The ledger balances of Tick Tick Ltd at 31 March 2011 were as follows:

A capital reduction scheme has been sanctioned under which the 250,000 preference shares are to be reduced to 80p each, fully paid; and the 500,000 ordinary shares are to be reduced to 20p each, fully paid.
Development expenditure and the debit balance of retained profits are to be written off, the balance remaining being used to reduce the book value of the plant.

Required:
Prepare the journal entries recording the reduction scheme and the balance sheet as it would appear immediately after the reduction. Narrations are not required in connection with journal entries.

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Freehold premises Plant Inventory Accounts receivable 90,000 300,000 82,000 96,000 Development expenditure* 110,000 Cash at bank 11,000 Retained profits (debit balance) 121,000 250,000 8% preference shares of 1 each 500,000 ordinary shares of 1 each 250,000 500,000 Accounts payable 60,000