i9 1. Share Capital 30,000 shares of 10 each fully paid (5,000 shares of 10 each, fully paid issued as bonus shares out of securities premium and P&L Account) 3,00.000 2. Reserve and Surplus Profit & Loss Account (1,20,000 - 3,600) 1,16,400 Less: Utilisation for issue of bonus shares (25,000) 91,400 3. Tangible assets Freehold Property 1,15,000 4. Cash and cash equivalents Cash at Bank 1,51,400 Cash in Hand 30.000 1,81,400 Note: The number of bonus shares issued has been calculated on the basis of issued capital before rights issued i.e., 20,000 shares and not 25,000 shares after rights issue). Illustration 9 The summarised Balance Sheet of Convertible Limited, as on 30th June, 2012, stood as follows: Liabilities Share Capital: 5,00,000 equity shares of 10 each fully paid 50,00.000 General Reserve 75,00,000 Debenture Redemption Reserve 50,00.000 13.5% Convertible Debentures, 1,00,000 Debentures of 100 each 1,00,00,000 Other loans 50,00.000 Current Liabilities and Provisions 1,25,00,000 4.50.00.000 Assets Fixed Assets (at cost less depreciation) 1,60,00,000 Debenture Redemption Reserve Investments 40,00.000 Cash and bank Balances 50,00.000 Other Current Assets 2,00,00,000 4.50.00.000 The debentures are due for redemption on 1st July, 2012. The terms of issue of debentures provided that they were redeemable at a premium 5% and also conferred option to the debenture holders to convert 20% of their holding into equity shares at a predetermined price of 15.75 per share and the payment in cash. Assuming that () except for 100 debenture holders holding totally 25,000 debentures, the rest of them exercised the option for maximum conversion (ii) the investments realise 44 lakhs on sale, and (it) all the transactions are put through, without any lag, on 1st July, 2012. Redraft the balance sheet of the company as on 1st July, 2012 after giving effect to the redemption. Show your calculations in respect of the number of equity shares to be allotted and the cash payment necessary