(a) The Preference shareholders agree that their shares be reduced to a fully paid share of ? 90 each. They will accept Equity Shares of ? 4 each fully paid for half of their arrear dividends and rest half will be forgone. (b) The Equity shareholders agree that their shares be reduced to fully paid shares of \( ? 4 \) each and further subscribe 40,000 Equity Shares of ? 4 each fully paid for working capital purposes. (c) The Debenture holders have agreed to accept fully paid Equity Shares for the interest due to them. (d) Investments are to be sold for ? 90,000 and money thus available along with new issues be utilized to pay off Bank Overdraft. Show the necessary Journal Entries to record the scheme of capital reduction and draw up a new Balance Sheet after the scheme after taking into accounts: (i) Plant and Machinery be depreciated by \( 10 \% \); (ii) obsolete stock of \( ? 30,000 \) be written off. [C.U. B.Com. 2014(H)]
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