Page 103 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes Interest on Debentures Accrued A/c Dr. 24,000
To Reconstruction A/c 24,000
(Being accrued interest on debentures utilized in
capital reduction)

Reconstruction A/c Dr. 9,600
To Preference Shares Dividend A/c 9,600
(Being declaration of Preference Shares dividend out
of Reconstruction Account)
Preference Shares Dividend A/c Dr. 9,600
To Equity Share Capital A/c 9,600
(Being payment of preference shares dividend by
issue of equity shares of ` 5 each)
Share Premium A/c Dr. 4,00,000
To Reconstruction A/c 4,00,000
(Being written off of Share Premium Account)
Reconstruction A/c Dr. 19,74,400
To Goodwill A/c 1,36,000
To Patents A/c 1,76,000
To Preliminary Expenses A/c 2,58,400
To P & L A/c 6,84,000
To Freehold Assets A/c 2,40,000
To Machinery A/c 4,80,000
(Being utilization of the amount of capital reduction
in writing off the fictitious assets and accumulated losses)
Working Note:

reconstruction a/c
particulars ` particulars `
To Preference Shares Dividend 9,600 By Equity Share Capital 14,40,000
To Goodwill 1,36,000 By Preference Share Capital 1,20,000
To Patent 1,76,000 By Int. on Debentures 24,000
To Preliminary Expenses 2,58,400 By Share Premium 4,00,000
To P & L A/c 6,84,000

To Balance (transferred to Freehold Assets
and Machinery in the ratio of 1:2) 7,20,000
19,84,000 19,84,000

Balance sheet of D k manufacturing co. ltd
as on 30 June, 2006
th
liabilities ` assets `
Share Capital: Fixed Assets:
12,000 8% Preference Freehold Assets

98 lovely professional university