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Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above?
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Emami limited wishes to redeem its preference shares amounting ₹10000 ...
< b="" /> Redemption of Preference Shares < />
- Emami Limited is redeeming its preference shares amounting to ₹10000 at a premium of 5%.
- This means the company will pay back the shareholders the face value of the preference shares along with a 5% premium.
< b="" /> Issuance of Equity Shares < />
- To raise funds for redeeming the preference shares, Emami Limited issues 5000 equity shares of ₹10 each at a premium of 5%.
- This means the company is selling each equity share for ₹10 plus an additional 5% premium.
< b="" /> Utilization of Profit and Loss Account < />
- The company has a balance of ₹100000 in the profit and loss account.
- This balance can be utilized for various purposes, such as paying dividends to shareholders, reinvesting in the business, or offsetting any losses.
< b="" /> Journal Entries < />
1. To account for the redemption of preference shares:
- Preference Shares A/c Dr ₹10000
To Bank A/c ₹10500
(Being preference shares redeemed at a premium of 5%)
2. To account for the issuance of equity shares:
- Bank A/c Dr ₹52500
Share Capital A/c Dr ₹50000
Securities Premium A/c Dr ₹2500
To Equity Share Capital A/c ₹50000
To Securities Premium Reserve A/c ₹2500
(Being 5000 equity shares issued at a premium of 5%)
3. To utilize the profit and loss account balance:
- Profit and Loss A/c Dr ₹100000
To General Reserves A/c ₹100000
(Being profit and loss account balance transferred to general reserves)
By following these journal entries, Emami Limited can successfully redeem its preference shares, issue new equity shares, and utilize its profit and loss account balance effectively.
- Emami Limited is redeeming its preference shares amounting to ₹10000 at a premium of 5%.
- This means the company will pay back the shareholders the face value of the preference shares along with a 5% premium.
< b="" /> Issuance of Equity Shares < />
- To raise funds for redeeming the preference shares, Emami Limited issues 5000 equity shares of ₹10 each at a premium of 5%.
- This means the company is selling each equity share for ₹10 plus an additional 5% premium.
< b="" /> Utilization of Profit and Loss Account < />
- The company has a balance of ₹100000 in the profit and loss account.
- This balance can be utilized for various purposes, such as paying dividends to shareholders, reinvesting in the business, or offsetting any losses.
< b="" /> Journal Entries < />
1. To account for the redemption of preference shares:
- Preference Shares A/c Dr ₹10000
To Bank A/c ₹10500
(Being preference shares redeemed at a premium of 5%)
2. To account for the issuance of equity shares:
- Bank A/c Dr ₹52500
Share Capital A/c Dr ₹50000
Securities Premium A/c Dr ₹2500
To Equity Share Capital A/c ₹50000
To Securities Premium Reserve A/c ₹2500
(Being 5000 equity shares issued at a premium of 5%)
3. To utilize the profit and loss account balance:
- Profit and Loss A/c Dr ₹100000
To General Reserves A/c ₹100000
(Being profit and loss account balance transferred to general reserves)
By following these journal entries, Emami Limited can successfully redeem its preference shares, issue new equity shares, and utilize its profit and loss account balance effectively.
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Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above?
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Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above?.
Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above?.
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Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above?, a detailed solution for Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above? has been provided alongside types of Emami limited wishes to redeem its preference shares amounting ₹10000 at a premium of 5% and for this purpose issues 5000 equity shares of ₹10 each at a premium of 5%. The company has also a balance of ₹100000 in profit and loss account journalise the above? theory, EduRev gives you an
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