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Doubt ? Please help

IPCC 682 views 3 replies

Internal Reconstruction :

Balance sheet shows :

Sundry Creditors : 4,50,000

 

Adjustment :

a) The claim of Sundry creditors shall be reduced to 80 %

 

Solution :

 

Sundry Creditors                                   Dr.                               3,60,000 or 90,000

                         To Capital Reduction                                                              3,60,000 or 90,000

 

What should be there ? 3,60,000 or 90,000.

Replies (3)

It should be Rs. 90,000 .As the creditors claim shall be reduced to 80%. That means creditors should be shown in reconstructed balance sheet at 3,60,000(4,50,000*80%).

IN THE BALANCE SHEET IT SHOULD BE SHOWN AS 360000

creditors should be shown in balance sheet at 360000. bcoz creditors has credit bal. if such creditors r reduced den reduced valve of creditors r debited and present value is shown in balance sheet. entry ll b

                                          old creditors a/c-dr 450000

                                                         to cap. reductiona/c 90000

                                                          to creditors a/c          3600000


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