Solution-Prepare the balance sheet after reconstruction

Prepare the balance sheet after reconstruction

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Reference no: EM132202308

Question - The Balance Sheet of Nirupama Co. Ltd., as on 31.3.2010 was as follows:

Liabilities	Rs.	Assets	Rs.
Share Capital 10000 Equity shares of Rs.10 each	1,00,000	Goodwill	10,000
10,000 7% preference shares of Rs.10 each	1,00,000	Fixed Assets	90,000
		Stock	25,000
		Debtors	30,000
		Profit & Loss A/c	45,000
	2,00,000		2,00,000

The following scheme of reconstruction was approved.

a) The equity share of Rs.10 each to be reduced to Rs.6 each.

b) 7% preference shares of Rs.10 each to be reduced to Rs.6 each.

c) The amount available can be utilized to write off goodwill, profit and loss account and the balance fixed assets.

d) The arrear of preference dividend for the last three years are cancelled.

Required - Pass necessary journal entries and prepare the balance sheet after reconstruction.

Reference no: EM132202308

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Prepare the balance sheet after reconstruction

Reference no: EM132202308

Reference no: EM132202308

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