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BUYBACK-EASYPEASYTOPIC

BEHOLD MY GREATNESS. MY KNOWLEDGE.

BUYBACK LIKE NEVER BEFORE. CHECK IT OUT NOW!!!


The Beginning.


Only a handful of journal entries can bring you marks like no other topic- 5 marks guaranteed. only have to memorise a sure formula for the amount of maximum buyback you can do, and you can grab all the marks this topic has to offer. 

The first journal entry that you should learn is:-

1. equity share capital ACC dr.
   premium on buyback ACC dr.
           to equity shares buyback ac.

ACCRUAL AT ITS BEST. ENTRY AT DUE. AM I RIGHT? GO FOR IT. YOU GOT THIS. 

2. Free reserves ACC. dr.
   Security premium ACC. dr.
           to premium on buyback account.

YOU HAVE GOT TO WRITE OFF THOSE PREMIUMS WITH SOMETHING. LAWS SAYS, "USE FREE RESERVES, MR.ACCOUNTANT"

3. equity shares buyback ACC. dr. 
    to bank ACC. 

TIME TO PAYBACK, GOT TO PAYBACK. PAYBACK. YEAH, PACKBACK- JAMES BROWN.

4. Free reserves ACC. dr. 
   Security premium ACC. dr. 
          to capital redemption reserve ACC. 

CREATE THE CRR, ONLY THE NOMINAL AMOUNT. YOU CAN DO IT. ALL THE BEST. 



NOW KIDS, TIME TO LEARN, THE SECRET TO KNOW "HOW MUCH DO WE WANNA REALLY BUYBACK", LAW UNCLE, SAY SOMETHING!!!"
DON'T WORRY, KIDS, I AM HERE TO ANSWER ALL YOUR QUESTIONS. FOLLOW ME---


1. THE FIRST STEP TO FIND OUT THE PERMISSIBLE LIMIT OF BUYBACK IS- 

A. SHARE OUTSTANDING TEST. - 25% OF NO. OF SHARES. 
B. RESOURCE TEST- 25% OF TOTAL PUSC+FREE RESERVES.

*FREE RESERVES INCLUDE THE SECURITY PREMIUM+GENERAL   RESERVES+ P&L+ REVALUATION RESERVE)

2. DEBT EQUITY RATIO TEST- 
   THE RATIO IS 2:1. IT MUST BE MAINTAINED IN ALL CIRCUMSTANCES. REMEMBER THAT. 

NOW THE FORMULA IS QUITE TIME-TAKING, SO I AM LEAVING THIS AT THIS NOW. 
GOODBYE. 

GO RECITE THE TABLE OF 9. 

YOU DID IT? DID YOU REALLY RECITE THE TABLE OF 9. 
I RESPECT THAT. 

NOW I MUST TELL YOU THAT THE FORMULA IS QUITE EASY AND LOGICAL. 

BUT BEFORE YOU KNOW THAT. YOU MUST KNOW THAT THERE WAS THIS MILES DAVIS, AND HE WAS THE COOL MUSICIAN. 
NOW LET'S GET FUNKY, AND REVEAL ALL THOSE DISGUSTING FORMULAS RIGHT ON YOUR FACE. 

IT'S QUITE SIMPLE, YOU FIRST FIND OUT HOW MUCH YOU CAN BUYBACK BY APPLYING THAT RATIO. 

THEN, FIGURE OUT BUY USING THE BUYBACK AMOUNT PER SHARE, THE CRR AMOUNT YOU MUST RESERVE. 

AND THERE YOU GO, YOU HAVE GOT THE AMOUNT READY FOR BUYBACK USE. 


LET'S SAY- 20L(TOTAL EQUITY)- 14L(MIN YOU GOT TO KEEP)- X(CRR) = Y(BUYBACK AMOUNT)

THEN AFTER FINDING X, PUT IT IN THIS FORMULA-

X= Y/BB AMOUNT. 

THERE YOU GO. ENJOY SOLVING BUYBACK. AND REMEMBER THE GENIUS WHO TOLD YOU ALL THIS. 

THE FOUR TIME CA INTER FAILURE, NONE OTHER THAN, THE ALL TIME MULTI TALENTED, MUSICIAN, PAINTER, WRITER, POSSIBLE ACCOUNTANT, LAW ENTHUSIAST, TAX HATER, AUDIT LIKER, LOW SCORER, HIGH MORALE CARRIER, THE ALL TIME ARTIST OF THIS WORLD, 
AMAN JHA. YEAH, BABY, REMEMBER THAT. 

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