.The Balance Sheet of Nirupama Co. Ltd., as on 31.3.2010 was as follows :

Liabilities Rs. Assets Rs.

Share Capital 10000 Goodwill 10,000

Equity shares of Rs.10 each 1,00,000 Fixed Assets 90,000

10,000 7% preference

shares of Rs.10 each 1,00,000 Stock 25,000

Debtors 30,000

Profit & Loss A/c 45,000

2,00,000 2,00,000

The following scheme of reconstruction was approved.

a) The equity share of Rs.10 each to be reduced to Rs.6 each.

b) 7% preference shares of Rs.10 each to be reduced to Rs.6 each.

c) The amount available can be utilized to write off goodwill, profit and loss account and the balance fixed assets.

d) The arrear of preference dividend for the last three years are cancelled.

Pass necessary journal entries and prepare the balance sheet after reconstruction.