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The balance sheet of Suraj Ltd., as on 31 st December 2011, was as under. The company passed the following

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The balance sheet of Suraj Ltd., as on 31st December 2011, was as under.

The company passed the following resolutions on 1st January 2012. 

(a). To redeem the entire preference share capital at a premium of 10%. 

(b). To issue 2,000 equity shares of ₹10 each, at a premium of ₹2 per share, which have been fully subscribed. 

(c). To sell the investment at ₹15,000. 

(d). To issue the bonus shares as fully paid in the ratio of 2:1 to the existing shareholders, including the fresh issue.

Draft the journal entries and prepare the balance sheet, as on 1st January 2012. 

Transcribed Image Text:

Liabilities 5,000 6% Redeemable Preference Shares of 10 each, fully paid 6,000 Equity Shares of ₹10 each fully paid General Reserve Securities Premium Profit & Loss A/c Creditors 50,000 60,000 40,000 20,000 5,000 25,000 2,00,000 Assets Fixed Assets Current Assets Investment Bank (3³) 1,00,000 62,000 20,000 18,000 2,00,000

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Journal Entries a Redemption of Preference Shares Preference Share Capital A c 50 000 Sec…View the full answer


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Corporate Accounting

Corporate Accounting

ISBN: 9789353160739

1st Edition

Authors: Anita Raman, P. Radhika

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Question Details
Chapter # 3- REDEMPTION OF PREFERENCE SHARES..
Section: OTHER EXERCISES
Problem: 19
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Question Posted: August 31, 2023 04:47:25
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