Doubt in Internal Reconstruction.....

400 shares of Rs 100 each...

I think 1000  15% pref.shares of rs. 40 each

as they are to be converted in a maner dat return remains same.

previous return 100*6%=rs.6   ,hence new return should also be  6 

so revalued amt.=6*100/15=40 

and rs. 60000 will go to reconstruction a/c

6% preference share of100 each           = 1,00,000

Number of shares                                     =   1,000

Return  ( 6% on 1,00,000)                         =    6,000

The pref shares are converted from 6% to 15% but revalued in a manner in which the total return on them remains unaffected.

i.e. 6,000/15%         =  40,000

Number of prefernce shares   = 400 (40,000/100)

i.e. 15% preference share capital @ 100 each   =  40,000

Entry :-

 6% Prefrence share capital    a/c                     Dr.    1,00,000

          To 15% Preference share capital  a/c                                 40,000

          To Reconstruction  a/c                                                            60,000

NOTE:- TALLY YOUR ANSWER

RETURN WILL BE SAME i.e.

PREVIOUS RETURN           = 6,000  (6% ON 1,00,000)

NEW RETURN                      = 6,000 (15% ON 40,000 )

former we r getting a return of 6rs for every 100 invested. in d scheme reconstruction it was agreed that d rate of interst is 15%. total interst before reconstruction is 6000. after reconstruction also interst ll same.that means noe also we ll earn same interst.

                                              15---100

                                               6000--?

                            so num.of shares r 40000

and d entry is    6%preference share cap a/c dr-600000

                                            to    15%new prefernce share cap a/c 4000000

                                                    to reconstruction a/c                    200000

hi mounika .. only rs. 60000 will go to reconstruction a/c 

hw can u debit old cap as 600000 when the capital iyself is 100000

kamal's entry is correct

ya. i mso sry frnds. i just ans another question and printed it here. i m extremely so sorry. correct entry is

                     old 6% preference share cap a/c  dr-100000

                          to new 15% p. share cap a/c                    -40000

                           to recontruction a/c                                  -60000              

         plz excuse me

Originally posted by : mounika
	ya. i mso sry frnds. i just ans another question and printed it here. i m extremely so sorry. correct entry is                      old 6% preference share cap a/c  dr-100000                           to new 15% p. share cap a/c                    -40000                            to recontruction a/c                                  -60000                        plz excuse me

Excused hahhahah  

 dont worry mounika sabke sath hota h , keep answering.