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Question
'Sangam Woolens Ltd.', Ludhiana, are the manufacturers and exporters of woollen garments. The company decided to distribute free of cost woollen garments to 10 villages of Lahaul and Spiti District of Himachal Pradesh. The company also decided to employ 50 young persons from this village in its newly established factory. The company issued 40,000 equity shares of Rs 10 each and 1,000 9% debentures of Rs 100 each to the vendors for the purchase of machinery of Rs 5,00,000. Pass necessary Journal Entries. Also, identify anyone value that the company wants to communicate to the society.
Solution
| Journal In the books of Sangam Woolens Ltd |
||||
| Date | Particulars | L.F. |
Dr. Rs |
Cr. Rs |
|
Machinery A/c Dr. To Vendor (Being machinery purchased) |
5,00,000
|
5,00,000
|
||
|
Vendor Dr. To Equity Share Capital To 9% Debentures A/c |
5,00,000
|
4,00,000 1,00,000
|
||
Values involved in the above scenario
1) Creation for employment opportunities
2) Working for social welfare
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