Dividends can be paid only out of the current year's profit or free reserves available with the company relating to the current year. Dividends to the shareholders are declared out of the current year profits only.
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Q1
Consider the following statements: 1. The bonus shares shall not be issued in lieu of dividend, 2. A company may issue fully paid up bonus shares to its members out of its 'Capital Redemption Reserve Account' 3. A company may not issue bonus shares out of its 'Securities Premium Account' Which of the above statement/s is are not correct?
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Q2
Where a company creates a Debenture Redemption Reserve for the redemption of such debentures, the amount shall be credited, out of its ___every year until such debentures are redeemed.
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Q3
When preference shares are redeemed out of divisible profits, a transfer to Capital Redemption Reserve can be made out of _____________.
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Q4
A company issued 10,000 equity shares of Rs. 10 each at a premium 20% for the redemption of 15,000 preference share of Rs. 10 each. If the company had sufficient profit redemption reserve would be.
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Q5
Preference shares amounting to Rs. 2,00,000 are redeemed at a premium of 5%, by issue of shares amounting to Rs. 1,00,000 at a premium of 10 %. The amount to be transferred to capital redemption reserve will be _____.