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    305999570-Accounts 5

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    santosh kumar
    The document describes a scheme of reconstruction for a company approved by its board of directors and shareholders. Key points of the scheme include: preference shares being written down to Rs. 80 each and equity shares to Rs. 2 each, preference dividend arrears being waived partially with the remaining amount allotted as equity shares, a debentureholder taking a property at book value in partial payment and the balance remaining a liability, arrear debenture interest being paid in cash, a remaining property being valued at Rs. 4,00,000, an investment being sold for Rs. 2,50,000, part of a director's loan being waived with the balance allotted as equity shares, 20% of trade receivables

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    305999570-Accounts 5

    Uploaded by

    santosh kumar
    9 views1 page
    The document describes a scheme of reconstruction for a company approved by its board of directors and shareholders. Key points of the scheme include: preference shares being written down to Rs. 80 each and equity shares to Rs. 2 each, preference dividend arrears being waived partially with the remaining amount allotted as equity shares, a debentureholder taking a property at book value in partial payment and the balance remaining a liability, arrear debenture interest being paid in cash, a remaining property being valued at Rs. 4,00,000, an investment being sold for Rs. 2,50,000, part of a director's loan being waived with the balance allotted as equity shares, 20% of trade receivables

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    305999570-Accounts.5

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    The document describes a scheme of reconstruction for a company approved by its board of directors and shareholders. Key points of the scheme include: preference shares being written down to Rs. 80 each and equity shares to Rs. 2 each, preference dividend arrears being waived partially with the remaining amount allotted as equity shares, a debentureholder taking a property at book value in partial payment and the balance remaining a liability, arrear debenture interest being paid in cash, a remaining property being valued at Rs. 4,00,000, an investment being sold for Rs. 2,50,000, part of a director's loan being waived with the balance allotted as equity shares, 20% of trade receivables

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    Download as pdf or txt
    9 views1 page

    305999570-Accounts 5

    Uploaded by

    santosh kumar
    The document describes a scheme of reconstruction for a company approved by its board of directors and shareholders. Key points of the scheme include: preference shares being written down to Rs. 80 each and equity shares to Rs. 2 each, preference dividend arrears being waived partially with the remaining amount allotted as equity shares, a debentureholder taking a property at book value in partial payment and the balance remaining a liability, arrear debenture interest being paid in cash, a remaining property being valued at Rs. 4,00,000, an investment being sold for Rs. 2,50,000, part of a director's loan being waived with the balance allotted as equity shares, 20% of trade receivables

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    of 1

    Get More Updates From http://cawinners.

    com/

    PAPER 1 : ACCOUNTING

    The Board of Directors of the company decided upon the following scheme of
    reconstruction with the consent of respective shareholders:
    (i)

    Preference shares are to be written down to ` 80 each and equity shares to ` 2


    each.

    (ii) Preference dividend in arrear for 3 years to be waived by 2/3 rd and for balance 1/3 rd,
    equity shares of ` 2 each to be allotted.
    (iii) Debentureholders agreed to take one freehold property at its book value of
    ` 3,00,000 in part payment of their holding. Balance debentures to remain as
    liability of the company.
    (iv) Arrear debenture interest to be paid in cash.
    (v) Remaining freehold property to be valued at ` 4,00,000.
    (vi) Investment sold out for ` 2,50,000.
    (vii) 2,25,000 of Directors loan to be waived and for the balance, equity shares of ` 2
    each to be allotted.
    (viii) 20% of Trade receivables, 40% of Inventories to be written off.
    (ix) Companys contractual commitments amounting to ` 3,00,000 have been settled by
    paying 10% penalty of contract value.
    Show the Journal Entries for giving effect to the internal re-construction and draw the
    Balance Sheet of the company after effecting the scheme. Narrations may ignored.
    Amalgamation of Companies
    6.

    A Ltd. and B Ltd. were amalgamated on and from 1st April, 2015. A new company C Ltd.
    was formed to take over the business of the existing companies. The draft Balance
    Sheets of A Ltd. and B Ltd .as at 31 st March, 2015 are given below:
    (` in lakhs)
    Liabilities

    A Ltd.

    Share capital:

    B Ltd. Assets

    A Ltd.

    B Ltd.

    Fixed Assets:

    Equity shares of ` 100


    each

    400

    375 Land & Building

    275

    200

    12% Preference shares


    of ` 100 each

    150

    100 Plant & Machinery


    Investments

    175
    75

    125
    25

    175
    125

    125
    150

    Reserves and surplus:


    Revaluation reserve
    General reserve

    Current Assets, Loans


    and Advances:
    75
    85

    50 Inventory
    75 Debtors

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