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Madhu Limited took over Rakhi Limited on 31st march, 2018, on which day, the summarised balance Sheet of Rakhi Ltd. was as follows :
Summarised Balance Sheet
As on 31st March, 2018
| Liabilities | Rs. | Assets | Rs. |
| Equity Shares of 10/- each | 10,00,000 | Goodwill | 60,000 |
| 5 % Preference shares 100/- each | 4,00,000 | Cash & Bank Balance | 80,000 |
| Creditors | 1,00,000 | Inventory | 3,10,000 |
| Bills Payable | 60,000 | Plant & Machinery | 4,10,000 |
| Debtors | 1,10,000 | ||
| Land and Building | 5,00,000 | ||
| Preliminary Expenses | 35,000 | ||
| Profit and Loss A/c | 55,000 | ||
| (Dr. Balance) | |||
| 15,60,000 | 15,60,000 |
The business was taken over by Madhu limited on the following terms and condition .
1. For every 10 equity shares of Rakhi limited, Madhu Ltd. issued 11 fully paid equity shares of Rs .10 each· and paid Rs.15 in cash.
2. Preference ·shareholders of Rakhi Limited were paid, equal number of 6% preference shares of Rs.100/- each by Madhu Limited at a premium of 8% .
3. All assets und Liabilities Were taken over at book value except Cash & Bank Balance to the extent of Rs. 14,000 which was left for meeting realization expenses.
you are required to :
(a) Calculate Purchase Consideration &
(b) Prepare necessary ledger accounts to close the Books of Rakhi Ltd., assuming acquisition is in nature of purchase.
Roopa Ltd .took over the business of sonali Ltd . 1st April, 2018 at book value. Following is the summarised Balance sheet of sonali Ltd, as on 31-3-2018
| Liabilities | Rs. | Assets | Rs |
| 80,000 Equity Shares of Rs 10/- each | 8,00,000 | Plant & Machinery | 5,00,000 |
| General Reserve | 4,00,000 | ||
| Profit & Loss Account | 2,00,000 | Furniture & Fixtures | 4,50,000 |
| Creditors | 2,00,000 | Motor Vehicles | 1,00,000 |
| Investments | 1,00,000 | ||
| Stock | 1,00,000 | ||
| Debtors | 2,00,000 | ||
| Cash & Bank Balance | 50,000 | ||
| Preljminary Expenses | 1,00,000 | ||
| 16,00,000 | 16,00,000 |
Roopa Ltd. issued one equity share of Rs. 10/- per each at a premium of Rs. 2 per share for every share in Sonali Ltd.
Calculate Purchase Consideration and also prepare Balance Sheet of Roopa Ltd. after acquisition. Acquisition is in the nature of Purchase. ·
Following are the Balance Sheet of Galaxy Ltd. & Gemini Ltd. as on 31st March, 2018.
Balance Sheet as on 31st March 2018
| Liabilities |
Galaxy, Ltd Rs. |
Gemini Ltd Rs. |
Assets |
Galaxy, Ltd Rs. |
Gemini 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 |
PQR |
Assets | ABC Ltd. Rs. |
PQR 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.
