The following is the summarized balance sheet of Tabu Ltd at $31$ October $2021$

Sh$.$ Sh$.$ Sh$.$

Non$-$current assets

Tangible: Freehold property $85,000$

Plant $10,000$

$95,000$

Intangible: Patents $10,500$

Goodwill $28,00038,500$

$133,500$

Current assets:

Stock $85,000$

Debtors $97,000$

Investments $($market Sh$.25$ million$)11,000$

Deferred advertising $20,000$

$213,000$

Current Assets:

Bank overdraft $39,000$

Creditors $50,000$

Debentures interest payable $4,500$

Accruals $10,000$

Directors loans $20,000(123,500)89,500$

$223,000$

Financed By:

Share capital

$6\%8$ million cumulative preference shares of

Sh$.10$ each $80,000$

$15$ million ordinary shares of Sh$.10$ each $150,000$

$230,000$

Revenue reserves:

Profit and loss account $(82,000)$

Shareholders funds $148,000$

Non$-$current liabilities:

$6\%$ debentures $75,000$

$223,600$

The court approved a scheme of re$-$organization submitted by the debenture holders and agreed upon by other interested parties to take effect on $1$ November $2021$ as follows.

$1.$ The preferences shares to be written down to Sh$.7\mathrm{.}50$ each and the ordinary shares to Sh$.$

$2\mathrm{.}00$ each; each class of share then to be consolidated into shares of Sh$.10$ each. The rate of dividend on preference shares to be increased to $10\%.$

$2.$ The preference dividends are four years in arrears of which three$-$quarters are to be waived and ordinary shares are to be allocated at par for the balance.

$3.$ The debenture holders to have their interest paid in cash, to take over freehold property $($book value Sh$.20$ million$)$ and a valuation of Sh$.24$ million in part prepayment of their holding and to provide additional cash capital of Sh$.26$ million secured by a floating charge on the company$$s assets at an interest rate of Sh$.12\%$ per annum.

$4.$ Patents, goodwill and deferred advertising to be written off, Sh$.15$ million to be written of stock, Sh$.11\mathrm{.}7$ million to be provided for bad debts and the remaining freehold properties to be revalued at Sh$.77\mathrm{.}5$ million.

$5.$ Investments to be realized.

$6.$ The directors to accept settlement of their loans as to $90\%$ thereof by allotment or ordinary shares at par and as to $5\%$ in cash, the balance of $5\%$ being waived.

$7.$ The trade creditors to be paid Sh$.0\mathrm{.}10$ in every shilling to maintain and obtain an extension of the credit period

$8.$ The bank has sanctioned an overdraft limit of Sh$.10$ million to provide working capital

$9.$ There are capital commitments amounting to Sh$.75$ million which are to be cancelled on payment of $31/3\%$ of the contract price as a penalty

$10.$ The authorized capital was restored to its original amount

Required:

a$)$ The capital reduction account to record the scheme of capital re$-$organization

b$)$ The Statement of financial position of Tabu Limited as at $1$ November $2021$ immediately after effecting the scheme.