CA Inter P1 · Chapter 12 · Question 5 of 8
Case: Under a reconstruction scheme of Kiran Ltd, holders of 12% debentures of ₹20,00,000 agree to accept 9% debentures of ₹15,00,000 and equity shares of ₹3,00,000 in full settlement. The amount credited to the Capital Reduction Account is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) ₹2,00,000
Explanation
The debenture holders give up 20,00,000 and receive 15,00,000 + 3,00,000 = 18,00,000. Their sacrifice of 20,00,000 - 18,00,000 = ₹2,00,000 is credited to the Capital Reduction Account.
More Internal Reconstruction MCQs
- Q7Case: 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…
- Q8Which of the following best distinguishes internal reconstruction from external reconstruction?
- Q1Under the Companies Act, 2013, a reduction of share capital by a company limited by shares (for example, by cancelling paid-up capital…
- Q2Case: Under a scheme of internal reconstruction, the 5,00,000 fully paid equity shares of ₹10 each of Harit Ltd are reduced to ₹4 each…
- Q3Case: The Capital Reduction Account of Ishan Ltd shows a credit of ₹30,00,000 under an approved scheme. It is used to write off the debit…