FINANCIAL MANAGEMENT e-BOOK
Financial management e-book
CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114200 Points)
21 October 2013CMA. CS. Sanjay Gupta ("PROUD TO BE AN INDIAN") (114200 Points)
21 October 2013FINANCIAL MANAGEMENT e-BOOK
CA Pallav Singhania
(❤ Work Hard Party Harder ❤)
(31697 Points)
Replied 21 October 2013
Many many many Tanks Sanjay Bhaiya...
You always come with something very useful..
Thanks for sharing....
HarishVj
(student)
(47 Points)
Replied 21 October 2013
i have some doubts in accounting....i'm ipcc student i attached the file regarding my doubt please clarify. its from internal reconstruction...im not able to understand that journal entry.
@VaibhavJ
(Believe!! Live your dreams!)
(33506 Points)
Replied 21 October 2013
Thanks .. Really helpful.
panchi
(hr)
(22 Points)
Replied 21 October 2013
hello sanjay sir,
would u pls give me ur email id. i hv a problem in accounts.
Krishna Teja
(Chartered Accountant)
(1007 Points)
Replied 21 October 2013
Originally posted by : HarishVj | ||
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i have some doubts in accounting....i'm ipcc student i attached the file regarding my doubt please clarify. its from internal reconstruction...im not able to understand that journal entry. |
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Total No of 7% Preference shares with Face value Rs 50=12000(given in the balance sheet) , so this amount is debited Rs6,00,000(12000*5). so as to cancel the preference share capital
For each Preference share as per the scheme the consideration is as follows which will be Credited
1 )4 preference shares of Rs 10 each so the company will give Rs 480,000 (12000*4*Rs10)
2)6 Equity Shares of Rs2.5 each so the company will give Rs180,000 (12000*6*2.5)
The balanceing amount will be adjusted against the Reconstruction A/c i.e Rs 60,000(600,000-480,000-180,000)
Note-There will be no entry of the cancellation of arrears of dividend..since there is no entry recorded in the books.
Rohit
(CA-Final)
(1485 Points)
Replied 22 October 2013
1. To Cancel 7% PSC --> 7% PSC debited by Rs. 6,00,000
2. As mentioned in Question, you need to issue 4 new PS + 6 new ES for each PS.
3. No. of 5% PS to be issued : 12,000 * 4 = 48,000
4. No. of ES to be issued : 12,000 * 6 = 72,000
5. 5% PSC will be Rs. 4,80,000 (i.e 48,000 * 10) and ESC will be Rs. 1,80,000 (i.e. 72,000 * 2.5)
6. Total 7% PSC Cancelled is Rs. 6,00,000 and issued amount is Rs. 6,60,000 (i.e. 4,80,000 + 1,80,000), so extra amount will be debited to Capital Reconstruction A/c (i.e. 60,000).
Hence, Jounal Entry will be:
7% PSC Dr. 6,00,000
Capital Reduction a/c Dr. 60,000
To 5% PSC 4,80,000
To ESC 1,80,000
Note: No Entry is required for cancellation of Preference Dividend in Arrears.
Venu Gopal
(Chief Manager - Secretarial & Legal)
(301 Points)
Replied 22 October 2013
Thanks Mr Sanjay for your valuable support to CS students.
Uma
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