"A' Company has received share application money in cash during the year. Instead of alloting the share of "A" Company it transer the investment which exist in his books to these shareholders is it legal?
Balance sheet of A company
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Capital Assets
Share application Money in cash Investment in shares to
from
shareholders x 50000 In shares of Company abc 50000
Question
Can the company A which has received share appliocation money in cash from Mr. X , intstaed of alloting its own shares can it sell it investment in abc company to Mr. x so that Mr. X become the shareholders of Comapny abc: by merely passing a book entry.
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