The following is the balance sheet of Oscar India Ltd. as on 31st March 201 1:
|
Liabilities |
. |
Assets |
|
|
Preference share capital: |
|
Fixed assets |
6,00,000 |
|
2,500 shares of Rs.100 |
|
Investment |
50,000 |
|
each fully called up |
2,50,000 |
Bank |
90,000 |
|
Less: Final call @ Rs.20 |
|
|
|
|
per share unpaid |
2,000 |
|
|
|
|
2,48,000 |
|
|
|
Equity share capital: |
|
|
|
|
30,000 shares of Rs.10 |
|
|
|
|
each fully paid up |
3,00,000 |
|
|
|
Profit and loss A/c |
1,50,000 |
|
|
|
Securities premium |
15,000 |
|
|
|
Creditors |
27,000 |
|
_______ |
|
|
7,40,000 |
|
7,40,000 |
On 30th June, 2011, the Board of directors decided to redeem the preference shares at a premium of 10% and to sell the investments at its market price of Rs.40,000. They also decided to issue sufficient number of equity shares of Rs.10 each at a premium of Re. 1 per share, required after utilising the profit and loss account leaving a balance of Rs.50,000. Premium on redemption is required to be set off against securities premium account.
Repayments on redemption were made in full except to one shareholder holding 50 shares only due to his leaving India for good.
You are required to show the journal entries and the balance sheet of the company after redemption. Assumption made should be shown in the working.