Buy back of Shares - Ismail Classes - Ismail Sir

1.Buy Back of Shares

  The term buy back means the buying back by a company of its shares. As per the provisions made under section 68, 69 & 70 of Companies Act-2013 a company may purchase its own shares out of

1.Its free reserve

2.Securities premium or

3.Fresh issue of any shares or others.

Part-I Partly paid up Equity shares

1. For Final Call due

   Equity share final call A/c Dr

       To Equity share capital A/c

2. For Final call money received

  Bank A/c Dr

        To Equity share final call A/c

Part-II Where shares are fully paid up

1. For Investment sold

  a. Sold at profit

  Bank A/c Dr

        To Investment A/c

        To profit & Loss A/c

  b. Sold at loss

  Bank A/c Dr

  Profit & Loss A/c Dr

         To Investment A/c

2. For Preference Shares

  a. Issued at par

    Bank A/c Dr

       To Pref share capital A/c

  b. Issue at premium

  Bank A/c Dr

         To Pref share capital A/c

         To Securities premium A/c

3. For Buy back due

  a. Due at par

    Equity share capital A/c Dr

         To Equity shareholder A/c

  b. Due at premium

  Equity share capital A/c Dr

  Premium on Buy back A/c Dr

         To Equity shareholder A/c

  c. Due at Discount 

  Equity share capital A/c Dr

        To Equity shareholder A/c

        To Capital Reserve A/c

4. For Payment made

  Equity shareholder A/c Dr

          To Bank A/c

5. For Written off

  Securities premium A/c Dr

       To Premium on Buy back A/c

6. For Transfer to CRR

  Divisible profit A/c Dr

  Securities Premium A/c Dr

    To Capital Redemption Res A/c

Part-III Issue of Bonus shares

1. For declaring Bonus shares

  CRR A/c Dr

  Non-DP A/c Dr

  Divisible Profit A/c Dr

         To Equity Shareholder A/c

2. For issuing Bonus shares

  Equity Shareholder A/c Dr

         To Equity share capital A/c 

Divisible profit /Free Reserve/ Revenue Reserve	Capital Reserve/Non-Divisible profit
1. General Reserve A/c	1. Sec premium
2. Profit & Loss A/c	2. Capital Reserve
3. Dividend equilisation Res	3.Investment Allow Reserve
4. Investment Fluctuation Res	4.Development Rebate Reserve
5. Sinking Fund, Insurance Fund, Workmen compensation fund.	5. Capital Redemption Reserve
	6. Share forfeiture A/c
	7. Profit prior to Incorporation
	8. Revaluation Reserve

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