Rs. Liabilities Share capital Debentures Unsecured Loans 3,90,000 3,90,000 7,80,000 Cr. Dr. Particulars To Profit and Loss A/S Rs. Assets 1,95,000 Fixed assets 5,10,000 Cash 75,000 7,80,000 Reconstruction Account Rs. Particulars 8,70,000 By A's A/C By B's A/C By Unsecured creditors By Equity Share Capital 8,70,000 Cash/Bank Account Rs. Particulars 3,00,000 By B's A/c A 1,80,000 By Balance c/d 4,80,000 Rs. 2,10,000 2,70,000 75,000 3,15,000 8,70,000 Gr. Dr. Particulars Rs. To A's A/C To Share call A/C 90,000 3,90,000 4,80,000 Illustration - 31 The following was the Balance Sheet of Bhushan Developers Ltd., as on 31st March 2009: Liabilities Rs. Assets Authorised capital: Goodwill 20,000 Equity Shares of Land and buildings Rs. 10 each 2.00,000 Machinery Issued, subscribed and Stock paid up capital Book debts 12,000 Shares of Cash at bank Rs. 10 each 1,20,000 Profit and Loss A/c: Less: Calls in arrear Balance as per last (Rs. 3 per share Rs. 10,000 20,500 50,850 10,275 15,000 1,500 a26 Liabilities Rs. Assets Rs. Balance Sheet 22,000 on 3,000 shares) 19.000 Less: Profit for the year (1.200) 1,11,000 Sundry creditors 15,425 20,800 Provision for taxation 4,000 Preliminary expenses 1,500 1,30,425 1,30,425 The directors have had a valuation made of the machinery and find it overvalued by Rs.10,000. It is proposed to write down this asset to its true value and to extinguish the deficiency in the Profit and loss account and to write off goodwill and preliminary expenses, by the adoption of the following course : 1. Forfeit the shares on which the call is outstanding 2. Reduce the paid up capital by Rs.3 per share. 3. Reissue the forfeited shares at Rs.5 per share. 4. Utilise the provision for taxes, if necessary. The shares on which the calls were in arrear were duly forfeited and reissued on payment of Rs.5 per share. You are requested to draft the journal entries necessary and the Balance sheet of the Company after carrying out the terms of the scheme as set above