QUESTION

X ltd. is absorbed by Y Ltd. on the following terms and conditions : a) The assets of X Ltd. are valued at ` 80,000. b) The liabilities of X Ltd. are valued at ` 30,000. c) ` 10,000 cash is paid to the shareholders of X Ltd. d) The balance of purchase consideration is discharged by issue of shares of ` 10 each at ` 20 per share. (Ans : ` 50,000)

QUESTION

` 6,12,000

QUESTION

` 10,00,000

QUESTION
Balance Sheet of A Ltd.
Liabilities 50,000 Equity Shares of ` 10 each fully paid Securities Premium General Reserve Capital reserve Dividend Equalisation Fund 9% Debentures Trade Creditors Employees Profits Sharing Fund Provident Fund ` 500,000 50,000 60,000 10,000 30,000 200,000 80,000 25,000 40,000 995,000 Assets Plant & Machinery Computers Motor Van Stock Debtors Cash at bank Preliminary expenses ` 375,000 125,000 85,000 215,000 150,000 25,000 20,000

995,000

Balance Sheet of B Ltd.

Liabilities 30,000 Equity Shares of ` 10 each fully paid General Reserve Profit & Loss Account 10% Debentures Sundry Creditors Bills Payable ` 300,000 25,000 75,000 50,000 20,000 10,000 Assets Goodwill Plant & Machinery Stock Debtors Bills Receivable Cash at bank Cash in hand Discount on issue of Debentures ` 20,000 230,000 120,000 80,000 10,000 13,000 2,000 5,000 480,000

480,000

AB Ltd. took over the assets and liabilities of both the companies as follows : A Ltd. B Ltd. Plant & machinery at 10% less 20% less Computers at ` 1,20,000 -

Motor Van at ` 75,000 Debtors Subject to 5% Provision against bad & doubtful debts Stock 20% higher than the book values. An amount equal to 10% of net assets is to be paid for goodwill. Remaining were taken at their book values. Calculate purchase consideration

[Ans : ` 674300 and 383900 ]

QUESTION
X ltd. agrees to takeover business of Y Ltd. as on 31 March 2004 on which date the Balance Sheet of Y ltd. was as follows : Liabilities 50,000 Equity Shares of ` 10 each Reserves and Surplus 9% Debentures Current Liabilities ` 500,000 250,000 100,000 150,000 Assets Sundry Assets ` 1,000,000
st

1,000,000 The purchase consideration was agreed as follows :

1,000,000

1. X Ltd. to issue 4 shares of ` 10 each for every 5 shares held in Y Ltd. at the market price of ` 15 each 2. A cash payment of ` 2 per share for every share in Y Ltd. 3. Issue of such an amount of fully paid 8% debentures in X Ltd. at 96% as is sufficient to discharge 9% debentures in Y ltd. at a premium of 20%. 4. To pay liquidation expenses of ` 10,000. Calculate purchase consideration. (Ans : ` 7,00,000)

QUESTION

` 2,75,000