks

Z Ltd. had issued following debentures:

1,00,000, 10% fully convertible debentures of ₹ 100 each on 1st April, 2016 redeemable by conversion after 5 years.
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.

Answer

There is no need for creation of DRR because these debentures are fully convertible.
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 ₹ 5,00,000(20,00,000 × 25%)
= ₹ 1,25,000

Accountancy 3 Marks Question