Given below is the statement of financial position of Despair Bhd as at 31 December 2020....

 

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Given below is the statement of financial position of Despair Bhd as at 31 December 2020. RM'000 Ordinary shares of RM1 each Share premium Accumulated loss 8% Debentures Loans from directors Trade payables Non-current assets Furniture and fixtures (NBV) Motor vehicles (NBV) Research and development Current assets Inventories Trade receivables Prepayments 250,000 25,000 (95,000) 50,000 8,000 25,000 263,000 Furniture and fixtures Motor vehicles Inventories 95,000 60,000 45,000 35,000 15,000 13,000 263,000 The company has experienced some financial difficulty and decided to reconstruct is affairs. The company passed a special resolution and the approval of the court was obtained for the following scheme of reconstruction: 1. Each ordinary share is to be reduced by 75 sen each. The existing ordinary shareholders agreed to subscribe for a new issue on the basis of 1 to 1 at a price of 30 sen per share. 2. RM4,000,000 of directors' loan is to be cancelled. The balance is to be settled by the issue of 16,000,000 ordinary shares of 25 sen each. 3. Intangible assets and the accumulated loss are to written off. 4. The remaining assets were professionally valued and should be recorded in the accounts as follows: RM'000 80,000 52,500 25,000 5. Cost of reconstruction amounted to RM1.2 million. 6. Any capital reserve arising on the reconstruction scheme is used to issue bonus shares. You are required to prepare a) Capital reduction account b) Statement of financial position of Despair Bhd immediately after the reconstruction. [8 marks] [17marks] Given below is the statement of financial position of Despair Bhd as at 31 December 2020. RM'000 Ordinary shares of RM1 each Share premium Accumulated loss 8% Debentures Loans from directors Trade payables Non-current assets Furniture and fixtures (NBV) Motor vehicles (NBV) Research and development Current assets Inventories Trade receivables Prepayments 250,000 25,000 (95,000) 50,000 8,000 25,000 263,000 Furniture and fixtures Motor vehicles Inventories 95,000 60,000 45,000 35,000 15,000 13,000 263,000 The company has experienced some financial difficulty and decided to reconstruct is affairs. The company passed a special resolution and the approval of the court was obtained for the following scheme of reconstruction: 1. Each ordinary share is to be reduced by 75 sen each. The existing ordinary shareholders agreed to subscribe for a new issue on the basis of 1 to 1 at a price of 30 sen per share. 2. RM4,000,000 of directors' loan is to be cancelled. The balance is to be settled by the issue of 16,000,000 ordinary shares of 25 sen each. 3. Intangible assets and the accumulated loss are to written off. 4. The remaining assets were professionally valued and should be recorded in the accounts as follows: RM'000 80,000 52,500 25,000 5. Cost of reconstruction amounted to RM1.2 million. 6. Any capital reserve arising on the reconstruction scheme is used to issue bonus shares. You are required to prepare a) Capital reduction account b) Statement of financial position of Despair Bhd immediately after the reconstruction. [8 marks] [17marks]

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Dabit Despair Bhd Particulars TO Accumulated Loss ... View the full answer