Model: Minimum fresh issue of shares at premium The balance sheet of Manu as on 31 March 2011 is as follows:
|
Liabilities |
Assets |
||
|
4,000 Equity Shares of Z 100 Each Fully |
4,00,000 |
Fixed Assets |
4,50,000 |
|
Paid up |
Investments |
30,000 |
|
|
2,000 — 8% Redeemable Preference |
2,00,000 |
Current Assets |
2,20,000 |
|
Shares of Z100 Each Fully Paid |
Miscellaneous Expenditure (not yet |
80,000 |
|
|
Securities Premium |
9,700 |
Written off) |
|
|
Profit & Loss A/c |
1,20,000 |
||
|
Current Liabilities |
50,300 |
||
|
7,80,000 |
7,80,000 |
On the above date, it was decided to redeem the preference shares at a premium of 10%. The directors has decided that only the minimum number of fresh equity shares of Rs.100 each at a premium of 5% be issued to provide for redemption of such preference shares as could not otherwise be redeemed. You are required to give the necessary journal entries and prepare the balance sheet soon after redemption.