External Reconstruction:
On April, the Balance sheet of Lakshmi Ltd was as under:
A scheme of reconstruction was as under: i A new company called Sri Lakshmi Ltd to be formed with an
authorized capital of Rs all in equity shares of Rs each. ii One equity share of Rs each fully
paid in the new company to be issued in exchange of three preference shares in the new company. iii One equity
share of Rs each fully paid in the new company to be exchanged for four equity shares in the old company.
iv Debenture holders to receive equity shares in the new company as fully paid. v Creditors to be taken
over by the new company and immediately paid off. vi The new company to issue remaining equity shares for
public subscription. vii The new company to take over old company's assets subject to revaluation of sundry
assets at Rs
Prepare necessary ledger accounts in the books of Lakshmi Ltd and open the books of the new company by means
of journal entries, assuming that the public subscription was fully subscribed & prepare Balance sheet.
