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Following are the Balance Sheet of Galaxy Ltd. & Gemini Ltd. as on 31st March, 2018.

Balance Sheet as on 31st March 2018



Ltd Rs.


Ltd Rs.



Ltd Rs.


Ltd Rs.

Share Capital 50,000 1,00,000 Fixed Assets 60,000  
(Rs.10 each)     Loans to Gemini Ltd 5,000  
Reserve Fund 20,000 30,000 Debtors 15,000 10,000
Foreign Projects     Stock 10,000 15,000
Reserve 5,000        _ Cash at Banlc     _ 5,000
Creditors 15,000 15,000       _  
Loan from Galaxy Ltd    5,000      
  90,000 1,55,000   90,000 1,55,000_

Gemini Ltd. agreed to absorb Galaxy Ltd. on the following terms :

Gemini Ltd. shall give one share of. Rs. 10 each at Rs . 35 per share· for every 3 shares held in  Galaxy Ltd. the amount for the fraction of shares shall be paid in cash calculated as per the market  price of the share of Gemini Ltd.

Stock of Galaxy Itd includes goods worth Rs.7 ,500  purchased from Gemini Ltd. Which had a profit margin  of 20 % on cost.

Debtors of Gentlni Ltd includes Rs. 2,500 being the amount due from Galaxy Ltd. but the creditors of Galaxy Ltd. include Rs. 2,000 only being the amount due to Gemini Ltd. The difference between the debtors and creditors is due to cash in transit.

The shares of Genuni Ltd. are quoted in the market at 45 per share.
You are required to pass the journal entries in the books of Gemini Ltd. and the Balance Sheet  after absorption, assuming that the foreign projects reserve is still to be maintained for 3 years.
Assume that the amalgamation is in the nature of purchase.

Following are the Balance Sheets of ABC Limited and PQR Limited on 31st March., 2018 

Liabilities ABC 
Ltd. Rs

Ltd. Rs

Assets ABC
Ltd. Rs.
Ltd. Rs
Equity Shares Capital 12,00,000 18,00,000 Goodwill 90,000 1,50,000
(Shares of Rs 100 each Fully paid)     Premises 9,75,000 10,50,000
7%Preference Shares of Rs.100 each 6,75,000 9,00,000 Plant & Machinery 9,00,000 12,30,000
General Reserve 1,05,000 1,20,000 Stock 2,70,000 3,75,000
Profit & Loss Account 67,500 93,000 Sundry 2,10,000 5,02,500
Statutory Reserve 40,500 72,000 Debtors    
10% Debentures 2,25,000 1,26,000 Bank 18,000 36,000
Sundry Creditors 1,50,000 2,32,500      
Total 24.63.000 33,43,500 Total 24,63,000 33,43,500

On the above date, PQR Limited takes over ABC Limited on the following terms and conditions :

1. All Assets and Liabilities are taken over at book value except the following which were revalue C: as follows :

Premises Rs. 8,50,000 and Plant and Machinery Rs. 7 ,00,000

2. Shareholders of ABC Limited to be issued 10,000 equity shares oft 100 each  at 10% prem.ium.

3. 7% preference shareholders of ABC Limit  to be discharged at 10% premium by issuing 8% preference shares oft 100 each (at par).

4. Debentures of ABC Limited , to be converted into equivalent number of debentures of PQR Limited .

5. Sundry-Debtors of PQR Limited include Rs. 25000 due from ABC Limited

6. Cost of liquidation am9unting to Rs. 4,000 were borne by PQR Limited.

you are required to :

(i) Calculate Purchase Consideration.

(ii) Pass Journal entries in the books of PQR Limited.

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