Page 97 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes To Debtors A/c 1,20,000
To Reconstruction A/c 30,000
(Being reduction in mortgage debentures by transferring the stock
and debtors in full settlement of the claim of debenture-holders and
balance transferred to reconstruction account)
Plant and Machinery A/c Dr. 1,50,000
To Reconstruction A/c 1,50,000
(Being utilization of the amount of capital reduction in the
appreciation of plant and machinery)
Reconstruction A/c Dr. 10,80,000
To Goodwill A/c 45,000

To Freehold Properties A/c 3,00,000
To Profit and Loss A/c 7,35,000
(Being utilization of the balance of capital reduction account in
writing off the fictitious assets and accumulated losses)

Balance sheet of nirmala co. ltd.
as on 31 march, 2006
st
liabilities ` assets `
Share Capital: Fixed Assets:
Authorised, Issued, Subscribed Goodwill –
and paid up capital: Freehold Properties
6,000 preference shares of (` 6,00,000 – ` 3,00,000) 3,00,000
` 75 each fully paid up 4,50,000
12,000 equity shares of ` 37.5 each Plant & Machinery (9,00,000 + 1,50,000) 10,50,000
fully paid up 4,50,000
Secured Loans:
Bank overdraft 1,50,000
Current Liabilities:
Creditors 3,00,000
13,50,000 13,50,000
Illustration 8
The following was the Balance Sheet of Galgotia Industries Limited as on 31.03.2006:
liabilities ` assets `
Share Capital : Goodwill 50,000
60,000 Equity Shares of Machinery 2,54,250
` 10 each 6,00,000
Less: Calls-in-Arrear Furniture 51,375
(` 3 per share on 15,000 shares) 45,000 5,55,000
Sundry Creditors 77,125 Stock 1,02,500
Provision for Taxation 20,000 Debtors 75,000
Cash 7,500

92 lovely professional university