The Balance Sheet of Swan Ltd. as on 31.3.2016 was as follows:The following scheme of reconstruction was adopted:

(a) The preference shares be reduced to an equal number of fully paid shares of ₹ 50 each.

(b) The equity shares be reduced to 25% of their present values.

(c) The amount available be used to write-off 30,800 from leasehold premises, ₹ 15,000 from stock, 20% off plant and machinery and sundry debtors. The balance available will be utilised in writing-off patents after the remaining intangible assets are written-off in full. Journalise the transactions in the books of the Company and prepare the Balance Sheet after the reconstruction.

Transcribed Image Text:

I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus-Profit and Loss Account Balance Sheet of Swan Ltd. as at 31st March, 2016 (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (4) Current Liabilities: (a) Short-term Borrowings --- Bank Loan (b) Trade Payables --- Sundry Creditors TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets Particulars (1) (i) Tangible Assets: TOTAL Leasehold Premises Plant and Machinery (ii) Intangible Assets -- Patents at Cost (2) Current Assets : (a) Inventories (b) Trade Receivables ---Debtors (c) Cash and Cash Equivalents -- Cash at Bank Note No. (2) (1) Amount (₹) (3) 12,50,000 (1,45,000) 20,000 30,000 11,55,000 1,30,800 42,000 8,50,000 56,500 75,200 500 11,55,000