The following is the balance sheet of Singh Ltd. as at 31 March 2011:
|
Liabilities |
Assets |
||
|
Authorized Share Capital: |
|||
|
30,000 Shares of Rs. 10 Each |
30,00,000 |
Goodwill |
3,00,000 |
|
Issued, Subscribed & Paid up 3,000 9% |
Fixed Assets |
11,40,000 |
|
|
Cumulative Pref. Shares of 3100 Each |
3,00,000 |
Cash |
27,000 |
|
9,000 Equity Shares of f. 100 |
9,00,000 |
P&L A/c |
1,83,1000 |
|
13.5% Debentures |
3,00,000 |
||
|
Creditors (Including “30,000) Holding lien on Some Assets) |
1,50,000 |
||
|
16,50,000 |
16,50,000 |
The company decided on a scheme of reduction of capital which was duly authorized. The scheme provided as follows:
- The equity shares of Rs.100 each, Rs.50 paid up per share to be issued for each preference share
- Each existing equity share is to be reduced to Rs.50 paid up, the face value remaining the same at Rs.100
- 3,000 Equity shares were taken up by the directors and paid for by them to the extent of Rs.50 each
- Arrears of preference dividend for the last four years is to be cancelled
- Debenture holders to receive 2,400 equity share of Rs.100 each credited as fully paid up
- Unsecured creditors to be paid immediately to the extent of 10% of their claims and they accepting a remission of 20% of their claims
- The amount available as a result of the scheme to be used to write off the debit balance in the P&L A/c, to write down fixed assets by Rs.30,000 and to adjust goodwill
You are required to give journal entries to record the above and give the balance sheet after the reconstruction is effected.