A Ltd. has 20,00,000 outstanding equity shares of ₹ 100 each. What is the provision for the issue of sweat equity shares and how many sweat equity shares can be issued by A Ltd. ?

CS Executive · Corporate and Management Accounting · PYQS · June 2024
A Ltd. has 20,00,000 outstanding equity shares of ₹ 100 each. What is the provision for the issue of sweat equity shares and how many sweat equity shares can be issued by A Ltd. ?
(A) A company can issue 15% of the outstanding equity shares capital in a year or ₹ 5 crore w.e.h., A Ltd. can issue ₹ 5 crore equity shares as sweat equity
(B) A company can issue 15% of the outstanding equity shares capital in a year or ₹ 2 crore w.e.h., A Ltd. can issue ₹ 3 crore equity shares as sweat equity
(C) A company can issue 10% of the outstanding equity shares in a year or ₹ 5 crore w.e.h., A Ltd. can issue ₹ 5 crore equity shares as sweat equity
(D) A company can issue 10% of the outstanding equity shares capital in a year or ₹ 2 crore w.e.h., A Ltd. can issue ₹ 2 crore equity shares as sweat equity

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Corporate Accounting

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