Below is the Balance Sheet of the Excellent Ltd. as at 31st March, 2011.
Liabilities |
Rs |
Assets |
Rs |
Share Capital: |
|
Fixed Assets: |
|
Authorised |
15,00,000 |
Plant and Machinery |
6,00,000 |
Issued and Subscribed: |
|
Furniture and Fittings |
75,000 |
2,000 8% Redeemable |
|
Investments |
1,00,000 |
Preference Shares of |
|
|
|
100 each, fully |
|
Current Assets, Loans |
|
paid up |
2,00,000 |
and Advances: |
|
50,000 Equity Shares |
|
(a) Current Assets |
|
of 10 each fully |
|
Stock |
1,70,000 |
paid up |
5,00,000 |
Debtors |
65,000 |
Reserves and Surplus: |
|
Cash at Bank |
80,000 |
Capital Reserve |
25,000 |
(b) Loans and Advances: |
Nil |
Securities Premium |
30,000 |
|
|
General reserve |
1,60,000 |
||
Profit and Loss Account |
1,38,000 |
||
Current Liabilities and Provisions: |
|||
(A) Current liabilities: Sundry Creditors |
37,000 |
||
(B) Provisions |
|||
10,90,000 |
10,90,000 |
On this date the company decided to redeem its preference shares at a premium of 5%. For this purpose, investments were sold for Rs.1,10,000 and Rs.10,000 equity shares of Rs.10 each were issued at a premium of Rs.1 each.
After redemption of preference shares, the company issued one bonus share of Rs.10 each for every five equity shares held.
Pass journal entries to record the above mentioned transactions and prepare the balance sheet as it would appear thereafter.