Model: Revaluation of assets—Surrender of shares. The following information relates to Sick Ltd. as on 31 December 2010:
| Rs. | |
|
12,000 Equity Share of Rs.100 Each |
12,00,000 |
|
6,000 6% Debentures of Rs.100 Each |
6,00,000 |
|
Interest on Debentures Outstanding |
72,000 |
|
Trade Creditors |
3,00,000 |
|
Fixed Assets |
12,00,000 |
|
Current Assets |
3,90,000 |
The following scheme was duly agreed and approved by the Court:
- The shares were sub-divided into shares of Rs.5 each and 90% of the shares were surrendered
- The total claims of debenture holders were reduced to Rs.2,94,000 and in consideration of this, they were allotted shares (out of the surrendered shares) amounting to Rs.1,50,000
- Creditors agreed to reduce their claims to Rs.90,000, one-third of which was satisfied by issue of equity shares out of those surrendered
- Fixed assets were revalued at Rs.5,76,000 and current assets were revalued at Rs.2,88,000
- The shares surrendered but not re-issued were cancelled You are required to draft the necessary journal entries and give the balance sheet of the company after reconstruction.