Super Ltd., a manufacturing company, has the following summarized Balance Sheet as of March 31, 2024: Equity Shares of 10 each fully paid…

CA Intermediate · Advanced Accounting · MTP · January 2025
Super Ltd., a manufacturing company, has the following summarized Balance Sheet as of March 31, 2024: Equity Shares of 10 each fully paid up:17,00,000 Reserves & Surplus: Revenue Reserve:23,50,000Securities Premium:2,50,000Profit & Loss Account:2,00,000Infrastructure Development Reserve:1,50,000 Secured Loan: 9% Debentures:38,00,000 Unsecured Loan:8,50,000 Property, Plant & Equipment:58,50,000 Current Assets:34,50,000 Super Ltd. plans to buy back 35,000 equity shares of 10 each fully paid up on April 1, 2024, at 30 per share. The buyback is authorized by its articles, and necessary resolutions have been passed. The payment for the buyback will be made using the company's bank balance, which is part of its current assets. Answer the following questions based on the above information:
(A) 20% of its total paid-up capital and free reserves
(B) 25% of its total paid-up capital and free reserves
(C) 25% of its total paid-up capital
(D) 20% of its total paid-up capital

Suggested Answer and Working Notes:

Correct Answer: Option (A)

20% of its total paid-up capital and free reserves

Topics: Buyback of Securities, Preparation of Financial Statements

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