External Reconstruction

State whether the fol/owing statements are True or False:
External reconstruction involves one liquidation and no new  formation of a company.

The B.alance Sheet of D Ltd is as follows :

Balance Sheet as·on 31-12-2017

 Terms of Reconstruction :
(1) 1 share of Rs. 10 fully paid in the New Company to be. issued for every three equity shares in old company.

(2) 3 shares of Rs.10 fully paid 'in the New ·company to be issued for every five preference shares in the old company.

(3) Debentureholders to be paid by new Co. called X Ltd. in full.
(4) The creditors to receive 80 %  of the sums due to them in fully paid shares of 10 each in full settlement in new company.

(5) Patents and Profit and Loss Ne to be written-off.

(6) Arrears of preference dividend to be cleared  by issuing one Rs.10 fully paid equity share in 'X Ltd.' for every twenty shares held.

(7) Any balance available is used for writing down the building.
Pass Journal Entries ofD Ltd. and Balance Sheet or X Ltd. as on 31-12-2017.

The following was the Balance Sheet of Poonam Ltd. as on 31-3-2018 

Balance Sheet as on 31-3-2018

The scheme of reconstruction was agreed as follows :
(a) A new company to be formed "Sonam Ltd with an authorised capital of Rs. 6,00,000 all in equity shares of Rs.10 each.
(b) Two equity shares of Rs. 5 'paid-up in the new company issued for every one equity share in the old company.
(c) Four equity shares of rS. 5 paid-up in the. new company to be issued· for every Preference share in the old company.
( d) Debentureholders to be allotted  8,000 equity shares as fully paid-up in the new company.

(e) Sundry creditors to .be taken over by new company.·
(f) The remaining equity shares to be issued to the public and duly collected in full. 
(g) The Assets of the, old company to be taken over subject writing down the value of machinery. by f 10,000.
Show the necessary ledger accounts in the b.ooks of the old company.

Fill in the blanks 

Pc- Net Asset =_________________

The following was the Balance Sheet of Unlucky Ltd. as on.31-3-2018.

Note : years of Cumulative Preference Shares dividend of Rs 6,000.
The scheme of reconstruction as agreed upon by all the parties was as follows :
(1) A new company to be formed called 'Lucky Ltd.' with. an authorised capital of  Rs 3,00,000 all in. equity shares of Rs. 10 each.

(2) Two  equity shares as Rs. 5 paid-up in the new company to be issued for every one equity share in the old company.

(3) Four equity shares as Rs. 5 paid-up in the new company to be issued for every preference share in the old company.

( 4) Debentureholders to  be allotted 4,000 Equity shares as fully paid up in the new company.

(5) Arrears of preference dividend to be cancelled.
(6) Creditors to be taken over by the new company.

(7) The remaining equity shares to be issued to the public and duly collected in full. 
(8) The assets of the old company to be taken over subject to writing down the value of machinery by Rs 5,000.

Show the necessary accounts in the books of Old Company and the opening  entries in the books of New Company.

On 1st July, 2017 the balance sheet of Amrit Limited was as under:

Preference dividends. were in arrears for two years. A scheme of  reconstruction agreed upon was as under :

(1) A.new· company to be formed, called AmritLiinited with an authorised capital of Rs.5,00,000  an in equity shares of Rs. 100 each.
(2) One equity shar.e of Rs.100 each fully paid in ·the new company to be issued in exchange of 3 preference shares in the old company. 
(3) One equity share of Rs. 100 each fully paid in the new company to be exchanged for 4 equity shares In the old company.
(4) Arrears of preference dividend to be cancelled.
(5) Debentureholders to receive 50 equity shares in the new company as fully paid.
(6) Creditors to be taken over by the new company and immediately paid-off 
(7) The new company to issue remaining equity shares. for public subscription.
(8) The new company to take over old companis assets,subject to revaluation of  'Sundry Assets' at Rs. 2,65,000.
Prepare the  necessary ledger account in the books of Amrit Limited  and open the books of the new company by means of journal entries, assuming that the public subscription was fully responded.

Balance Sheet of K.G.Ltd. as on 31-12-2017

It is decided to reconstruct the company and for this purpose the following scheme was duly approved.

(1) A new company under the name 'Krishna Ltd.' is to be formed  with  an authorized capital of Rs. 1,00,00,000 in shares of Rs.10 each to take over the business.
(2) Ten fully paid shares in the new company ate to be issued for every six ordinary shares in the old company.
(3) Fifteen fully paid shares in new company are to be issued for every five preference shares in old company.
(4) Debentures are to be paid-off by the new company at a premium of 10%.

(5) Creditors are  to receive 80% of their claim in fully paid shares in the new company in full settlement.
(6) The arrears  of preference hare dividends are to ~e discharged by the issue of three fully paid shares in the new company' for each Preference shares in the old company.
(7) The liquidation expenses of the old company amoμnting to Rs. 5,000 are to be paid by the new company. 
(8) The Authorized and Issued Share Capital of the ·company consist of 50,000 .6%  Preference Shares of Rs100 each fully:-paid, and 60,000 Ordinary Shares of  Rs 100 each fully paid. The dividend on cumulative Preference· Shares has been in arrears for several years.
Close the books of K.G. Ltd

Following was the Balance sheet of DT Ltd. as on 30th June, 2018 :

Note : Preference dividend was in arrears RS.40,000.
The following Scheme of reconstruction is duly sanctioned :
1. A new company TD Ltd .is formed With Rs .15,00,000 as authorised share capital divided into 1,50,000 equity shares of Rs. 10 each.
2. The company will acquire DT Ltd. on the following conditions : 
(i) Old companies debentures will be paid by similar debentures in the new company. For arrears of interest, equivalent amount of·equity shares will be issued .
(ii) The cr~ditors ·wlll be paid fof. every Rs 100 for their claim, Rs .16 in cash and 10 equity shares equivalent in the new company.
(iii) Preference shareholders are pfild 10 equity shares in the new company for  each shares held.by them in the old company. They will not press-for their dividend arrears.
(iv) Equity shareholders will be given ten equity shares in the new company. for three shares held in the old company.
(v) Expenses. of Rs. 20,000 will be borne. by the new company, as a part of purchase consideration..
3. The riew company will take the current assets at their book value except stock which will be reduced by Rs.15,000. Intangible assets are not to appear in the new Balance Sheet, appropriate adjustment being made in the values of fixed assets ..
4. Remaining equity shares in the new company are issued to the public and are fully paid.
You are required to prepare:
1. In the books ·of DT Ltd :
(i) Realisation Account
(ii) DT Equity Sharehoiders Account.
2. In the books of TD Ltd. 
(i) Journal Entries .
(ii) Balance Sheet.
Under Purchase Method.