DU OUT OF WHICH Llores Equity shares are issued for consideration Investment (Un quoated) other than cash) Shares of Sunrise 10 Reserve Surplus Debentures of Sunrise 500 510 Capital reserve 240 Current assets Loans and 1,000 Revenue reserve 750 Advances Less: Bonus Issue (250) 500 Current liabilities and 300 Provisions 1,540 1,540 Capital commitment by Sunrise Ltd. Rs. 700 Crores. Guarantees given in respect of liabilities transferred to Sunrise Ltd, and Khajana Ltd. amounting to Rs. 2100 Crores and Rs. 600 Crores respectively 17> Q. 25. AB Ltd has 2 divisions - A and B. The Balance Sheet as at 30th June, 2010 was as under: (in Crores) B Total Fixed assets Cost 600 300 900 Depreciation 500 100 600 W.D.V. 100 200 300 Net Current assets Current assets 400 300 700 Less: Current Liabilities 100 300 100 200 200 500 400 400 800 Financed by : Loans funds 100 100 (Secured by a charge on Fixed assets) 100 100 Own funds : Equity capital 50 (Fully paid up Rs. 10 shares) 650 Reserves and surplus 700 Total 400 400 800 Total - + It is decided to form a new comapny B Ltd., to take over the assets and liabilities of B division. According B. Ltd. was incorporated to take over at balance sheet figures, the assets and liabilities of that division. B Ltd. is to allot 5 crores equity shars of Rs. 10 each in the company to the members of AB Ltd., in full settlement of the consideration. The members of AB Ltd. are therefore to become members of BLtd. as well without having to make any further investment. a. You are asked to pass journal entries in relation to the above in the books of AB Ltd. and B. Ltd. Also show the Balance Sheets of the 2 companies as on the morning of 1st August, 2010, showing corresponding previous year's figures. b. The directors of the 2 companies, ask you to find out the net asset value of equity shares pre and post demerger. Comment on the impact of demerger on "shareholders welth