Internal Company Reconstruction-Capital Reduction By Refunding Surplus Capital To Shareholders (Part B)
August 3rd, 2007
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| Internal Company Reconstruction-Capital Reduction | |||||||||
| As described, basically there are three situations | |||||||||
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Accounting For Company Reconstruction- REFUND OF SURPLUS CAPITAL |
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In this case, it is merely a cash outflow where money are return to the shareholders.
Company A has 100,000 shares at $1 per share . It has successfully applied to relevant authorities and being given the sanction to reduce its $1 share to 50 cent per share so that one half can be refunded to the shareholders.
Accounting entries:-
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