1.

State the sources of capital reserve.

Answer»

Following are the sources of capital reserve :

  • Profit on sale of fixed assets and investments.
  • Profit on revaluation of fixed assets.
  • Premium received by the company on issue of shares or debentures.
  • Balance of share forfeiture account after reissue of shares forfeited by the company.
  • Profit prior to incorporation of the company.
  • Capital redemption reserve for redeeming preference shares.
  • Profit on redemption of debentures at discount.


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