Following is the Balance Sheet of Tourna Limited as at 31st March, 2025: Particulars Rs. Equity and Liabilities 1. Shareholders' founds A. Share…

Journal Entries in the books of Tourna Ltd. Dr. ₹ Cr. ₹ Equity Share Capital (100) A/c Dr. 16,00,000 To Share Surrender A/c 6,40,000 To Equity Share Capital (10) A/c 9,60,000 (Subdivision of 16,000 equity shares of 100each into 1,60,000 equity shares of 10each and surrender of 64,000 of such subdivided shares as per capital reduction scheme) 6% Preference Share Capital (100) A/c Dr. 8,00,000 To 12% Debentures A/c 5,60,000 To Reconstruction A/c 2,40,000 (12% Debenture issued to Preference Shareholders and 30% of the capital foregone by them) Bank A/c Dr. 4,00,000 To 12% Debenture (100) A/c 4,00,000 (Being 12% debentures issued) Bank Overdraft A/c Dr. 1,40,000 To Bank A/c 1,26,000 To Reconstruction A/c 14,000 (Being bank overdraft amount paid) 10% Debentures A/c Dr. 3,20,000 Interest payable A/c Dr. 32,000 To Debenture holders A/c 3,52,000 (Being Interest payable on the 10% debentures credited to debenture holders A/c) Debentureholder A/c Dr. 3,52,000 To furniture & fixtures A/c 2,80,000 To Reconstruction A/c 72,000 Alternative combined entry: 10% Debentures A/c Dr. 3,20,000 Interest payable A/c Dr. 32,000 To furniture & fixtures A/c 2,80,000 To Reconstruction A/c 72,000 (Settlement of debenture holders by allotment of Furniture & Fixtures) Trade payables A/c Dr. 1,15,000 To Reconstruction A/c 1,15,000 (Transferred claims of the trade payables to reconstruction account, 30% of which is being clear reduction and equity shares are being issues in consideration of the balance) Share Surrender A/c Dr. 6,40,000 To Equity Share Capital (10) A/c 80,500 To Reconstruction A/c 5,59,500 (Issued equity shares to discharge the claims of the trade payables respectively as a per scheme and the balance in share surrender account is being transferred to reconstruction account) Provision for Taxation A/c Dr. 42,000 Reconstruction A/c Dr. 8,000 To Bank A/c 50,000 (Being taxation liability settled) Alternative Separate entry: Provision for Taxation A/c Dr. 42,000 Reconstruction A/c Dr. 8,000 To Liability for taxation A/c 50,000 (Being conversion of the provision for taxation into liability for taxation.) Liability for taxation A/c Dr. 50,000 To Cash/Bank A/c 50,000 (Being taxation liability settled) Reconstruction A/c Dr. 70,000 To Investment A/c 70,000 (Being investments' value reduce to market price) Inventory A/c Dr. 32,000 To Reconstruction A/c 10,400 To Provision for doubtful debts (4,32,000 x 5%) 21,600 (Being inventory revalued and provision for doubtful debts created) Reconstruction A/c Dr. 9,32,900 To Profit and Loss A/c 9,10,000 To Capital Reserve A/c 22,900 (Adjusted debit balance of profit and loss account against the reconstruction account and the balance in the latter is being transferred to capital reserve) Alternative combined entry: Inventory A/c Dr. 32,000 Reconstruction A/c Dr. 9,92,500 To Investment A/c 70,000 To Provision for doubtful debts (4,32,000 x 5%) 21,600 To Profit and Loss A/c 9,10,000 To Capital Reserve A/c 22,900 (Being inventory revalued and provision for doubtful debts created, investments' value reduce to market price, Adjusted debit balance of profit and loss account against the reconstruction account and the balance in the latter is being transferred to capital reserve) Reconstruction Account Particulars ₹ ₹ To Provision for taxation 8,000 By Preference share capital A/c 2,40,000 To Investments A/c 70,000 By Bank Overdraft A/c 14,000 To Provision for doubt full debt 21,600 By 10% Debenture holders A/c 72,000 To Profit and loss A/c 9,10,000 By Trade payables A/c 1,15,000 To Capital reserve A/c 22,900 By Share Surrender A/c 5,59,500 By Inventory 32,000 10,32,500 10,32,500 Balance Sheet of Tourna Limited (and reduced) as at... Particulars Note No. ₹ I. Equity and Liabilities (1) Shareholder's Funds (a) Share Capital 1 10,40,500 (b) Reserves and Surplus 2 22,900 (2) Non-Current Liabilities (a) Long-term borrowings 3 9,60,000 (3) Current Liabilities Total 20,23,400 II. Assets (1) Non-current assets (a) Property, plant and equipment 4 5,00,000 (b) Intangible assets 5 1,70,000 (c) Non-current investments 6 1,10,000 (2) Current assets (a) Inventories 7 5,44,000 (b) Trade receivables 8 4,10,400 (c) Cash and cash equivalents (W.N) 2,89,000 Total 20,23,400 Notes to Accounts 1. Share Capital ₹ Equity Share Capital Issued Capital: 1,04,500 Equity Shares of 10each (9,60,000+80,500) 10,40,500 (Of the above shares all are allotted as fully paid up pursuant to capital reduction scheme by conversion of equity shares without payment being received in cash) 2. Reserve and Surplus Capital Reserve 22,900 3. Long-term borrowings Unsecured Loans 12% Debentures (5,60,000 + 4,00,000) 9,60,000 4. Property, plant and Equipment Plant & Machinery 5,00,000 5. Intangible assets Patents & copyrights 1,70,000 6. Non-Current Investments Investments (1,80,000 – 80,000) 1,10,000 7. Inventory Add: Appreciation under scheme of Reconstruction 5,12,000 32,000 5,44,000 8. Trade Receivables Less: Provision for doubtful debts 4,32,000 21,600 4,10,400 Cash & Bank A/c Particulars ₹ ₹ To Opening balance 65,000 By Bank Overdraft A/c 1,26,000 To 12% Debenture A/c 4,00,000 By Liability for taxation 50,000 By Closing balance 2,89,000 4,65,000 4,65,000