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(a) The Balance Sheet of AB Ltd. as on March 31, 2022 is as under: I. Equity and Liabilities: 1. Shareholders' Funds: (a) Share Capital: 16000 Equity Shares of Rs.100 each fully paid: Rs.16,00,000; (b) Reserves and Surplus: (-) Rs.21,40,000. 2. Non-Current Liabilities: 8% Debentures: Rs.28,00,000; Accrued Interest: Rs.1,40,000. 3. Current Liabilities: Sundry Creditors: Rs.9,00,000; Income Tax Liability: Rs.20,000; Total: Rs.33,20,000. II. Assets: 1. Non-Current Assets: Land, Building and Machinery: Rs.28,00,000. 2. Current Assets: Stock: Rs.2,00,000; Sundry Debtors: Rs.80,000; Investments: Rs.30,000; Cash at Bank: Rs.2,06,000; Cash in Hand: Rs.4,000; Total: Rs.33,20,000. The fixed assets are heavily overvalued. A scheme of reorganization was prepared and passed. The salient points of the scheme are the following: (i) Each share shall be sub-divided into ten fully paid Equity Shares of Rs.10 each. (ii) After such sub-division, each shareholder shall surrender to the company 90% of his holding, for the purpose of re-issue to debenture holders and creditors so far as required and otherwise for cancellation. (iii) Of those surrendered, 100000 Equity Shares of Rs.10 each shall be converted into 8% Preference Shares of Rs.10 each fully paid for debenture holders. (iv) The debenture holders' total claim shall be reduced to Rs.10,00,000. This will be satisfied by the issue of 100000 Preference Shares of Rs.10 each fully paid. (v) The claim of sundry creditors shall be reduced by 80% and the balance shall be satisfied by allotting them Equity Shares of Rs.10 each fully paid from the shares surrendered. (vi) Shares surrendered and not re-issued shall be cancelled. Assuming that the scheme is duly approved by all parties interested and by the Court, draft necessary Journal Entries and Balance Sheet of the company after the scheme has been carried into effect.