CA Inter P1 · Chapter 12 · Question 2 of 8
Case: 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 fully paid. The amount credited to the Capital Reduction Account is:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) ₹30,00,000
Explanation
The entry is: Equity Share Capital (₹10) Dr 50,00,000; to Equity Share Capital (₹4) 20,00,000; to Capital Reduction Account 30,00,000. The reduction of ₹6 per share on 5,00,000 shares = ₹30,00,000.
More Internal Reconstruction MCQs
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- Q8Which of the following best distinguishes internal reconstruction from external reconstruction?