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The document outlines various journal entries related to capital reduction, including debits and credits for equity and preference share capital, debentures, and fixed assets. It also presents a balance sheet showing total share capital, reserves, current liabilities, and fixed and current assets. The total assets amount to 28,45,000, matching the total liabilities and equity.

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17 views2 pages

Solution

The document outlines various journal entries related to capital reduction, including debits and credits for equity and preference share capital, debentures, and fixed assets. It also presents a balance sheet showing total share capital, reserves, current liabilities, and fixed and current assets. The total assets amount to 28,45,000, matching the total liabilities and equity.

Uploaded by

workspaceconsultancy24x7
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1 Equity Share Capital A/c ......

Dr 24,00,000 --
To Equity Share Capital A/c -- 9,60,000
To Capital Reduction A/c -- 14,40,000

2 Preference Share Capital A/c......Dr 12,00,000 --


To Preference Share Capital A/c -- 9,00,000
To Capital Reduction A/c -- 3,00,000

3 10% Debentures A/c ......Dr 6,00,000 --


To Stoch A/c -- 2,60,000
To Debtors A/c -- 2,80,000
To Capital Reduction A/c -- 60,000

4 Land & Building A/c ........Dr 3,60,000 --


To Capital Reduction A/c -- 3,60,000

5 Capital Reduction A/c ........Dr 5,40,000 --


To Plant & Machinery A/c -- 5,40,000

6 Capital Reduction A/c. .......Dr 5,000 --


To Bank A/c -- 5,000

7. Capital Reduction A/c ......Dr 16,15,000 --


To Goodwill A/c -- 90,000
To Profit &Loss A/c -- 14,00,000
To Preliminary Expenses A/c -- 40,000
To Capital Reserve A/c 85,000

Balance Sheet
Particular Amount Amount
A) Share Capital
Equity Share Capital 9,60,000
Preference Share Capital 9,00,000 18,60,000

B) Reserve & Surplus


Capital Reserve -- 85,000

C) Current Liabilities:
Bank Overdraft 6,00,000
Creditors 3,00,000 9,00,000

28,45,000
Assets:
A) Fixed Assets:
Land & Building 15,60,000
Plant & Machinery 12,60,000 28,20,000

B) Current Assets:
Cash in Hand (30,000 -5,000) 25,000
28,45000

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