The balance sheet of Power link Ltd. as on 31st March, 2011 is as follows:
|
Liabilities |
|
|
Assets |
|
Share capital: |
|
Fixed Assets |
66,00,000 |
|
5,00,000 equity shares of |
|
Investments |
18,00,000 |
|
10 each, fully paid |
50,00,000 |
Stock |
11,87,000 |
|
General Reserve |
6,50,000 |
Sundry debtors |
9,60,000 |
|
Securities Premium |
5,40,000 |
Cash and bank balance |
7,10,000 |
|
Profit and Loss Account |
3,75,000 |
|
|
|
12% Debentures |
25,00,000 |
|
|
|
Term Loans |
13,25,000 |
|
|
|
Sundry Creditors |
7,42,000 |
|
|
|
Provision for tax |
1,25,000 |
|
|
|
|
1,12,57,000 |
|
1,12,57,000 |
The shareholders adopted the resolution on the date of the abovementioned balance sheet to:
(i) buy back 20% of the paid up capital @ Rs.15 each.
(ii) issue 13% debentures of Rs.5,00,000 at a premium of 10% to finance the buy back of shares.
(iii) maintain a balance of Rs.3,00,000 in general reserve account, and
(iv) sell investments worth Rs.8,00,000 for Rs.6,50,000.
Pass necessary journal entries to record the above transactions and prepare the balance sheet immediately after the buy back.