If there is debit balance of capital reduction a/c in internal recontruction, then with what it should be adjusted Capital Reserve a/c or Goodwill a/c?
dipesh mehta
(CA FINALIST)
(157 Points)
Replied 14 March 2013
I think it would be Goodwill a/c since it has a dr balance...but wait for experts to confirm it.
CA Suraj Lakhotia
(IndigoLearn)
(4898 Points)
Replied 14 March 2013
Goodwill would also be written off in most of the cases, thereby further increasing the balance in capital reduction account.
(It would be very difficult for a company who is under going reconstruction to establish the value of Goodwill)
The debit balance is Capital Reduction Account would be transfered to Capital reserve.
ramcharan
(articled assistent)
(367 Points)
Replied 14 March 2013
That is to be transferred to capital reserve a/c
sidhant saha
(prop)
(1394 Points)
Replied 14 March 2013
the debit balance in capital reduction account is to be transferred to capital reserve
dipesh mehta
(CA FINALIST)
(157 Points)
Replied 14 March 2013
I accept my answer was wrong ...it would be Capital Reserve...sorry for misguiding.
rakshita
(Ca final student)
(84 Points)
Replied 15 March 2013
it should be transfered to capital reserve account.
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