Premium on redemption of preference shares
(a) For the companies whose financial statements comply with the accounting standards as prescribed under section 133, the premium payable on redemption shall be provided out of the profits of the company, before the shares are redeemed.
(b) For redemption of any preference shares issued on or before the commencement of 2013 Act, the premium payable on redemption shall be provided out of the profits of the company, or out of the company’s securities premium account, before such shares are redeemed.
(c) For the companies whose financial statements need not comply with the accounting standards as prescribed under section 133, the premium payable on redemption shall be provided out of the profits of the company, or out of the company’s securities premium account, before such shares are redeemed.
Case 1: Redemption of preference shares out of the profits of the company which would otherwise be available
for dividend.
If the redeemable preference shares are redeemed out of the profits of the company which would otherwise be available for dividend, the “Capital Redemption Reserve Account” has to be created which will represent the redeemable preference shares in the balance sheet after the redemption. This capital redemption reserve should be equal to the amount of Preference Shares to be redeemed. The profits available for dividend have to be transferred to Capital Redemption Reserve Account.
Journal Entries
1. Transfer profits available for dividend to Capital Redemption Reserve Account:
General Reserve Account Dr. as the case may be
Profit and Loss Appropriation A/c Dr.
Dividend Equalization Account Dr
To Capital Redemption Reserve A/c
with the nominal value of the shares to be redeemed
2. If current assets are realized to provide cash for redemption of preference shares:
Bank Dr.
To Respective Assets Account with the realized value of assets
3. On transfer of redeemable preference share capital to be redeemed to Preference Shareholders
Account:
Redeemable Preference Share Capital A/c Dr. with the nominal value of the shares to be
To Preference Shareholders A/c redeemed
4. If preference shares are redeemed at premium:
Redeemable Preference Share Capital A/c Dr.
Premium on Redemption of Preference Shares A/c Dr. with the amount of premium payable
To Preference Shareholders A/c
5. For providing premium on redemption of preference shares:
Securities Premium Account Dr. with the amount of premium paid on redemption of preference shares
or Profit and Loss Appropriation A/c Dr.
To Premium on Redemption of Preference Shares Account
6. On redemption of preference shares:
Preference Shareholders Account Dr. with the amount paid
To Bank
Case 2: If the redeemable preference shares are redeemed out of the proceeds of a fresh issue of shares made for the purpose of redemption:
If the redeemable preference shares are redeemed out of the proceeds of fresh issue of shares, the new Share Capital Account raised by fresh issue will take the place of the Redeemable Preference Share Capital Account after the redemption. Thus, in such a case, new Share Capital Account (Equity or Preference) must be equal to the redeemable preference shares redeemed.
First of all, entries for fresh issue of shares will be passed. Then entries for redemption passed as given in previous case.
Case 3: If the redeemable preference shares are redeemed partly out of the profits of the company which would otherwise be available for dividend and partly out of the proceeds of a fresh issue of shares made for the purpose of redemption:
If the redeemable preference shares are redeemed partly out of the profits of the company which would otherwise be available for dividend and partly out of the proceeds of a fresh issue of shares equity or preference, the Capital Redemption Reserve Account and the new Share Capital Account taken together will replace the Redeemable Preference Share Capital redeemed. Thus in such a case, Redeemable Preference Share Capital redeemed = Capital Redemption Reserve Account + New Share Capital Account (Equity or Preference).
Here, all the entries shown under (i) and (ii) have to be passed. But there are certain common entries which can be combined together.
Illustration 1
(When preference shares are redeemed out of the profits of the company).
Vanities Ltd. had an issue 1,000, 12% Redeemable Preference Shares of ` 100 each, repayable at a premium of 10%. These shares are to be redeemed out of the accumulated reserves, which are more than the necessary sum required for redemption. Show the necessary entries in the books of the company, assuming that the premium on redemption of shares has to be written off against the company’s Securities Premium Reserves.
| General Reserve Account Dr.
To Capital Redemption Reserve A/c
(Transfer of reserves to Capital Redemption Reserve Account on Redemption of Redeemable Preference Shares)________ |
1,00,000 |
1,00,000 |
| 12% Redeemable Preference Share Capital A/c Dr.
Premium on Redemption of Preference Shares A/c Dr. To 12% Preference Shareholders A/c (Amount payable to 12% preference shareholders on redemption of 12% preference shares at a premium of 10%) |
1,00,000
10,000 |
1,10,000 |
| Securities Premium Reserves Dr.
To Premium on Redemption of Preference Share A/c
(Application of Securities Premium Account to write off premium on Redemption of Preference Shares)______ |
10,000 |
10,000 |
| 12% Preference Shareholders A/c Dr
To Bank (Amount due to 12% preference shareholders on redemption paid) |
. 1,10,000
|
1,10,000 |
Note: Capital Redemption Reserve Account replaces the 12% Redeemable Preference Shares Capital Account
and the capital structure of the company remains unchanged.
Illustration 2
(When redeemable preference shares are redeemed out of the proceeds of fresh issue made for the purpose).
Sure and Fast Ltd. has part of its share capital consists of, 12% Redeemable Preference Shares of ` 100 each, repayable at a premium of 5%. The shares have now become ready for redemption. It is decided that the whole amount will be redeemed out of a fresh issue of 20,000 equity shares of ` 10 each at ` 11 each. The whole amount is received in cash and the 12% preference shares are redeemed.
Show the necessary journal entries in the books of the company.
Solution:
Journal Entries
| Bank Dr.
To Equity Share Application and Allotment A/c
(Application money on 20,000 equity shares @ ` 11 per share including a premium of ` 1 per share)____ |
2,20,000 | |
| 2,20,000 | ||
| Equity Share Application and Allotment A/c Dr.
To Equity Share Capital A/c 2,00,000 To Securities Premium Reserves
(Allotment of 20,000 equity shares ` 10 each issued at a premium of 1 per share as per Board’s Resolution dated….)________ |
2,20,000 | |
| 2,00,000 | ||
| 20,000 | ||
| 12% Redeemable Preference Share Capital A/c Dr.
Premium on Redemption of Preference Share A/c Dr. To 12% Preference Shareholders A/c
(Amount due to 12% preference shareholders on redemption of 8% preference shares at a premium of 5%) |
2,00,000’
10,000
|
|
| 2,10,000
|
||
| Securities Premium Reserves Dr.
To Premium on Redemption of Preference Shares A/c
(Application of Securities Premium Account to write off Premium on Redemption of Preference Shares)____ |
10,000 |
10,000
|
| 12% Preference Shareholders A/c Dr.
To Bank (Amount due to 12% preference shareholders on redemption paid) |
2,10,000 |
2,10,000 |
Note: Equity Share Capital Account replaces the 12% Redeemable Preference Share Capital Account and the
capital structure of the company remains unchanged).
| I. EQUITY AND LIABILITIES | Rs. | |
| 1. Shareholders’ funds | ||
| (a) Share Capital 1 | 5,48,000 | |
| (b) Reserve & Surplus 2 | 1,65,000 | |
| 2. Current Liabilities
Trade payable |
27,000 |
|
|
TOTAL |
7,40,000 |
|
| II. ASSETS | ||
| 1. Non-current assets
(a) Fixed Assets (b) Non Current Investments
2. Current Assets Cash and cash equivalent
TOTAL |
6,00,000 50,000 |
6,50,000
90,000
7,40,000 |
Notes
| 1. Share capital | ||
| Authorized Share Capital | …………. | |
| Issued, Subscribed Called Up And Paid-Up Share Capital
2500 Preference shares of ` 100 each fully paid-up |
2,50,000 | |
| Less: Calls in arrears 2000 | 2000 | |
| 2,48,000 | ||
| 30,000 equity shares of ` 10 each fully paid up | 3,00,000 | |
| 2. Reserve & Surplus | ||
| Securities Premium | 15,000 | |
| Surplus Account | 1,50,000 | 1,65,000 |
On 30th June, 2014, the Board of directors decided to redeem the preference shares at a premium of 10% and to sell the investments at its market price of ` 40,000. They also decided to issue sufficient number of equity shares of ` 10 each at a premium of ` 1 per share, required after utilising the Surplus Account leaving a balance of ` 50,000. Premium on redemption is required to be set off against securities premium reserves.
Repayments on redemption were made in full except to one shareholder holding 50 shares only due to his leaving India for good.
You are required to show the journal entries and the balance sheet of the company after redemption. Assumption made should be shown in the working.
Solution:
Journal entries in the books of Oscar Ltd.
| Particulars | Dr. (`Rs.) | Cr. (`Rs.) | |||
|
Bank Dr. |
|
40,000 |
|||
|
Surplus A/c Dr. |
|
10,000 |
|||
|
To Investments
(Being the sale of investments at a loss 10,000)_________________________ |
|
50,000 |
|||
|
Bank Dr. |
|
1,65,000 |
|||
|
To Share Capital A/c |
|
1,50,000 |
|||
|
To Securities Premium Reserves
(Being the issue of required number of equity shares at a premium of 10%) |
|
15,000 |
|||
|
Preference Share Capital A/c Dr. |
|
2,40,000 |
|||
|
Premium on Redemption A/c Dr. |
|
24,000 |
|||
|
To Preference Shareholders A/c
(Being the transfer of the amount due to preference shareholders on redemption) |
|
2,64,000 | |||
|
Securities Premium Reserves Dr. |
|
24,000 |
|||
|
To Premium on Redemption A/c (Being the transfer of securities premium account to write off premium on redemption account)_______________ |
|
24,000 |
|||
|
Surplus A/c Dr. |
|
90,000
|
|
||
|
To Capital Redemption Reserve A/c
(Being the transfer of profit used for redemption of preference shares transferred to capital redemption reserve account)____
|
|
90,000
|
|||
|
Preference Shareholders A/c Dr. |
|
2,58,500 |
|||
|
To Bank
(Being the payment to preference shareholders except for 50 shares) |
2,58,500 |
||||
Oscar India Ltd
BALANCE SHEET (After redemption)
AS AT 1st July 2014
| I. EQUITY AND LIABILITIES | Rs. | |
| 1. Shareholder’s Fund 1 | 4,58,000 | |
| (a) Share Capital 2 | 1,46,000 | |
| (b) Reserve & Surplus | ||
| 2. Current Liabilities | ||
| Trade payable | 27,500 | |
| Other current liability 3 | 5,000 | |
| TOTAL | 6,36,500 | |
| II. ASSETS | ||
| 1. Non-current assets | ||
| (a) Fixed Assets | 6,00,000 | |
| 2. Current Assets | ||
| Cash and cash equivalents | 36,500 | |
| TOTAL | 6,36,500 |
Notes
|
1. Share capital |
||
| Authorized Share Capital | ||
| Issued, Subscribed Called Up And Paid-Up Share Capital | ||
| Issued, Subscribed Called Up And Paid-Up Share Capital | 10,000 | |
| Less: Calls in arrears | 2000 | 8,000 |
| 45,000 equity shares of ` 10 each fully paid up | 4,50,000 | |
| 4,58,000 | ||
|
2. Reserve and Surplus |
||
| Capital Redemption reserve | 90,000 | |
| Securities Premium Reserves | 6,000 | |
| Surplus Account | 50,000 | 1,46,000 |
|
3. Other current liability |
||
| Amount due to preference shareholders | 5,000 |
Bank Account
| Dr. Cr. | |||
| Particulars | Rs. | Particulars | Rs. |
| To Balance b/d | 90,000 | By Preference Shareholders A/c | 2,58,500 |
| To Investment | 40,000 | By Balance b/d | 36,500 |
| To Share Capital A/c | 1,50,000 | ||
| To Securities Premium Reserves | 15,000 | _______ | |
| 2,95,000 | 2,95,000 | ||
3. Premium on redemption of preference shares has been met out of securities premium account.
Illustration 4
(When Redeemable Preference Shares are redeemed partly out of the profits of the company and partly out of the proceeds of fresh issue of shares made for the purpose).
Producers Ltd
BALANCE SHEET
AS AT 31st March, 2014
|
I. EQUITY AND LIABILITIES |
Rs. | Rs. |
| 1. Shareholders’ funds | ||
| (a) Share Capital 1 | 3,50,000 | |
| (b) Reserve & Surplus 2 | 64,000 | |
| 2. Current Liabilities | ||
| Trade Payable | 22,500 | |
| Short term provisions 3 | 19,500 | 42,000 |
| TOTAL | 4,56,000 | |
|
II. ASSETS |
||
| 1. Non-current assets | ||
|
(a) Fixed Assets
|
||
| I. Tangible fixed assets 4 | 2,10,000 | |
| (b) Non-Current Investments | 60,000 | |
| 2. Current Assets | ||
| Inventories | 1,30,500 | |
| Trade receivable | 49,550 | |
| Cash and cash equivalents | 4,950 | |
| Other current assets 5 | 1,000 | 1,86,000 |
| TOTAL | 4,56,000 |
Notes
1. Share capital
Authorized Share Capital
40,000 equity shares of ` 10 each fully paid up 4,00,000
1000, 8% preference shares of ` 100 each 1,00,000
5,00,000
Issued, Subscribed Called Up And Paid-Up Share Capital
1000 8% Preference shares of ` 100 each fully paid-up 1,00,000
25,000 equity shares of ` 10 each fully paid up 2,50,000
3,50,000
2. Reserve and Surplus
Securities Premium Reserves 9,000
Surplus Account 55,000
64,000
3. Short term provisions
Provisions for Taxation 19,500
4. Tangible fixed assets
Plant and Machinery 1,90,000
Furniture and Fixtures 20,000
2,10,000
5. Other current assets
Prepaid expenses 1000
In order to redeem its preference shares, the company issued 5,000 equity shares of ` 10 each at a Premium of 10% and sold its investment of ` 70,800. Preference shares were redeemed at a premium of 10%.
Show the necessary journal entries in the books of the company and prepare the balance sheet of the company immediately after redemption of preference shares.
Solution:
Journal Entries
| Particulars | Dr.(Rs) | Cr.(Rs) |
| Bank Dr. | 55,000 | |
|
To Equity Share Application and Allotment Account
(Application money received on 5,000 equity shares of ` 10 at a premium of 10%). |
55,000 | |
| Equity Share Application and Allotment A/c Dr. | 55,000 | |
| To Equity Share Capital A/c 50,000
To Securities Premium Reserves
(Allotment of 5000 equity shares of ` 10 each issued at a premium of 10% as per Board’s resolution dated….)_______ |
50,000
5,000 |
|
| Surplus A/c Dr. | 50,000 | |
| To Capital Redemption Reserve A/c
(Transfer of the balance amount of the nominal value preference shares to be redeemed not covered by fresh issue, i.e., ` 1,00,000 – 50,000 on redemption to Capital Redemption Reserve A/c)___ |
50,000 | |
| Bank Dr. | 70,800 | |
| To Investments A/c
To Surplus A/c (Sale on Investments at a profit and transfer of profit on sale to Profit and Loss A/c) |
60,000
10,800 |
|
| 8% Redeemable Preference Share Capital A/c Dr.
Premium on Redemption of Preference Shares A/c Dr. |
1,00,000
10,000
|
|
| To 8% Preference Shareholders A/c
(Amount due to 8% preference shareholders on redemption)– |
1,10,000
|
|
| Securities Premium Reserves Dr.
To Premium on Redemption of Preference Shares A/c
(Application of securities premium to write off premium on redemption of preference shares)
|
10,000
|
10,000 |
| 8% Preference Shareholders A/c Dr.
To Bank (Amount due to 8% Preference Shareholders on redemption paid) |
1,10,000 |
1,10,000 |
Producers Ltd
BALANCE SHEET (After redemption of preference shares)
AS AT 31st March, 2014
|
I. EQUITY AND LIABILITIES |
Rs. | Rs. |
| 1. Shareholders’ funds | ||
| (a) Share Capital 1 | 3,00,000 | |
| (b) Reserve & Surplus 2 | 69,800 | |
| 2. Current Liabilities | ||
| Trade Payable | 22,500 | |
| Short term provisions 3 | 19,500 | 42,000 |
| TOTAL | 4,11,800 | |
|
II. ASSETS |
||
| 1. Non-current assets | ||
| (a) Fixed Assets
|
||
| I. Tangible fixed assets 4 | 2,10,000 | |
| 2. Current Assets | ||
| Inventories | 1,30,500 | |
| Trade receivable | 49,550 | |
| Cash and cash equivalents | 20 750 | |
| Other current assets 5 | 1,000 | 2,01,800 |
| TOTAL | 4,11,800 |
Notes
1. Share capital
Authorized Share Capital
40,000 equity shares of ` 10 each fully paid up 4,00,000
1000, 8% preference shares of ` 100 each 1,00,000
5,00,000
Issued, Subscribed Called Up And Paid-Up Share Capital
30,000 equity shares of ` 10 each fully paid up 3,00,000
2. Reserve and Surplus
Securities Premium Reserves 4,000
Surplus Account 15,800
Capital redemption reserve 50,000 69,800
3. Short term provisions
Provisions for Taxation 19,500
4. Tangible fixed assets
Plant and Machinery 1,90,000
Furniture and Fixtures 20,000
2,10,000
5. Other current assets
Prepaid expenses 1,000
Working Notes:
Bank A/c
| Particulars | Rs. | Particulars | Rs. |
| To Balance b/d | 4,950 | By 8% Preference Shareholders A/c | 1,10,000 |
| To Equity Share Application and Allotment A/c | 55,000 | By Balance b/d | 20,750 |
| To Investment A/c | 60,000 | ||
| To Surplus A/c | 10,800 | _______ | |
| 1,30,750 | 1,30,750 |
(ii) Securities Premium A/c
(i) Dr. Cr.
| Particulars | Rs. | Particulars | Rs. |
| To Premium on Redemption of Preference Shares Account | 10,000 | By Preference Shareholders A/c | 9,000 |
|
To Balance c/d |
4000 |
By Equity Share Application and Allotment A/c | 5,000 |
| 14,000 | 14,000 |
(iii) Profit and Loss A/c
| Dr. Cr. | |||
| Particulars | Rs. | Particulars | Rs. |
| To Capital Redemption Reserve A/c | 50,000 | By Balance b/d | 55,000 |
| To Balance c/d | 15,800 | By Bank (Profit on sale of investments) | 10,800 |
| 65,800 | 65,800 | ||
Note: Equity Share Capital issued at ` 50,000 and Capital Redemption Reserve Account ` 50,000 jointly replace
8% Redeemable Preference Share Capital ` 1,00,000. Hence the capital structure of the company remains
unchanged.
Illustration 5
Kalpataru Construction Ltd
BALANCE SHEET
AS AT 31st March, 2014
|
I. EQUITY AND LIABILITIES |
Rs. | Rs. |
| 1. Shareholders’ funds | ||
| (a) Share Capital 1 | 17,22,500 | |
| (b) Reserve & Surplus 2 | 6,50,000 | |
| 2. Current Liabilities | ||
| Other current liability Calls in advance 3
(final call on equity shares) |
||
| 2,500 | ||
| TOTAL | 23,75,000 | |
|
II. ASSETS |
||
| 1. Non-current assets | ||
|
(a) Fixed Assets
|
||
| Fixed Assets | 12,25,000 | |
| (b) Non Current Investment | 2,00,000 | |
| (2) Current Assets | 9,50,000 | |
| Cash and cash equivalents | ||
| TOTAL | 23,75,000 |
Notes :
1. Share capital
Authorized Share Capital
Issued, Subscribed Called Up And Paid-Up Share Capital
1,00,000 equity shares of ` 10 each;
7.50 per share called-up 7,50,000
Less: Calls unpaid _____ 7,500 7,42,500
20,000 12% preference shares of ` 50 each fully called-up 10,00,000
Less: Calls unpaid (` 10 per share) 20,000 9,80,000
17,22,500
2. Reserve & Surplus
Securities premium 50,000
General Reserve 6,00,000
6,50,000
3. Other current liability
Calls in advance (final call on equity shares) 2,500
On 1st April, 2014 the Board of directors decide that:
(a) The fully paid preference shares are to be redeemed at a premium of 5% in May, 2014 and for that purpose 50,000 equity shares of ` 10 each are to be issued at par in the month of April, 2014.
(b) The 1,000 equity shares owned by A an existing shareholder, who has failed to pay the allotment money and the 1st call money @ ` 2.50 each share are to be forfeited in the month of June, 2014.
(c) The final call of ` 2.50 per share is to be made in the month of July, 2014.
All the above are duly complied with according to the time schedule. The amount due on the issue of fresh equity
shares and on final call are also duly received except from B who had failed to pay the 1st call money for his 1,000 shares holding, has again failed to pay the final call also. These shares of B have been forfeited, in the month of August, 2014. On the total shares forfeited, 1,500 shares are sold to X in September, 2014 credited as fully paid for ` 9 per share, the whole of A’s shares being included. Show the necessary journal entries and prepare the balance sheet of the company as on 30th September,2014.
Journal Entries in the books of Kalpataru Construction Ltd.
| Date | Particulars | Dr. (Z) | Cr (( ) |
| 2014 | |||
| April 1 | Bank Dr. | 5,00,000 | |
| To Equity Share Capital A/c | 5,00,000 | ||
| (Issue of equity shares) | |||
| May | Securities Premium A/c Dr. | 45,000 | |
| To Premium on Redemption of | 45,000 | ||
| Preference Shares | |||
| (Premium on redemption shares transferred) | |||
| May | General Reserve A/c Dr. | 4,00,000 | |
| To Capital Redemption Reserve A/c | 4,00,000 | ||
| (Transfer of the required amount from general reserve account) | |||
| May | Preference Share Capital A/c Dr. | 9,00,000 | |
| Premium on Redemption of Dr. | 45,000 | ||
| Preference Share A/c | |||
| To Preference Shareholders A/c | 9,45,000 | ||
| (The amount payable) | |||
| May | Preference Shareholders A/c Dr. | 9,45,000 | |
| To Bank | 9,45,000 | ||
| (Amount paid) |
| June | Equity Share Capital A/c Dr. | 7,500 | |
| To Shares Forfeited A/c | 2,500 | ||
| To Calls in Arrear A/c | 5,000 | ||
| (A’s Shares forfeited) | |||
| July | Equity Share Final Calls A/c Dr. | 2,47,500 | |
| To Equity Share Capital A/c | 2,47,500 | ||
| (Amount due on final call i.e. 99,000 shares x 2.50) | |||
| July | Bank Dr. | 2,42,500 | |
| Calls in Arrear A/c Dr. | 2,500 | ||
| Calls in Advance A/c Dr. | 2,500 | ||
| To Equity Share Final Call A/c | 2,47,500 | ||
| (Amount received) | |||
| Aug. | Equity Share Capital A/c Dr. | 10,000 | |
| To Shares Forfeited A/c | 5,000 | ||
| To Calls in Arrear A/c | 5,000 | ||
| (B’s shares forfeited) | |||
| Sept. | Bank Dr. | 13,500 | |
| Share Forfeited A/c Dr. | 1,500 | ||
| To Equity Share Capital A/c | 15,000 | ||
| (1,500 shares re-issued @ 9) | |||
| Sept. | Share Forfeited A/c Dr. | 3,500 | |
| To Capital Reserve A/c | 3,500 | ||
| (Profit on reissue of forfeited shares) |
Shares Forfeited Account
| Dr. Cr. | |||
| Particulars | Rs. | Particulars | Rs. |
| To Equity Share Capital A/c | 1,500 | By Equity Share Capital A/c (A’s shares)
|
2,500 |
| To Capital Reserve A/c
(Balancing figure) |
3,500 | By Equity ShaCapitalA/c(B’s shares) | 5,000 |
| To Balance c/d (500 Shares @ Z 5)
|
2,500
|
____________ | |
| 7,500 | 7,500 | ||
Bank Account
| Dr. Cr. | |||
| Particulars | Rs. | Particulars | Rs. |
| To Balance b/d | 9,50,000 | By Pref. Shareholders | 9,45,000 |
| To Equity Share Capital A/c | 5,00,000 | By Balance c/d | 7,61,000 |
| To Equity Share Final Call A/c | 2,42,500 | ||
| To Equity Share Capital A/c | 13,500 | ________ | |
| 17,06,000 | 17,06,000 | ||
Kalpataru Construction Ltd
BALANCE SHEET
AS ON 30 September, 2014
| I. EQUITY AND LIABILITIES | Rs |
| 1. Shareholders’ Fund | |
| (a) Share Capital 1 | 15,77,500 |
| (b) Reserve & Surplus 2 | 6,08,500 |
| TOTAL | 21,86,000 |
| II. ASSETS | |
| (1) Non-current assets | |
| (a) Fixed Assets | |
| Fixed Assets | 12,25,000 |
| (b) Non Current Investment | 2,00,000 |
| (2) Current Assets | |
| Cash and cash equivalents | 7,61,000 |
| TOTAL | 21,86,000 |
1. Share capital
Authorized Share Capital ………….
Issued, Subscribed Called Up And Paid-Up Share Capital
1, 49,500 Equity Shares @ ` 10 14,95,000
2,000 Preference shares of ` 50 each, fully called up 1,00,000
Less Calls in arrears 20,000 80,000
Equity Shares Forfeited Account 2,500
15,77,500
2. Reserve & Surplus
Capital Reserve 3,500
Capital Redemption Reserve 4,00,000
Securities Premium Account 5,000
General Reserve 2,00,000 6,08,500