Page 129 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Date Particulars L.F. (`) (`)
April 1 9% Redeemable Preference Share Capital Account Dr. 4,00,000
Premium on Redemption Account Dr. 40,000
Accounting for Companies-I
To Preference Shareholders Account 4,40,000
(Being amount due to preference shareholders on redemption)
Share Premium Account Dr. 40,000
Notes To Premium on Redemption Account 40,000
(Being utilisation of share premium in writing off the premium on
redemption)
General Reserve Account Dr. 1,00,000
Profit and Loss Account Dr. 1,00,000
To Capital Redemption Reserve A/c 2,00,000
(Being the utilisation of general reserve and profits for redemption
of preference shares)
Bank Account Dr. 2,10,000
To Investment Account 2,00,000
To Profit and Loss Account 10,000
(Investments sold and profit transferred to P. & L. A/c)
Bank Account Dr. 2,00,000
To 7% Preference Share Capital Account 2,00,000
(Being receipt of amount on issue of 2,000 shares)
Preference Shareholders Account Dr. 4,40,000
To Bank Account 4,40,000
(Being amount paid off to preference shareholders on redemption)
Capital Redemption Reserve Account Dr. 2,00,000
Profit and Loss Account Dr. 50,000
To Bonus to Shareholders Account 2,50,000
(2,500 bonus shares declared to 5,000 existing equity shareholders)
Bonus to Shareholders Account Dr. 2,50,000
To Equity Share Capital Account 2,50,000
(Being bonus shares issued)

Balance Sheet of Jumbo Limited
as on 31st March, 2006

Liabilities ( ) Assets ( )
Share Capital: Fixed Assets 9,00,000
Issued and Subscribed: Investments Nil
7,500 equity shares of 100 each fully paid up (2,500 equity 7,50,000 Current Assets:
shares were issued as bonus shares out of Capital Redemption
Reserve and Profit and Loss A/c)
Stock 1,00,000
3,000; 8% Redeemable Preference shares of 100 each, 80 2,40,000 Sundry Debtors 2,00,000
paid up
2,000; 7% Preference Shares of 100 each 2,00,000 Bank Balance 2,70,000
Reserve and Surplus:
Share Premium 20,000
Capital Reserve 1,00,000
Profit and Loss Account (2,00,000 + 10,000 – 50,000 – 1,00,000) 60,000
Current liabilities:
Creditors 1,00,000
14,70,000 14,70,000

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