The following is the Balance Sheet as at 31st March 2016 of Bad Luck Ltd. The company is engaged in the manufacture and sale of electronic items. It has been felt that the depression in the industry is a thing of the past and suitable reconstruction of the company will enable it to recapture its position in the market.

It is expected that a realisation of the business will yield a new assets position will ~ 3 lakhs. As an adviser to the
company, what plan of reconstruction will you propose ? Draw up the Balance Sheet of the company after your scheme is put into effect.

Transcribed Image Text:

I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus-Profit and Loss Account (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (4) Current Liabilities: (a) Short-term Borrowings (b) Trade Payables --- Sundry Creditors TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets Balance Sheet of Bad Luck Ltd. as at 31st March, 2016 Particulars (1) (2) Current Assets: (i) Tangible Assets ---Plant and Machinery (ii) Intangible Assets -- Goodwill (a) Current Investments (b) Inventories TOTAL (c) Trade Receivables --Debtors (d) Cash and Cash Equivalents-Cash in Hand Note No. (2) (1) Amount (3) 12,00,000 (6,00,000) 3,00,000 9,00,000 3,00,000 2,50,000 2,00,000 1,00,000 50,000 9,00,000