Question

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

Liabilities	Rs.	Assets	Rs
Share Capital :		Goodwill	30,000
5,000 Equity Shares of Rs 20 each fully paid .	1,00,000	Building	40,000
3,000 6% Cumulative		Machinery	65,000
Preference Shares of Rs 20 each fully paid	60,000	Stock	25,000
Debentures	40,000	Debtors	15,000
Creditors	10,000	Cash	5,000
		Preliminary Expenses	3,000
		Profit and Loss a/c	27,000
	2,10,000		2,10,000

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.

Answer 1

Books of Unlucky Ltd
Realisation A/c

Particulars	Rs	Particulars	Rs
To Sundry Assets	1,80,000	By Creditors	10,000
		By Lucky Ltd. A/c	1,50,000
		By Equity Shareholders	20,000
		A/c (Loss)
	1,80,000		1,80,000

Lucky Ltd. A/c

Particulars	Rs	Particulars	Rs
To Realisation A/c	1,50,000	By Equity Shares A/c	1,50,000
	1,50,000		1,50,000

Preference Shareholders A/c

Particulars	Rs.	Particulars	Rs
To Equity Shares in Lucky Ltd.	60,000	By Preference Share Capital A/c	60,000
	60,000		60,000

Debentureholders A/c

Particulars	Rs	Particulars	Rs
To Equity Shares in Lucky Ltd.	40,000	By Debentures A/c	40,000
	40,000		40,000

Equity Shareholders A/c

Particulars	Rs	Particulars	Rs
To Preliminary Expenses	3,000	By Equity Share Capital	1,00,000
To Profit and Loss A/c	27,000
To Realisation (Loss)	20,000
To Equity Shares in Lucky Ltd.	50,000
	1,00,000		1,00,000

Books of Lucky Ltd.
Journal

No	Particulars	Lf	Debit Rs	Credit Rs
1	Goodwill Ale (Balancing Figure)                          Dr.		15.000
	Building A/c                  Dr.		40,000
	Machinery A/c              Dr.		60,000
	Stock A/c                      Dr.		25,000
	Debtors A/c                  Dr.		15,000
	Cash A/c                      Dr.		5,000
	To Creditors A/c			10,000
	To Liquidators of Unlucky Ltd.			1,50,000
	(Being assets and liabilities are taken over from Unlucky Ltd.)
2.	Liquidators of Unlucky Ltd A/c		1,50,000
	To Equity Share Capital A/c			1,50,000
	(Being issued 22,000 equlty shares of Rs .10 eaqh as to Rs.5 per share paid up  and 4,000 equity shares of Rs 10 each as fully paid in ettlement of purchase price) (22,000 x 5 + 4,000 x 10)
3.	Bank A/c                       Dr.		40,000
	To Equity Share Applications and Allotment A/c			40,000
	(Being received application and allotment money at Rs.10 per share on 4,000 shares)
4.	Equity Share Application and Allotment A/c                Dr.		40,000
	To Equity Share Capital			40,000
	(Being transfer of application and allotment money to Share Capital A/c )