Internal reconstruction

The nominal value of 1 debenture is Rs.100 Own debentures -2000 debentures ###Nominal value is Rs.200000 i.e (Rs100/debenture) ###BOOK VALUE is Rs192000 i.e(Rs.192000/2000 =Rs96 per debenture When cancelling /selling debentures,the difference between realised Fair value (FV) and Book Value (BV) is capital reduction profit or loss Out of own 2000 debentures A. 800 debentures worth Rs.96 is sold for Rs.98 800 *2 = capital reduction profit Bank ac Dr 800 *98 To own debentures 800 *96 To capital reduction 800*2 Same way , B. Balance 1200 debentures worth Rs.96 were written off against Rs100 .1200 * Rs4 = capital reduction loss 12% debentures ac Dr 1200 *100 To own debentures 1200 *96 To capital reduction 1200 *4

Ashwin Kumar

CA Inter

★ 735

29-Aug-22 16:47

Kindly explain how did they arrive at the figure 76800

Thread Starter

Vysali Pasumarthy

CA Inter

★ 1K+

29-Aug-22 09:05

Thank you , I understood

Thread Starter

Vysali Pasumarthy

CA Inter

★ 1K+

30-Aug-22 23:41