Internal resnostruction

In that case, that is preference dividend in arrears. That means it's not recorded in books previously. So that the the waived amount won't get any entry y because that's not exist in books.

Likhitha Sivani

CA Final

★ 14K+

09-May-23 15:26

The preference dividend for four year is - 4000*100*6%*4=96,000 3/4 is waived off and only 1/4 is given i.e; 96000*1/4=24000 That 24000 is in form of equity share i.e; 24000/2 =12000 shares

Radhika Bajaj

CA Inter

★ 3K+

09-May-23 15:00

That is why total no of equity has these 12000share adj in total

Radhika Bajaj

CA Inter

★ 3K+

09-May-23 15:02

There is no preference dividend in books so that we took the amount from reconstruction account that's y the entry is reconstruction a/c Dr To equity share capital a/c. U got the point? Or u want me to explain again?

Likhitha Sivani

CA Final

★ 14K+

09-May-23 15:28

The entry is capital reduction account dr and not reconstruction account to equity share capital account cr

Radhika Bajaj

CA Inter

★ 3K+

09-May-23 15:36

Reconstruction is the another name capital reduction. We can usw either of the one. If question specifically asks a name we should use that

Likhitha Sivani

CA Final

★ 14K+

09-May-23 15:38

Ohk

Radhika Bajaj

CA Inter

★ 3K+

09-May-23 15:40

What i explained above is right or not

Radhika Bajaj

CA Inter

★ 3K+

09-May-23 15:42

Haa yes radhika it's correct. But she is asking about entry formation. You explained about the amount calculation. So that I gave reply for the entry

Likhitha Sivani

CA Final

★ 14K+

09-May-23 15:43

Ohk

Radhika Bajaj

CA Inter

★ 3K+

09-May-23 16:04