Vee & Vee Ltd. was promoted to the year 2006. The working of the company was not successful. On 31 December 2010, the company’s balance sheet stood as follows:
|
Liabilities |
Assets |
||
|
Nominal Capital: |
Land |
3,00,000 |
|
|
60,000 Shares of |
60,00,000 |
Machinery |
7,80,000 |
|
Rs. 100 each |
|||
|
Subscribed |
Furniture |
60,000 |
|
|
Capital: |
|||
|
57,000 Shares of |
57,00,000 |
Stock |
11,10,000 |
|
Rs. 100 Each Fully |
|||
|
Paid |
|||
|
Creditors |
3,00,000 |
Debtors |
5,40,000 |
|
Stalin & Co. |
3,00,000 |
Goodwill |
6,00,000 |
|
P&L A/c |
29,10,000 |
||
|
63,00,000 |
63,00,00 |
The company is to be reconstructed on the basis of the following scheme:
- 57,000 Shares of Rs.100 each are to be reduced to an equal number of fully paid shares of Rs.40 each
- The debt of Rs.3,00,000 due to Stalin & Co. was also to be reduced the remaining 3,000 unissued shares being issued to them as fully paid up shares of Rs.40 each in full settlement of the amount due to them
- The amount thus rendered available by the reduction of capital and by the above arrangement with Stalin & Co. is to be utilized in wiping off goodwill and P&L A/c and in writing down the value of machinery
You are required to follow the scheme of reconstruction and prepare the new balance sheet of the company.