$ $
INTANGIBLE FIXED ASSETS –GOODWILL 431,250
TANGIBLE FIXED ASSETS 5,606,250 6,037,500
CURRENT ASSETS
STOCK 276,000
DEBTORS 690,000
BANK 51,750
1,017,750
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (362,250)
655,550
669,3000
SHARE CAPITAL AND RESERVES
ORDINARY SHARES OF $1.00 8,625,000
PROFIT AND LOSS ACCOUNT (1,932,000)
6,693,000
Additional notes
Over the past years Surinam plc traded at a loss and no dividends have been paid to the shareholders during the period.
The directors are now of the opinion that the goodwill is now valueless. The tangible fixed assets are overvalued by $1,293,750. Some stock which costs $86,250 now has no value. Included in debtors is an amount of $138,000 from a customer who has now become insolvent.
The directors are confident that, as a result, of improved efficiency and the introduction of new products, the company can look forward to annual net profits of $431,250. They have proposed to the shareholders a capital reduction scheme whereby each shareholder will receive one ordinary share with a nominal value of $0.55 for every $1.00 share currently held. This will enable the debit balance on the profit and loss account to e eliminated and adjustments to be made to the company's assets to take account of the matters mentioned above.
The creditors agreed to take a 10% write off the amount owing to them if the company agreed to pay them immediately, 20% of the balance owed to them after the write off the 10%. To do this the directors agreed to an immediately rights issue of 140000 of the new ordinary shares at par. The shares are issued on May 1 2010.
The director's policy in future will be able to pay dividends which will be covered twice by earnings.
The shareholders have agreed to the director's proposals and the capital reduction was effected on 1 may 2010.
REGUIRED:
Prepare the necessary journal entries for the capital reduction scheme.
Prepare the balance sheet as it will appear immediately after the capital reduction scheme(each figure must be identified)

$ $
INTANGIBLE FIXED ASSETS –GOODWILL 431,250
TANGIBLE FIXED ASSETS 5,606,250 6,037,500
CURRENT ASSETS
STOCK 276,000
DEBTORS 690,000
BANK 51,750
1,017,750
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (362,250)
655,550
669,3000
SHARE CAPITAL AND RESERVES
ORDINARY SHARES OF $1.00 8,625,000
PROFIT AND LOSS ACCOUNT (1,932,000)
6,693,000
Additional notes
Over the past years Surinam plc traded at a loss and no dividends have been paid to the shareholders during the period.
The directors are now of the opinion that the goodwill is now valueless. The tangible fixed assets are overvalued by $1,293,750. Some stock which costs $86,250 now has no value. Included in debtors is an amount of $138,000 from a customer who has now become insolvent.
The directors are confident that, as a result, of improved efficiency and the introduction of new products, the company can look forward to annual net profits of $431,250. They have proposed to the shareholders a capital reduction scheme whereby each shareholder will receive one ordinary share with a nominal value of $0.55 for every $1.00 share currently held. This will enable the debit balance on the profit and loss account to e eliminated and adjustments to be made to the company's assets to take account of the matters mentioned above.
The creditors agreed to take a 10% write off the amount owing to them if the company agreed to pay them immediately, 20% of the balance owed to them after the write off the 10%. To do this the directors agreed to an immediately rights issue of 140000 of the new ordinary shares at par. The shares are issued on May 1 2010.
The director's policy in future will be able to pay dividends which will be covered twice by earnings.
The shareholders have agreed To the director's proposals and the capital reduction was effected on 1 may 2010.
REQUIRED:
Prepare the necessary journal entries for the capital reduction scheme.
Prepare the balance sheet as it will appear immediately after the capital reduction scheme(each figure must be identified)

$ $
INTANGIBLE FIXED ASSETS –GOODWILL 431,250
TANGIBLE FIXED ASSETS 5,606,250 TOTAL 6,037,500
CURRENT ASSETS
STOCK 276,000
DEBTORS 690,000
BANK 51,750
TOTAL 1,017,750
CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR (362,250)
TOTal 655,550
TOTAL 669,3000
SHARE CAPITAL AND RESERVES
ORDINARY SHARES OF $1.00 8,625,000
PROFIT AND LOSS ACCOUNT (1,932,000)
TOTAL 6,693,000
Additional notes
Over the past years Surinam plc traded at a loss and no dividends have been paid to the shareholders during the period.
The directors are now of the opinion that the goodwill is now valueless. The tangible fixed assets are overvalued by $1,293,750. Some stock which costs $86,250 now has no value. Included in debtors is an amount of $138,000 from a customer who has now become insolvent.
The directors are confident that, as a result, of improved efficiency and the introduction of new products, the company can look forward to annual net profits of $431,250. They have proposed to the shareholders a capital reduction scheme whereby each shareholder will receive one ordinary share with a nominal value of $0.55 for every $1.00 share currently held. This will enable the debit balance on the profit and loss account to e eliminated and adjustments to be made to the company's assets to take account of the matters mentioned above.
The creditors agreed to take a 10% write off the amount owing to them if the company agreed to pay them immediately, 20% of the balance owed to them after the write off the 10%. To do this the directors agreed to an immediately rights issue of 140000 of the new ordinary shares at par. The shares are issued on May 1 2010.
The director's policy in future will be able to pay dividends which will be covered twice by earnings.
The shareholders have agreed to the director's proposals and the capital reduction was effected on 1 may 2010.
REGUIRED:
Prepare the necessary journal entries for the capital reduction scheme.
Prepare the balance sheet as it will appear immediately after the capital reduction scheme(each figure must be identified)

Did you do your journal entries? You need to do this first, or at least attempt to do this.

Rites began the year with 90000 in the debtors account and ended the year with 62000 in the debtors account. If credit sales for the year were 1300000, how much will the cash collected from customers during the year amounted to?

Rest ltd sold machinery with a cost of $400000 and provision for depreciation of $160000 for an amount that resulted in a loss of $60000. What amount should rest ltd report on the statement of cash flows as "proceeds from the sale of machinery?"

the business of town ring, a sole trader is acquired by a Tacoma ltd.the net assets of the business are valued at $167000 but the purchase price of the business is agreed at $137000.Tacoma ltd will pay $50000 in cash and issue $60000 shares of $1. what is the premium per share?

How should the revaluation of a fixed asset be treated in a cash flow statement?

a company issued ordinary shares at a their nominal value and received payment in full.what should be the effect of this on the company financial?what is increased and decreased?

a company issued ordinary shares at a their nominal value and received payment in full.what should be the effect of this on the company financial?what is increased and decreased?

Cash and Owners equity will be increased. There will also be increased ownership in the company, which will decrease control of the management of the company.

This is a duplicate post.

Beginning Balance + credit sales -ending balance = cash collected.

What will happen to the ordinary share capital figure shown in the balance sheet.. will it increase or decrease?

on January 1st,tilly ltd has authorized 500000 ordinary shares of $10 par value.on February 1,2010 1,200000 shares are issued at $18 per share.on October 31, 10 000 shares of the ordinary shares are purchased from shareholders at a price of $25 per share. What will the be the balance in ordinary shares on October 31?

A company may earn a profit during an accounting period but have less money in the bank at the end of the period than it had at the beginning. Which of the following on its own could explain this?

A)an increase in the depreciation charge relative to the previous accounting period
B)an increase in trade debtors over the course of the period.
C)the sale of fixed assets during the period.
D) not paying invoices received from creditors

Taytan association ltd made sales of $690000 and had cost of goods sold of $390000. Stock decreased by $15000 and creditors decreased by $9000.operating expenses were $175000. How much was Taytan net profit for the year?

In a private company a permissible capital payment can be made redeem or purchase its own shares when...

A)it has insufficient distributable profits for the purpose
B)it can raise the amount from a new issue
C)it is not legally authorized to redeem them
D) all of the above

A company purchase a business with net tangible assets of $180000. The purchasing company reevaluated the net tangible assets at $132000. The company completes the transaction by a cash payment of $24000 and an issue of its $0.50 ordinary shares, fully paid at $1.30 each
By how much will the company ordinary share capital account balance increase?

A company purchase a business with net tangible assets of $180000. The purchasing company reevaluated the net tangible assets at $132000. The company completes the transaction by a cash payment of $24000 and an issue of its $0.50 ordinary shares, fully paid at $1.30 each

1)by how much will the company ordinary share capital account balance increase?
2)what will be the effect of this transaction on the bank account of the purchasing company?