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Internal reconstruction
Accountancy
Please explain (2) adjustment and also in (6) there’s no journal entry and didn’t quite understand the balance used for trademarks and goodwill
Answers (1)
Preference shares - dividend no adjustment as nothing is paid. Reduce Rs. 50 preference shares and replace with 4 Pref share of Rs. 10 (40) and 3 equity shares of 5. Dr. PSC 50 Dr Capital Reduction 5 Cr. New PSC 40 Cr ESC 15 The balance left in capital reduction account after writing off PL dr balance and reduciton in plant value is to used to write off goodwill and trademarks.
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