4. Gagandeep Ltd., had been suffering heavy losses in the past. It now decides to reconstruct and its Balance Sheet is as follows. Balance Sheet as on 31st December 2020. Share Capital: Authorized: 20,000 equity shares of 100 each Goodwill 3,00,000 Fixed assets 15,85,000 Stock 95,000 20,00,000 Sundry Debtors 50,000 5000 6% pref. shares of 2100 each Investments 20,000 5,00,000 Cash at Bank 12,000 2500000 Preliminary expenses 5,000 Issued subscribed and Paid up Discount on issue of shares 3,000 10,000 equity shares of 100 Profit and loss account 12,90,000 each 10,00,000 2000 6% prof. shares of 100 each (Dividend in arrears for 5 2,00,000 years) 5% Debentures of 100 each 16,60,000 Sundry creditors 4,80,000 Liabilities for IT amin 20,000 33,60,000 33,60,000 The following scheme of reconstruction was agreed upon and duly confirmed by the court. a) The equity shares shall be reduced to shares of *10 each, *5 per share paid up. b) The debenture holders agreed to have 60% of their claims which shall be discharged by the issue of 7.5% debentures of 100 each. c) The sundry creditors are required to forego 60% of their claims. d) The assets to be re-valued as follows: Fixed assets 12,00,000, stock in trade 70,000, sundry debtors 40,000 and investment 10,000. Show the Journal entries and the Balance Sheet after reconstruction. 11.SI Co Ltd os of 31 12 2020

Hh1.

Calculate: -cost of common equity from retained earnings, using the CAPM method. - cost of new common stock based on the CAPM

The management of Kosoko traders wants to establish theamount of financial needs for the next two years.Thebalance sheet of the firm as at 31stDecember 2016 is asfollows:Shs.‘000’Net fixed assets 124,800Stock 38,400Debtors 28,800Cash 7,200TotalAssets 199,200Financedby:Ordinary share capital 84,000Retained earnings 35,20012%long-term debt 20,000Trade creditors 36,000Accrued expenses 24,000TOTAL 199,200For the year ended 31st December,2016sales amounted to sh.240,000,000.The firm projects that the sales will increase by15%in 2017and 20% in 2018.After tax profit on sales has been 11% but the management ispessimistic about future operating costs and use anafter-tax profit on sales rate of 8%per annum by 2018.The firmintends to maintain it's dividend pay out ratio 80%.Assets areexpected to vary with sales,while trade creditors and accruedexpenses form the spontaneous sources of financing.Any external financing will be effected through the use of commercial paper.calculate amount of external…