RECONSTRUCTION QUESTIONS

QUESTION 1

Juma Ltd received the sanction of the court for reducing its share capital for internal reconstruction

a) Cancellation of 25,000 old preference shares of N$20 each fully paid by the issue of same number of new preference shares of N$ 15 each full paid.

b) Cancellation of 25,000 old equity share of N$15 each full paid by the issue of equal number of equity shares of N$10 each full paid

c) To write off debit balance of profit and loss account of N$105,000

d) To reduce the value of machinery by N$ 45,000 and that of goodwill by N$20,000

e) To reduce the value of investment to market value by writing off N$ 40,000

Pass the journal entries in the books of Juma Ltd.