The following is the balance sheet of Jyothi Ltd. as at 31 March 2010:
|
Liabilities |
Assets |
||
|
Share Capital: |
|
Fixed Assets: |
|
|
Authorized |
|
Gross Block |
8,00,000 |
|
20,0009% |
2,00,000 |
Less: |
|
|
Redeemable |
|
Depreciation |
2,00,000 |
|
Pref. Shares of |
|
|
|
|
Rs.10 Each |
|
|
6,00,000 |
|
1,80,000 Equity |
18,00,000 |
|
|
|
Shares ofRs. 10 |
|
|
|
|
Each |
|
|
|
|
|
20,00,000 |
|
2,00,000 |
|
Issued, |
|
Investments Current Assets, Loans & |
|
|
20,0009% |
|
Advances: |
|
|
Redeemable |
|
Inventory |
2,50,000 |
|
Pref. Shares of |
|
Debtors |
2,50,000 |
|
Z10 Each |
|
Cash & Bank |
3,00,000 |
|
1,00,000 Equity |
|
Balances |
|
|
Shares of 10 |
|
|
8,00,000 |
|
Each |
|
|
|
|
(A) |
12,00,000 |
|
|
|
Reserve & |
2,40,000 |
Miscellaneous |
40,000 |
|
Surplus: |
|
Expenditure (to |
|
|
General Reserve |
1,40,000 |
the Extent Not |
|
|
Securities |
|
Written off) |
|
|
|
37,000 |
|
|
|
Premium |
|
|
|
|
Profit & Loss A/c |
|
|
|
|
(B) |
4,17,000 |
|
|
|
Current Liabilities |
23,000 |
|
|
|
& Provisions: (C) |
|
|
|
|
Total (A+ B+ C) |
16,40,000 |
Total |
16,40,000 |
For the year ended 31 March 2011, the Company made a net profit of Rs.30,000 after providing Rs.40,000 depreciation and writing off the miscellaneous expenditure amounting to Rs.40,000.
The following additional information is available with regard to Company’s operation:
- (The preference dividend for the year ended 31 March 2011 was paid before 31 March 2011.
- Except cash and bank balances, other current assets and current liabilities as on 31 March 2011was the same as on 31 March 2010.
- The Company redeemed the preference shares at a premium of 10%.
- The Company issued bonus shares in the ratio of one share for every five equity shares held as on 31 March 2011.
- To meet the requirements of redemption, the Company sold a portion of the investments, so as to leave a minimum balance of Rs.60,000 after such redemption.
- Investments were sold at 90% of cost on 31 March 2011.
You are required to:
- Prepare necessary journal entries to record redemption and issue of bonus shares
- Prepare the cash and bank account
- Prepare the balance sheet as at 31 March 2011 incorporating the above transactions.