The following is the balance sheet of Seven Stars Ltd. as at 31 December 2011:
|
Liabilities |
Assets |
||
|
Preference Share |
Fixed Assets |
18,00,000 |
|
|
Capital: |
Investments |
1,50,000 |
|
|
7,500 Shares of |
7,50,000 |
Bank |
2,70,000 |
|
Rs. 100 Each Fully |
|||
|
Called Up |
|||
|
Less: Final Call of Rs. 20 Per Share |
6,000 |
||
|
Unpaid |
|||
|
7,44,000 |
|||
|
Equity Share |
|||
|
Capital: |
|||
|
90,000 Shares of |
9,00,000 |
||
|
Z 10 Each Fully |
|||
|
Paid Up |
|||
|
Securities premium |
45,000 |
||
|
Profit & Loss A/c |
4,50,000 |
||
|
Sundry Csreditors |
81,000 |
||
|
22,20,000 |
22,20,000 |
On 30 May 2011, the Board of Directors decided to redeem the preference shares at a premium of 10% and to sell the investments at its market price of Rs.1,20,000. They also decided to issue sufficient number of equity shares of Rs.10 each at a premium of Rs.1 per share, required after utilizing the P&L A/c leaving a balance of Rs.1,50,000. Premium on redemption is required to set off against securities premium account.
Repayments on redemption were made in full except one shareholder holding 150 shares due to his leaving India for good. Assume that calls-in-arrears were received in full. You are required to show the journal entries and the balance sheet of the company after redemption.