Capital Structure With Hati Lurus Bhd

Hati Lurus Bhd had been approved by all parties to implement the capital reduction reserve scheme.  Below is the financial situation of the company as at 31.12.2010.

Hati Lurus Bhd Statement of Financial Position as at 31 December 2010 Non-current asset
Land and building		200,000
Fixtures		50,000
Investments		70,000
Goodwill		80,000
Current Asset
Inventory		200,000
		600,000
Authorized capital
800,000 ordinary share of RM1 each	800,000
200,000 5% preference share of RM 1 each	200,000_	1,000,000
Issued Share Capital
600,000 ordinary shares of RM1 each		600,000
100,000 5% preference shares of RM1 each		100,000
Share premium		50,000
Profit and loss account		-400,000
8% debenture		100,000
Current liabilities
Loan from directors		100,000
Bank overdraft		50,000_
		600,000

                                                                                                                                        
Additional Information:

1. Ordinary share has to be reduced to RM0.50 each and preference shares has to be reduced to RM0.75 each.
2. Preference shareholder will receive one ordinary shares of RM0.50 for RM1.00 accrued dividend ( preference dividend accrued for 1 year)
3. Asset to be revalued as follows :

                      Land and building             RM300,000

  Fixtures                               RM30,000

  Inventory                            RM90,000

4. Share premium account, profit and loss account and intangible assets have to be written off
5. The contingent liability amounting RM18,500 has been paid by company. However, companies can claim back from the insurance company of RM15,000
6. Investment is sold for RM100,000
7. The director have agreed to convert their loan to RM0.50 per share of ordinary share for every RM1.00 loan given and agreed to subscribe 80,000 units of ordinary shares at RM0.50 per share
8. A special resolution has passed to convert the authorized capital to RM2,000,000 consist of 300,000 unit preference share at RM0.75 and 1,550,000 unit ordinary share of RM0.50