Revenue reserve Opening balance Less : Transfer to B Ltd. Less : Cancel due from B Ltd, Closing balance Net assets before and after reorganisation 650 (250) (50) 350 d Value of total assets Less : Loan funds Net assets b. (Rs. in crores) B AB 400 400 (100) 400 300 800 (100) 700 d Net assets belonging to Equity share holders after December 700 Conclusion : The impact on share holders wealth after reorganisation is Nil Q. 26. KLtd. furnishes you with the following Balance Sheet as at 31st March, 2010: (Rs. in Crores) 100 75 Sources of Funds Share capital: Authorised Issued : 12% redeemable preference shares of Rs. 100 each fully paid Equity shares of Rs. 10 each fully paid Reserves and surplus Capital reserve Share Premium Revenue reserves 25 100 15 25 260 300 400 100 100 nil Funds employed in : Fixed assets : cost Less: Provision for depreciation Investments at cost (Market value Rs. 400 Cr.) Current assets Less : Current liabilities 100 340 40 300 400 n78 The company redeemed preference shares on 1 st April 2010. It also bought back 50 lakh equity shares of Rs. 10 each at Rs. 50 share. The payments for the above were made out of the huge bank balances, which appeared as a part of Current assets. You are asked to: i. Pass journal entries to record the above ii. Prepare balance sheet iii. Value equity share on net asset basis