Model: Redemption of preference shares—At premium and out of profits The balance sheet of Krishna Ltd. as on 31 March 2011 was as follows:
|
Liabilities |
Assets |
||
|
1,00,000 Equity Shares ofl 10 Each, Fully |
10,00,000 |
Sundry Assets |
15,00,000 |
|
Paid |
Bank Balance |
9,50,000 |
|
|
5,000 Redeemable Preference Shares of 100 Each, Fully Paid |
5,00,000 |
||
|
Profit & Loss A/c |
8,00,000 |
||
|
Creditors |
1,50,000 |
||
|
24,50,000 |
24,50,000 |
On the above date, the preference shares were redeemed at a premium of 10%.
You are required to:
- Pass journal entries
- Construct the amended balance sheet