The summarised Balance Sheet of Twist Ltd is as follows.

The preference shares had been issued at a premium of $0.20 per share. 

The preference shares are to be redeemed at $1.20 per share. No new issue of shares is to be made for the purpose of the redemption. 

Required 

(a) Show how the Balance Sheet of Twist Ltd will appear after the redemption of the preference shares. The preference shares are to be redeemed after a new issue of 200 000 ordinary shares of $1 has been made at $1.10 per share.

(b) Show how the Balance Sheet of Twist Ltd will appear after completion of the new issue of ordinary shares and the redemption of the preference shares. The preference shares are to be redeemed after a new issue of 250 000 ordinary shares of $1 has been made at $1.25. 

(c) Show how the Balance Sheet of Twist Ltd will appear after the new issue of ordinary shares and the redemption of the preference shares.

Transcribed Image Text:

Fixed assets Net current assets Ordinary shares of $1 10% preference shares of $1 Share Premium account Profit and Loss Account SAME $000 2000 800 2800 2000 250 200 Dlaco 350 2800