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Commerce · Q1247

Accounting

Graduate and Post Graduate · Commerce · question 1247

Q1247

A company redeemed its 2,00,000/- preference shares. For this it issued equity share capital of Rs. 1,50,000/- and Rs. 1,00,000/- bonus shares were also issued. What will be the net effect of these transactions on fund flow

A.
No effect on fund flow
B.
Increase of Rs. 50,000/- in working capital
C.
Decrease of Rs. 50,000/- in working capital
Answer
D.
None of the above

Answer: Option C

Solution

Answer: Option C
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