Dear Friends Please solve my query.. Balance sheet of Abc Pvt. Ltd. As on 31.03.9 Share Capital 47 Lac (4,70,000 of F.V. 10/-) Fixed Assets - 125 Lac Reserve & Surplus – 78 Lac Current Assets Unsecured Loan Mr. X ( Director ) 125 Lac Closing stock - 175 Lac Mr. Y ( Director ) 125 Lac Sundry Debtors – 800 Lac Current Liability Cash & Bank Balance – 90 Lac Sundry creditors 900 Lac Loans & Advances - 40 Lac Expenses Payable 80 Lac Misc. Assets Preliminery Expenditure – 125 Lac ------------------------- --------------------- 1355 Lac 1355 Lac PAT – 45 Lac E.P.S Reported By company – 9.57 PBIT – 65 Lac Book Value - 26.60 Debt – Equity Ration – 2:1 Now Our Directors want to improve co. debt equity ration by converting loan into shares. For that company has passes resolution in EGM to increase authorised share capital Currently co. authorised share capital is 5,00,000 equity shares of f.v. 10/- Now co. want to issue 1 Lac shares to directors of f.v. 10/- by capitalizing reserve & surplus a/c For that purposed I passed following journal entry please let me know I m right or wrong. Mr. X ( Loan A/c ) Dr. 20,00,000.00 Mr. Y ( Loan A/c ) Dr. 20,00,000.00 Security Premium 30,00,000.00 Mr. X 5,00,000.00 Mr. Y 5,00,000.00 Company issued shares on premium of40/- and i open here separate account for director loan and capital contribution. After This Company Financial Position Will Improve in f.y. 11 Company Report PAT 75 Lac , PBIT 95 Lac Share Capital 57 Lac (5,70,000 of F.V. 10/-) Fixed Assets - 125 Lac Reserve & Surplus – 133 Lac Security Premium – 30 Lac Current Assets Unsecured Loan Mr. X ( Director ) 105 Lac Closing stock - 175 Lac Mr. Y ( Director ) 105 Lac Sundry Debtors – 800 Lac Current Liability Cash & Bank Balance – 155 Lac Sundry creditors 900 Lac Loans & Advances - 70 Lac Expenses Payable 80 Lac Misc. Assets Preliminery Expenditure – 85 Lac ------------------------- --------------------- 1410 Lac 1410 Lac E.P.S –15.96 Book Value – Rs. 38.60 Debt – Equity ration – .95:1
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