The following is the summarised Balance Sheet of AB Ltd. as on 31st March, 2016:

(a) There is a contingent liability of ₹ 30,000.

(b) Preference shares are cumulative and dividends are in arrear for three years. A capital reduction scheme stating the following terms was duly approved:
(i) The preference shares to be reduced to ₹ 8 per share and the equity shares to 25 paise each and to be consolidated as shares of ₹ 10 each and Re 1 each fully paid respectively. The preference shareholders waive two-thirds of dividend arrear and receive equity shares for the balance. The authorised capital to be restored to ₹ 30,000 preference shares of ₹ 10 each and 6,00,000 equity shares of Re 1 each.

(ii) The shares in Subsidiary Ltd. are sold to an outside interest for ₹1,50,000.

(iii) All intangible assets are to be eliminated and bad debts of ₹12,000 and obsolete stock of ₹30,000 to be written off.

(iv) The debentureholders to take over one of company’s properties (book value ₹54,000) at a price of ₹60,000 in part satisfaction of the debentures and to provide further cash of ₹45,000 on a floating charge. The arrears of interest are paid.

(v) The contingent liability materialised in the sum stated but the company recovered ₹15,000 of these damages in action against one of its directors. This was debited to his loan account of ₹24,000, the balance of which was paid in cash on his resignation.

(vi) The remaining directors agreed to take equity shares in satisfaction of their loans. You are required to:
(i) Give the necessary Journal Entries including cash transactions;
(ii) Set out the revised Balance Sheet after giving effect to the foregoing entries.

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I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus - Profit and Loss Account (4) Current Liabilities: (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (a) Long-term Borrowings -8% Debentures (Secured on Land and Buildings Directors' Loan TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets Balance Sheet of AB Ltd. as at 31st March, 2016 (a) Short-term Borrowings (b) Trade Payables -- Creditors (c) Other Current Liabilities ---Accrued interest on Debentures (i) Tangible Assets: (2) Current Assets: Particulars (1) TOTAL Bank Loan (Secured on Inventories) Land and Building Plant (i) Intangible Assets - Goodwill (b) Non-current investments - Shares in Subsidiary (at Cost) (a) Current Investments (b) Inventories (c) Trade Receivables ---Debtors (d) Cash and Cash Equivalents Note No. (2) (1) Amount (3) 9,00,000 (3,24,000) 1,20,000 1,65,000 75,000 2,70,000 6,000 12,12,000 2,67,000 2,55,000 1,20,000 75,000 2,25,000 2,70,000 12,12,000