The following is the balance sheet of Alpha Ltd as on 30 June 20X8:

The following information is relevant:
I There are contingent liabilities in respect of (i) a guarantee given to bankers to cover a loan of £30,000 made to the subsidiar y and (ii) uncalled capital of I0p per share on the holding of 100,000 shares of £I each in the subsidiar y.
2 The arrears of preference dividend amount to £106,250.
3 The following capital reconstruction scheme, to take effect as from I July 20X8, has been duly approved and authorised:
(i) the unpaid capital on the ordinar y shares to be called up;
(ii) the ordinar y shares thereupon to be reduced to shares of 25p each fully paid up by cancelling 75p per share and then each fully paid share of 25p to be subdivided into five shares of 5p each fully paid;
(iii) the holders to surrender three of such 5p shares out of ever y five held for reissue as set out below;
(iv) the 81⁄2% cumulative preference shares together with all arrears of dividend to be surren-dered and cancelled on the basis that the holder of ever y 50 preference shares will pay to Alpha a sum of £30 in cash, and will be issued with;

(a) one £40 conver tible 73\4% note of £40 each, and

(b) 60 fully paid ordinar y shares of 5p each (being a redistribution of shares surrendered by the ordinar y shareholders and referred to in (iii) above);
(v) the unpaid capital on the shares in the subsidiar y to be called up and paid by the parent company whose guarantee to the bank should be cancelled;
(vi) the freehold proper ty to be revalued at £55,000;
(vii) the adverse balance on retained earnings to be written off, £55,000 to be written off the shares in the subsidiar y and the sums made available by the scheme to be used to write down the plant Required:

(a) Prepare a capital reduction and reorganisation account.

(b) Prepare the balance sheet of the company as it would appear immediately after completion of the scheme.

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Non-current assets 000 000 000 Cost Accumulated Freehold property 46 Plant 85 131 Investments Shares in subsidiary company Loans Current assets Inventory Trade receivables Current liabilities Trade payables Bank overdraft Net current liabilities Total assets less liabilities Capital and reserves 250,000 8% cumulative redeemable preference shares of l each fully paid 100,000 ordinary shares of l each 75p paid Retained earnings depreciation 79 120 90 40 130 30 132 106 238 282 58 340 (102) 148 250 75 325 (177) 148