7. The following is the Balance Sheet of Weak Ltd. on 31-3-2003 Liabilities Rs. Assets Rs. 2,00,000 Patents Buildings 50,000 Machinery Stock 40,000 2,00,000 1,30,000 80,000 55,000 1,95,000 20,000 Equity shares of Rs. 10 each 500 10% Pref. Shares of Rs. 100 each 1,00,000 Debtors 3,30,000 P & L A/c 20,000 8% Debentures Creditors Outstanding Expenses 7,00,000 7,00,000 With a view to reconstruct the company, it is proposed : (i) To reduce Equity share paid up amount by Rs. 9 each. (ii) To reduce 10% Preference shares by Rs. 40 each. (iii) To reduce 8% Debentures by 10% (iv) To reduce Trade Creditors' claim by one Third. ! (v) To reduce Machinery by Rs. 60,000 (vi) To reduce Inventory by Rs. 10,000 (vii) To provide Rs. 15,000 for bad debts (viii) To Write off all the intangible assets Pass Journal entries to give effect to the above scheme and show the company's Balance Sheet after reconstruction. [Madras, B.C.S. (ICE) Oct. 2003] (Ans : Capital Reduction : Rs. 3,20,000; B/S Total : Rs. 3,80,000J
7. The following is the Balance Sheet of Weak Ltd. on 31-3-2003 Liabilities Rs. Assets Rs. 2,00,000 Patents Buildings 50,000 Machinery Stock 40,000 2,00,000 1,30,000 80,000 55,000 1,95,000 20,000 Equity shares of Rs. 10 each 500 10% Pref. Shares of Rs. 100 each 1,00,000 Debtors 3,30,000 P & L A/c 20,000 8% Debentures Creditors Outstanding Expenses 7,00,000 7,00,000 With a view to reconstruct the company, it is proposed : (i) To reduce Equity share paid up amount by Rs. 9 each. (ii) To reduce 10% Preference shares by Rs. 40 each. (iii) To reduce 8% Debentures by 10% (iv) To reduce Trade Creditors' claim by one Third. ! (v) To reduce Machinery by Rs. 60,000 (vi) To reduce Inventory by Rs. 10,000 (vii) To provide Rs. 15,000 for bad debts (viii) To Write off all the intangible assets Pass Journal entries to give effect to the above scheme and show the company's Balance Sheet after reconstruction. [Madras, B.C.S. (ICE) Oct. 2003] (Ans : Capital Reduction : Rs. 3,20,000; B/S Total : Rs. 3,80,000J
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![7. The following is the Balance Sheet of Weak Ltd. on 31-3-2003
Liabilities
Rs.
Assets
Rs.
2,00,000 Patents
Buildings
50,000 Machinery
Stock
40,000
2,00,000
1,30,000
80,000
55,000
1,95,000
20,000 Equity shares of
Rs. 10 each
500 10% Pref. Shares of
Rs. 100 each
1,00,000 Debtors
3,30,000 P & L A/c
20,000
8% Debentures
Creditors
Outstanding Expenses
7,00,000
7,00,000
With a view to reconstruct the company, it is proposed :
(i) To reduce Equity share paid up amount by Rs. 9 each.
(ii) To reduce 10% Preference shares by Rs. 40 each.
(iii) To reduce 8% Debentures by 10%
(iv) To reduce Trade Creditors' claim by one Third. !
(v) To reduce Machinery by Rs. 60,000
(vi) To reduce Inventory by Rs. 10,000
(vii) To provide Rs. 15,000 for bad debts
(viii) To Write off all the intangible assets
Pass Journal entries to give effect to the above scheme and show the company's
Balance Sheet after reconstruction.
[Madras, B.C.S. (ICE) Oct. 2003]
(Ans : Capital Reduction : Rs. 3,20,000; B/S Total : Rs. 3,80,000J](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcc121a60-ee7c-486d-ad7f-35a95b4a512c%2F6f731a21-5cc4-4a92-9312-0665a08bee10%2Fgmzrq29_processed.jpeg&w=3840&q=75)
Transcribed Image Text:7. The following is the Balance Sheet of Weak Ltd. on 31-3-2003
Liabilities
Rs.
Assets
Rs.
2,00,000 Patents
Buildings
50,000 Machinery
Stock
40,000
2,00,000
1,30,000
80,000
55,000
1,95,000
20,000 Equity shares of
Rs. 10 each
500 10% Pref. Shares of
Rs. 100 each
1,00,000 Debtors
3,30,000 P & L A/c
20,000
8% Debentures
Creditors
Outstanding Expenses
7,00,000
7,00,000
With a view to reconstruct the company, it is proposed :
(i) To reduce Equity share paid up amount by Rs. 9 each.
(ii) To reduce 10% Preference shares by Rs. 40 each.
(iii) To reduce 8% Debentures by 10%
(iv) To reduce Trade Creditors' claim by one Third. !
(v) To reduce Machinery by Rs. 60,000
(vi) To reduce Inventory by Rs. 10,000
(vii) To provide Rs. 15,000 for bad debts
(viii) To Write off all the intangible assets
Pass Journal entries to give effect to the above scheme and show the company's
Balance Sheet after reconstruction.
[Madras, B.C.S. (ICE) Oct. 2003]
(Ans : Capital Reduction : Rs. 3,20,000; B/S Total : Rs. 3,80,000J
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