ILLUSTRATION 13. Following is the Balance Sheet of Trymore Engineering Company Ltd. as at 31st March, 2016: I. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : 3,000 Equity Shares of 100 each fully paid 2,000 6% Cumulative Preference Shares of 100 each fully paid (b) Reserves and Surplus: Surplus A/e (Negative Balance) 3,00,000 2,00,000 (-) 3,00,000 (2) Non-current Liabilities 10% Debentures 2,50,000 (3) Current Liabilities Sundry Creditors (Unsecured) Interest due on Debentures 3,50,000 50,000 Total Equity and Liabilities 8,50,000 п. Аssets (1) Non-current Assets (a) Fixed Assets: Plant & Machinery 2,00,000 Sundry Fixed Assets Intangible Assets: Goodwill 30,000 80,000 40,000 2,00,000 Patents (b) Investments (Market Value 1,50,000) (2) Current Aasets Stock 1,00,000 25,000 1,25,000 50,000 Sundry Debtors: More than 6 months Others Cash & Bank Balances Total Assets 8,50,000 Note : Preference Dividends are in arrears for 5 years. The Company feels that the worst is over and that suitable reconstruction will enable the Company to regain its lost position in the market. It is found that the plant and Machinery is worth $ 1,60,000, Patents are worth $ 30,000 and Sundry Fixed Assets are worth $ 20,000, Stocks of the value of $ 25,000 are obsolete and cannot be sold. Debtors outstanding for more than 6 months are irrecoverable. The decline in the market value of Investments is of a permanent nature. As the Financial Advisor of the Company you are required to suggest an appropriate scheme of Reconstruction.
ILLUSTRATION 13. Following is the Balance Sheet of Trymore Engineering Company Ltd. as at 31st March, 2016: I. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : 3,000 Equity Shares of 100 each fully paid 2,000 6% Cumulative Preference Shares of 100 each fully paid (b) Reserves and Surplus: Surplus A/e (Negative Balance) 3,00,000 2,00,000 (-) 3,00,000 (2) Non-current Liabilities 10% Debentures 2,50,000 (3) Current Liabilities Sundry Creditors (Unsecured) Interest due on Debentures 3,50,000 50,000 Total Equity and Liabilities 8,50,000 п. Аssets (1) Non-current Assets (a) Fixed Assets: Plant & Machinery 2,00,000 Sundry Fixed Assets Intangible Assets: Goodwill 30,000 80,000 40,000 2,00,000 Patents (b) Investments (Market Value 1,50,000) (2) Current Aasets Stock 1,00,000 25,000 1,25,000 50,000 Sundry Debtors: More than 6 months Others Cash & Bank Balances Total Assets 8,50,000 Note : Preference Dividends are in arrears for 5 years. The Company feels that the worst is over and that suitable reconstruction will enable the Company to regain its lost position in the market. It is found that the plant and Machinery is worth $ 1,60,000, Patents are worth $ 30,000 and Sundry Fixed Assets are worth $ 20,000, Stocks of the value of $ 25,000 are obsolete and cannot be sold. Debtors outstanding for more than 6 months are irrecoverable. The decline in the market value of Investments is of a permanent nature. As the Financial Advisor of the Company you are required to suggest an appropriate scheme of Reconstruction.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:ILLUSTRATION 13. Following is the Balance Sheet of Trymore Engineering Company Ltd. as at
31st March, 2016 :
I. Equity and Liabilities
(1) Shareholders' Funds
(a) Share Capital :
3,000 Equity Shares of 100 each fully paid
2,000 6% Cumulative Preference Shares of 100
each fully paid
(b) Reserves and Surplus:
Surplus A/c (Negative Balance)
Non-current Liabilities
10% Debentures
3,00,000
2,00,000
(-) 3,00,000
(2)
2,50,000
(3) Current Liabilities
Sundry Creditors (Unsecured)
Interest due on Debentures
3,50,000
50,000
Total Equity and Liabilities
8,50,000
II. Assets
(1) Non-current Assets
(a) Fixed Assets :
Plant & Machinery
2,00,000
Sundry Fixed Assets
Intangible Assets : Goodwill
30,000
80,000
40,000
2,00,000
Patents
(b) Investments (Market Value 1,50,000)
(2) Current Assets
Stock
Sundry Debtors : More than 6 months
1,00,000
25,000
Others
Cash & Bank Balances
1,25,000
50,000
Total Assets
8,50,000
Note : Preference Dividends are in arrears for 5 years.
The Company feels that the worst is over and that suitable reconstruction will enable the Company to
regain its lost position in the market,
It is found that the plant and Machinery is worth $ 1,60,000, Patents are worth $ 30,000 and Sundry
Fixed Assets are worth $ 20,000, Stocks of the value of $ 25,000 are obsolete and cannot be sold. Debtors
outstanding for more than 6 months are irrecoverable. The decline in the market value of Investments is
of a permanent nature.
As the Financial Advisor of the Company you are required to suggest an appropriate scheme of
Reconstruction.
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