The following is the balance sheet of Jyothi Ltd. as at 31 March 2010:
Pref. Shares of
Shares ofRs. 10
Subscribed & Paid up:
Investments Current Assets, Loans &
Pref. Shares of
Cash & Bank
Shares of 10
the Extent Not
Profit & Loss A/c
& Provisions: (C)
Total (A+ B+ C)
For the year ended 31 March 2011, the Company made a net profit of Rs.30,000 after providing Rs.40,000 depreciation and writing off the miscellaneous expenditure amounting to Rs.40,000.
The following additional information is available with regard to Company’s operation:
(The preference dividend for the year ended 31 March 2011 was paid before 31 March 2011.
Except cash and bank balances, other current assets and current liabilities as on 31 March 2011was the same as on 31 March 2010.
The Company redeemed the preference shares at a premium of 10%.
The Company issued bonus shares in the ratio of one share for every five equity shares held as on 31 March 2011.
To meet the requirements of redemption, the Company sold a portion of the investments, so as to leave a minimum balance of Rs.60,000 after such redemption.
Investments were sold at 90% of cost on 31 March 2011.
You are required to:
Prepare necessary journal entries to record redemption and issue of bonus shares
Prepare the cash and bank account
Prepare the balance sheet as at 31 March 2011 incorporating the above transactions.
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