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Value of equity share on net asset basis.

Value of equity share on net asset basis.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Kate Ltd. furnishes you with the following Balance Sheet as at 31st March, 2016. $ in crores 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : Authorised 100 Issued: 12% Redeemable Preference Shares oft 100 each Fully Paid 75 Equity Shares of $10 each Fully Paid 25 (b) Reserves and Surplus : Capital Reserve 15 Securities Premium Reserve 25 Revenue Reserves 260 (2) Non-current Liabilities Nil Current Liabilities 40 Total Equity and Liabilities 440 II. Assets $ in crores (1) Non-current Assets (a) Fixed Assets at Cost 100 Less : Provision for Depreciation 100 Nil (b) Investments at Cost (Market Value $ 400 cr.) 100 (2) Current Assets 340 Total Assets 440 The company redeemed preference shares on 1st April, 2016. It also bought back 50 lakhs equi shares of $10 each at $50 per share. The payments for the above were made out of the huge bank balances, which appeared as part of current assets. You are asked to:
Transcribed Image Text:Kate Ltd. furnishes you with the following Balance Sheet as at 31st March, 2016. $ in crores 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : Authorised 100 Issued: 12% Redeemable Preference Shares oft 100 each Fully Paid 75 Equity Shares of $10 each Fully Paid 25 (b) Reserves and Surplus : Capital Reserve 15 Securities Premium Reserve 25 Revenue Reserves 260 (2) Non-current Liabilities Nil Current Liabilities 40 Total Equity and Liabilities 440 II. Assets $ in crores (1) Non-current Assets (a) Fixed Assets at Cost 100 Less : Provision for Depreciation 100 Nil (b) Investments at Cost (Market Value $ 400 cr.) 100 (2) Current Assets 340 Total Assets 440 The company redeemed preference shares on 1st April, 2016. It also bought back 50 lakhs equi shares of $10 each at $50 per share. The payments for the above were made out of the huge bank balances, which appeared as part of current assets. You are asked to:
(i) (ii) (iii) Pass Journal Entries to record the above. Prepare Balance Sheet Value of equity share on net asset basis.
Transcribed Image Text:(i) (ii) (iii) Pass Journal Entries to record the above. Prepare Balance Sheet Value of equity share on net asset basis.
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