a 27 Liabilities Rs. Illustration - 32 The Balance sheet of Z Ltd. at 31st March 2009 was as follows: Rs. Rs. Assets Rs Share capital Intangibles 68,000 Authorised 14.00.000 Freehold premises at cost 1,40,000 Issued and subscribed capital Plant and equipment at cost 64,000 8% cumulative Less depreciation 2.40.000 preference shares of Investments in shares in Rs. 10 each fully paid QLtd. at cost 3.24.000 64,000 equity shares of Stocks 248.000 Rs. 10 each, Rs.75 paid 4,80,000 Debtors 3,20,000 Loans from directors 60,000 Deferred revenue expenditure 48,000 Sundry creditors 4,40,000 Profit and Loss A/C 4,40,000 Bank overdraft 1,08,000 18,28,000 18,28,000 Note: The arrear of preference dividends amount to Rs 51,200 A scheme of reconstruction was duly approved with effect from 1 April 2009 under the conditions stated below: a. The unpaid amount on the equity shares would be called up. b. The preference shareholders would forego their arrear dividends. In addition, they would accept a reduction of Rs. 25 per share. The dividend rate would be enhanced to 10%. The equity shareholders would accept a reduction of Rs. 75 per share. d. Z Ltd. holds 21,600 shares in Q Ltd. This represents 15% of the Share capital of that ompany. Q Ltd is not a quoted company. The average net profit (after tax) of the company is Rs. 2,50,000. The shares would be valued based on 12% capitalisation rate. A bad debt provision at 2% would be created. c e. f The other assets would be valued as under: Rs Intangibles 48,000 Plant 1,40,000 Freehold premises 3,80,000 Stocks 2.50,000 g. The profit and loss account debit balance and the balance standing to the debit of the deferred revenue expenditure account would be eliminated. h. The directors would have to take equity shares at the new face value of Rs. 25 per share in settlement of their loan. The equity shareholders, including the directors, who would receive equity shares in settlement of their loans, would take up two new equity shares for every one held. i. The preference shareholders would take up one new preference share for every four held. i The authorised Share capital would be restated to Rs. 14,00,000 k. The new face values of the shares-preference and equity will be maintained at their reduced levels. You are required 1. to prepare the necessary ledger accounts to effect the above; and 2. to prepare the balance sheet of the company after reconstruction