The Balance Sheet of the Premier Co. Ltd. is as follows:

As the company has been making losses for some time and the financial prospects seem to be unfavourable under its present financial setup, you are required to draw up a scheme of financial reorganisation, involving capital reduction. Show the new Balance Sheet of the company on the assumption that your scheme is given effect to. The following are certain relevant facts that may be considered in drawing up the scheme:
(a) Investments are valued at ₹ 25,000 in the market.
(b) Preference Shares are cumulative and preferential as regards dividend as well as capital.
(c) The company needs to have liquid resources of ₹ 15,000 for working capital purposes.
(d) Bad Debts are estimated at ₹ 1,500.
(e) Plant II, which was acquired after the issue of Debentures, is not put to proper use due to the retirement of a skilled engineer, who could not be replaced. The market value of Plant II is 5% below book value.

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I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus - General Reserve (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (4) Current Liabilities : Balance Sheet of Premier Co. Ltd. as at 31st March, 2016 Particulars (1) (a) Long-term Borrowings-6% Debentures TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets (a) Short-term Borrowings (b) Trade Payables -- Sundry Creditors Profit and Loss Account Staff Welfare Fund (i) Tangible Assets- (2) Current Assets: TOTAL Buildings Plant I Plant II (ii) Intangible Assets -- Goodwill (a) Current Investments (b) Inventories (c) Trade Receivables --- Sundry Debtors (d) Cash and Cash Equivalents - Cash at Bank Note No. (2) (1) Amount (3) (3) 2,50,000 15,000 (45,000) 10,000 30,000 45,000 3,05,000 1,20,000 40,000 48,000 25,000 20,000 15,000 30,000 7,000 3,05,000