CA Inter P1 · Chapter 12 · Question 7 of 8
Case: The scheme of internal reconstruction of Lohit Ltd provides for: (i) 4,00,000 equity shares of ₹10 each fully paid to be reduced to ₹3 each; (ii) 1,00,000 8% preference shares of ₹100 each to be reduced to ₹80 each; (iii) trade payables of ₹12,00,000 to forgo 25% of their dues; and (iv) a director's loan of ₹5,00,000 to be waived. The total credit to the Capital Reduction Account is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹56,00,000
Explanation
Equity: 4,00,000 x 7 = 28,00,000. Preference: 1,00,000 x 20 = 20,00,000. Trade payables: 25% x 12,00,000 = 3,00,000. Director's loan waived: 5,00,000. Total = ₹56,00,000.
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