Hi, Ours is a Pvt Ltd Company. A share holder purhcased shares of face value Rs.10/- each for Rs.360/- in the company in year Nov 2010. Now the company bought back some of the shares at a price of Rs.1885/-. Please let me know what are the accounting entries need to be passed in the books of accounts for this transaction.
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Buyback of shares - accounting entries
Replies (4)
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Suppose company purchased 100 shares of face value rs.10 @ 1885/- |
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Share Capital Dr. 1000 |
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Security Premium Dr. 18,750.00 |
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Bank A/c Cr. 19,750.00 |
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(being 100 share buyback @ 1875/- premium) |
Dear Pankaj, thanks for your reply. We have also declared interim dividend until Sep-11. we have paid the dividend to all the share holders and also dividend tax has been paid. What would be accouting treatment for this.
Please help.
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your company gave interim dividend for half yearly co. performance |
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so first create provision |
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Dividend Dr. X |
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Dividend Dist. Tax Dr. X |
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Dividend Payable Cr. X |
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Dividend Dist. Tax Payble Cr. X |
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( Being interim dividend declared @ 20%(watever)) |
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when you will pay … |
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Dividend Payable Dr. X |
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Dividend Dist. Tax Payble Dr. X |
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Bank A/c Cr. X (Being dividend paid) |
| Originally posted by : Pankaj Arora | ||
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I think capital redemption reserve account should be credited to the extent of face value of equity capital. Just confirm Rgds, Ramesh
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