The following is the balance sheet of Weak Ltd., on 31-3-2003 Liabilities Rs. Assets Rs. 40,000...

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The following is the balance sheet of Weak Ltd., on 31-3-2003 Liabilities Rs. Assets Rs. 40,000 20,000 Equity shares of Rs.10 each 2,00,000 Patents 500 10% Pref. Shares of Rs.100 each 50,000 Buildings 8% Debentures 2,00,000 1,00,000 Machinery 1,30,000 3,30,000 Stock 80,000 20,000 Debtors Creditors Outstanding expenses 7,00,000 55,000 Profit & loss A/c 1,95,000 7,00,000 With a view to reconstruct the company, it is proposed: (1) To reduce Equity share paid up amount by Rs.9 each. (ii) To reduce 20% 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. The following is the balance sheet of Weak Ltd., on 31-3-2003 Liabilities Rs. Assets Rs. 40,000 20,000 Equity shares of Rs.10 each 2,00,000 Patents 500 10% Pref. Shares of Rs.100 each 50,000 Buildings 8% Debentures 2,00,000 1,00,000 Machinery 1,30,000 3,30,000 Stock 80,000 20,000 Debtors Creditors Outstanding expenses 7,00,000 55,000 Profit & loss A/c 1,95,000 7,00,000 With a view to reconstruct the company, it is proposed: (1) To reduce Equity share paid up amount by Rs.9 each. (ii) To reduce 20% 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.

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Journal Entries for reconstruction of Balance Sheet J No Particulars Debit Credit ... View the full answer