The following information relates to Sick Ltd. as on 31 December 2010:
|
16,000 Equity Shares of 100 |
16,00,000 |
|
8,000 6% Debentures of 100 |
8,00,000 |
|
Interest on Debentures |
96,000 |
|
Trade Creditors |
4,00,000 |
|
Fixed Assets |
16,00,000 |
|
Current Assets |
5,20,000 |
The following scheme was duly agreed and approved by the Court:
- The shares were sub-divided into shares of 5 each and 90% of the shares were surrendered
- The total claims of debenture holders were reduced to Rs.3,92,000, and in consideration of this, they were allotted shares (out of the surrendered shares) amounting to Rs.2,00,000
- Creditors agreed to reduce their claims to Rs.1,20,000, one-third of which was satisfied by issue of equity shares out of those surrendered
- Fixed assets were revalued at Rs.7,68,000 and current assets were revalued at Rs.3,84,000
- The shares surrendered but not re-issued were cancelled Make journal entries and give the balance sheet after reconstruction.