Following a series of trading losses, Failure Ltd. resolved to reduce its capital to 50,000, Equity Shares
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Following a series of trading losses, Failure Ltd. resolved to reduce its capital to 50,000, Equity Shares of ₹ 4 each, fully paid and to eliminate its Securities Premium Account. The Company’s Balance Sheet prior to implementation of new scheme was:
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I. EQUITY AND LIABILITIES (1) Shareholders' Funds: Balance Sheet of Failure Ltd. as at 31st March, 2016 (a) Share Capital -50,000 Equity Shares of ₹ 10 each (b) Reserves and Surplus --- Securities Premium Reserve Profit and Loss Account Particulars (1) (2) Share Application Money Pending Allotment : (3) Non-current Liabilities: (4) Current Liabilities: (a) Short-term Borrowings - Bank Loan (b) Trade Payables ---Creditors TOTAL Note No. (2) Amount (₹) (3) 5,00,000 50,000 (95,000) - 97,000 1,62,000 7,14,000
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To implement the scheme of reducing capital and eliminating the Securities Premium Account as described we need to record the necessary journal entrie...View the full answer
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Corporate Accounting As Per The Companies Act 2013 Including Rules 2014 And 2015
ISBN: 9789352605569
2nd Edition
Authors: M Hanif, A Mukherjee
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