Illustration - 38 a31 Lazy Ltd. and Yummy Ltd. are two companies. On 31st March, 2009 their Balance Sheets were as under: (Rs. in crores) Lazy Ltd. Yummy Ltd. Sources of funds Share capital Authroised 500 500 Issued: Equity shares of Rs. 100 each fully paid up 300 200 Reserves and surplus. Capital reserves 40 20 Revenue reserves 700 425 Surplus 10 750 5 450 Owners' funds 650 Loan 250 350 Total 1.300 1,000 Funds' employed in: Fixed assets Cost 1,000 700 Less: Depreciation (4.00) 600 (300) 400 Net Current assets : Current assets 2,000 1,500 Less : Current liabilities (1.300) 700 1900) 600 1,300 1,000 Lazy Ltd. has 2 divisions - very profitable loss making division B. Yummy Ltd. similarly has 2 divisions-very profitable division and loss making division A. 1,050 The two companies decided to reorganise. Necessary approval's from creditors and members and sancun by High Court have been obtained to the following scheme. 1. 2. Division B of Lazy Ltd. which has Fixed assets costing Rs. 400 crores (written down value Rs. 160 crores). Current assets Rs. 900 crores, Current liabilities Rs. 750 crores and loan funds of Rs. 200 crores is to be transferred at Rs. 125 crores to Yummy Ltd. Division A of Yummy Ltd. which has Fixed assets costing Rs. 500 crores (depreciation Rs.200 crores), Current assets Rs.800 crores Current liabilities Rs. 700 crores and loan funds Rs.250 crores is to be transferred at Rs.140 crores to Lazy Ltd. The difference in the two consideration is to be treated as loan carrying interest at 15% per annum. The directors of each of the companies revalued the Fixed assets taken over as follows: i. Division A of Yummy Ltd. taken over: Rs. 325 crores. ii. Division B of Lazy Ltd. taken over: Rs. 200 crores. 3. 4 a All the other assets and liabilities are recorded at the Balance sheet values. The directors of both the companies ask you to prepare the balance sheets after reconstruction (showing the corresponding figures before reconstruction) b. Mr. Pravin, who owns 5,000 equity shares of Lazy Ltd. and 3,000 equity shares of Yummy Ltd. wants to know whether he has gained or lost in terms of net asset value of equity shares on the above recognisation