The following is the balance sheet of Mark Ltd., as 31st March, 2011
|
Liabilities |
Rs |
Assets |
Rs |
|
Share Capital : |
Sundry Assets |
5,48,000 |
|
|
10,000 12% Preference Shares |
|
Preliminary Expenses |
5,000 |
|
of Rs.10 each fully paid |
1,00,000 |
Discount on |
|
|
30,000 Equity Shares of Rs.10 |
|
debentures |
2,000 |
|
each fully paid |
3,00,000 |
Profit & Loss Account |
35,000 |
|
General Reserve |
10,000 |
||
|
Debenture redemption fund |
20,000 |
||
|
Depreciation fund |
15,000 |
||
|
10% Debentures |
50,000 |
||
|
Sundry Creditors |
95,000 |
||
|
5,90,000 |
5,90,000 |
The debenture interest is owing for six months and dividends on preference shares are in arrears for one year. Assuming the assets are worth their book values, show the approximate value of preference and equity shares if :
(i) Preference shares are preferential as to capital and arrears are payable in a winding up; and:
(ii) Preference shares are preferential as to capital but arrears of preference dividends are not payable.