CA Ragini (CA) (405 Points)
25 July 2011
The balance sheet as at 31st march 2006 is given-
6% CUM PREF SHARES OF 100 EACH 100000.00
The following scheme of reorganisation is santioned as under-
The treatment for preference shares is given as, The pref shares are converted from 6% to 15% but revalued in a manner in which the total return on them remains unaffected.
PLEASE TEL ME HOW TO CALCULATE THE NO. OF NEW PREFERENCE SHARES ALONG WITH STEPS AND WHAT AMT WILL BE TRANSFERRED TO RECONSTRUCTION ACCOUNT.
nimish solanki
(IPCC CLEARED)
(108 Points)
Replied 25 July 2011
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
kamal kishor sen
(STUDENT Rajasthan)
(2156 Points)
Replied 25 July 2011
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 )
mounika
(semi qualified chartered accountant)
(981 Points)
Replied 25 July 2011
nimish solanki
(IPCC CLEARED)
(108 Points)
Replied 25 July 2011
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
mounika
(semi qualified chartered accountant)
(981 Points)
Replied 25 July 2011
kamal kishor sen
(STUDENT Rajasthan)
(2156 Points)
Replied 26 July 2011
| 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.
peehu
(ipcc student)
(147 Points)
Replied 07 August 2011
| Originally posted by : kamal kishor sen | ||
|
|
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 ) |
this is the right answer |
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