Following is the Balance Sheet of XYZ & Co. as on March 31, 2024 : Liabilities ₹ in lakhs Assets ₹ in lakhs Equity share capital (Fully paid-up shares of ₹ 10 each) 4,800 Machinery 7,200 Securities Premium 700 Furnit

CS Executive · Corporate Accounting and Financial Management · PYQS · December 2025
Following is the Balance Sheet of XYZ & Co. as on March 31, 2024 : Liabilities ₹ in lakhs Assets ₹ in lakhs Equity share capital (Fully paid-up shares of ₹ 10 each) 4,800 Machinery 7,200 Securities Premium 700 Furniture 904 General Reserve 1,860 Investments 296 Profit and Loss Account 680 Stock 2,400 12% Debentures 3,000 Debtors 1,040 Sundry Creditors 1,500 Cash at Bank 1,480 Sundry Provisions 780 13,320 13,320 On April 1, 2024, the company announce buyback of 25% of equity share capital at ₹ 13/- per share. For the purpose: Investments were sold for ₹ 300 lakhs Issued 4,00,000 preference shares of ₹ 100 each at par. Entire amount is payable at application. The buyback was completed in due time. Show journal entries for above transactions.

Answer & Explanation:

Journal of XYZ & Co S. No. Particulars Debit (₹) Credit (₹) 1. Bank A/c Dr. To Investments A/c To Profit and Loss A/c (Being sale of investments for profit) 3,00,00,000 2,96,00,000 4,00,000 2. Bank A/c Dr. To Preference Share Capital A/c (Being issue of Preference Share Capital) 4,00,00,000 4,00,00,000 3. Equity Share Capital A/c Dr. Security Premium A/c Dr. To Equity Shareholders A/c (Being Buyback of Equity Shares) 12,00,00,000 3,60,00,000 15,60,00,000 4. Equity Shareholders A/c Dr. To Bank A/c (Being payment to Equity Shareholders) 15,60,00,000 15,60,00,000 5. General Reserve A/c Dr. To Capital Redemption Reserve A/c (Being transfer to capital redemption reserve) 8,00,00,000 8,00,00,000

Topics: Corporate Accounting

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