Super Star Ltd. Balance Sheet as at March 31, 2024 Particulars Amount (₹) Amount (₹) I. Equities and Liabilities 1. Shareholder's funds Share Capital 50,00,000 Divided in five lakh shares of 10/- each Reserves & Surp

CS Executive · Corporate Accounting and Financial Management · PYQS · December 2024
Super Star Ltd. Balance Sheet as at March 31, 2024 Particulars Amount (₹) Amount (₹) I. Equities and Liabilities 1. Shareholder's funds Share Capital 50,00,000 Divided in five lakh shares of 10/- each Reserves & Surplus 35,25,000 85,25,000 2. Long Term Borrowings 20,00,000 3. Current Liability: Trade Payables 3,00,000 1,08,25,000 II. Assets 1. Fixed Assets 66,50,000 2. Non-Current Investment 7,50,000 3. Current Assets Trade Receivables 5,00,000 Inventories 5,00,000 Cash and Cash Equivalents 24,25,000 34,25,000 1,08,25,000 Reserves and Surplus include securities premium of ₹10,00,000/- On April 1, 2024 - shareholders of the company authorized buyback as under : 10% of equity shares would be bought back at ₹17/- per share. 12% debentures to be issued for ₹1,00,000/- to finance the buyback and balance from general reserve to be utilized for this purpose. Premium on buyback to be met from securities premium account. Investments would be sold for ₹11,75,000/-. Pass necessary journal entries to record above transactions.

Answer & Explanation:

Super Star Ltd. Journal Entries Particulars Amount ₹ Amount ₹ Share Capital A/c Dr. 5,00,000 Share premium A/c Dr. 3,50,000 To Shareholders A/c 8,50,000 (Being 50,000 equity shares bought back @ ₹17 per share and premium on buyback adjusted against existing securities premium account) Bank A/c Dr. 1,00,000 To 12% Debentures A/c 1,00,000 (Being issue of debentures for partial financing of buyback) Bank A/c Dr. 11,75,000 To Investments A/c 7,50,000 To Profit & Loss A/c 4,25,000 (Being sale of investments and profit transferred to Profit & Loss A/c) General Reserve A/c Dr. 4,00,000 To Capital Redemption Reserve A/c 4,00,000 (Being transfer of general reserve utilized to the extent of nominal values of shares bought back) Shareholders A/c Dr. 8,50,000 To Bank A/c 8,50,000

Topics: Corporate Accounting

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