banner_ad

Doubt ?? reconstruction

Accounting Entries 688 views 6 replies

What should be the Journal Entry?

 

1. Creditors shall be reduced to  50 Percent, it is to be settled by the issue of equity shares of Rs. 10 each out of shared surrendered.

Liabilities Side of B/s shows Creditors of Rs. 72000

 

Solution :

According to Study Material

--------------------------------------------------------------------------------------

Creditors A/c               Dr.                                 72000

             To Reconstruction A/c                                       72000

 Is it correct ? While the question specifically asked for 50 % reduction i.e 36000

--------------------------------------------------------------------------------------

 

Please help me out....

Replies (6)

 

 

--------------------------------------------------------------------------------------

Creditors A/c               Dr.                                 72000

             To Reconstruction A/c                                       72000

 Is it correct ? While the question specifically asked for 50 % reduction i.e 36000

--------------------------------------------------------------------------------------

 

Please help me out....
 

It says creditors are to be fully settled for issue of equity shares after reduction to 50 % . This means they are waving off whole creditors (50% by reconstruction & 50% by issue of shares) ..so it is a combined entry for reduction of creditors. 

next entry would be 

Share surrender Dr....36000

To Equity shares A/c  ...36000 

(shares surrendered being utilized in issuing equity shares )

 

 

Thank you so much for reply

Thanks Friend now i got the point....................But how do i recognise that question asks for Full settlement. It seems that i am not being able to cope the language of question. Is there any indication in question that the same is for fully settlement.

 

Originally posted by : Krish

Thank you so much for reply

Thanks Friend now i got the point....................But how do i recognise that question asks for Fully settled. It seems that i am not being able to cope the language of question. Is there any indication in question that the same is for fully settled.

 

you r most welcome:) .. When they say "such amount is to be settled" . It means they want to wave off whole amount against something. 

Now its clear..........I am very grateful to you. Thank you.

No need to thank me brother.:) We all are here to learn and share .:D

Creditors shall be reduced to  50 Percent,

Creditors a/c     dr  36,000

  To Reconstruction a/c   36000

it is to be settled by the issue of equity shares of Rs.10 each out of shared surrendered.

 

Share surrender Dr....36000

To Equity shares A/c  ...36000 

(shares surrendered being utilized in issuing equity shares )


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 15 May 2026
ARTICLE ASSISTANT, TRAINEE AND PAID ASSISTANT

YOGESH KAPOOR AND ASSOCIATES

New Delhi

B.Com

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details
Company
22 May 2026
Audit assistant

Displayandbeyond

Mumbai

CA

View Details
Company
22 May 2026
Sr. Financial Analyst - Consolidation

Search Synergy

Mumbai

CA

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
14 May 2026
ICSI Trainees for 21 Months and Semi-Qualified CS

CMNITY HIRE

New Delhi

Others

View Details
Company
ARTICLESHIP 27 May 2026
CA Article Trainee

Rahul Dang & Associates-Chartered Accountants

Pune

CA Inter

View Details