On 30th September, 2015, the accountant of SOLO (Nig.) Ltd., prepared the following summary representing the...

 

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On 30th September, 2015, the accountant of SOLO (Nig.) Ltd., prepared the following summary representing the financial statement of the company: SOLO (Nig.) Ltd. Summarised Statement of financial position as at 30th September, 2015 N Capital (Authorised, Issued and paid up): 60,000 Ord. shares at N1 each 60,000 Current Liabilities 20,000 80,000 In order to relieve the financial stringency disclosed, the following scheme was agreed to and all the consequent legal technicalities were properly completed on 1" October, 2015. (a) (b) (f) Joriy to wolkig (c) (d) (e) Goodwill non-current Assets Current Assets Profit or Loss N 16,000 30,000 12,000 22,000 80,000 The goodwill was revalued at N12,000. The value of the non current assets was certified by licensed valuers a N24,000. The Profit or Loss balance was eliminated. The ordinary shareholders were each given the option of subscribing in respect of each ten shares held either: (i) (ii) Ten preference shares of N1; issued as 75k paid, against a cash payment of 90k, per preference share. These shares were to carry a cumulative dividend of 6% per annum. Or. One debenture bond of N10 at par, all bonds ranking pari passu as a specific charge on the company's fixed assets and carrying 5% per annum interest. The company reserved the right to refuse this option if more than 2,000 bonds were applied for. Ordinary shareholders holding 20,000 shares, accepted option: and those holding 18,000 shares accepted option and all money due was paid. The remaining shareholders refused both option. The nominal capital of the company was increased by N20,000 so as to cover the new preference issue. Each ordinary share was reduced so as to rank as a N1 share, 40k paid up. Any available balance arising out of the capital reduction was to be carried to capital reserve. (i) (ii) Required: Produce, from the information given above, the statement of financial position of SOLO (Nig) Ltd. immediately after the arrangements were completed. On 30th September, 2015, the accountant of SOLO (Nig.) Ltd., prepared the following summary representing the financial statement of the company: SOLO (Nig.) Ltd. Summarised Statement of financial position as at 30th September, 2015 N Capital (Authorised, Issued and paid up): 60,000 Ord. shares at N1 each 60,000 Current Liabilities 20,000 80,000 In order to relieve the financial stringency disclosed, the following scheme was agreed to and all the consequent legal technicalities were properly completed on 1" October, 2015. (a) (b) (f) Joriy to wolkig (c) (d) (e) Goodwill non-current Assets Current Assets Profit or Loss N 16,000 30,000 12,000 22,000 80,000 The goodwill was revalued at N12,000. The value of the non current assets was certified by licensed valuers a N24,000. The Profit or Loss balance was eliminated. The ordinary shareholders were each given the option of subscribing in respect of each ten shares held either: (i) (ii) Ten preference shares of N1; issued as 75k paid, against a cash payment of 90k, per preference share. These shares were to carry a cumulative dividend of 6% per annum. Or. One debenture bond of N10 at par, all bonds ranking pari passu as a specific charge on the company's fixed assets and carrying 5% per annum interest. The company reserved the right to refuse this option if more than 2,000 bonds were applied for. Ordinary shareholders holding 20,000 shares, accepted option: and those holding 18,000 shares accepted option and all money due was paid. The remaining shareholders refused both option. The nominal capital of the company was increased by N20,000 so as to cover the new preference issue. Each ordinary share was reduced so as to rank as a N1 share, 40k paid up. Any available balance arising out of the capital reduction was to be carried to capital reserve. (i) (ii) Required: Produce, from the information given above, the statement of financial position of SOLO (Nig) Ltd. immediately after the arrangements were completed.

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