Question

Shubha Ltd. absorbed Sushma Ltd. with effect from 1st April, 2018 when their Balance Sheets as .on 31st March, 2018 were as under :

Liabilities	Shubha Ltd	Sushma Ltd	Assets	Shubha Ltd	Sushma Ltd
Share Capital :			Fixed Assets :
.11 % Preference Shares of' 100 each	2,00,000	2,00,000	Land and Building	2,20,000	1,40,000
Equity Shares.·of' Rs 100 each	5,00,000	2,00,000	Plant & Machinery	4,20,000	2,60,000
Reserves & Surplus :			Current Assets, Loans Advances:
Revaluation Reserve	20,000	-	Stock	2,90,000	1,60,000
Export Profit Reserve	40,000	20,000	Sundry Debtors	1,20,000	1,40,000
General Reserve	2,00,000	60,000	Bills Receivable	1,30,000	90,000
Secured Loans :			Bank	20,000	10,000
10% Debentures of'100	-	1,20,000
15% Debentures of'100	80,000	-
Current Liabilities & Provisions
Sundry Creditors	1,60,000	2,00,000
	12,00,000	8,00,000		12.00.000	8,00,000

Terms of Amalgamation :

1. Subha Ltd. will issue 8 equity shares for 5 equity shares in Sushma Ltd.

2. 11 % preference shareholders. of Sushma.Ltd. will be issued an equal number of  equity shares in Shubha Ltd.

3 . 10 % debenturesholders ·of .Sushma Ltd. are discharged .by Sushma Ltd. by issuing equal number of its 15% debentures of Rs.100 each.

4. All the assets and liabilities of Sushma Ltd. are taken over at book values except the following :

Fixed assets at 10% inore than book, value. Stock at ~ 1,44,000.
Debtors at 1,25,000. Bills  receivables at Rs. 81,000.

You are required to :

(i) Computer Purchase Consideration.

(ii) Prepare Ledger Accounts to close the books of Account of Sushma Ltd.

Answer 1

In the Books of Sushma 'Ltd.
Realisation A/c

Particulars			Particulars
To Land & Building	1,40,000		By 10% Debentures	1,20,000
To Plant & Machinery	2,60,000		By Creditors	2,00,000	3,20,000
To Stock	1,60,000		By ShubhaLtd. (Purchase Consideration )		'S,20,000
To Debtors	1,40,000
To Bills Receivable	90,000
To Bank	10,000	8,00,000
To Equity Shareholders  (Profit)		40,000
		8,40,000			8.40,000

Shubha Ltd. A/c

Particulars	Rs.	Particulars	Rs.
To Realisation A/c (Purchase Consideration)	5,20,000	By Equity .Shares  in Shubha Ltd.	5,20,000
	5,20,000		5,20,000

Equity Shares in Shubha LTD.A/c

Particulars	Rs.	Particulars
To Shubha Ltd.	5,20,000	By 11% Preference Shareholders	2,00,000
		By Equity Shareholders	3,20,000
	5,20,000		5,20,000

11% Preference Shareholders Ale

Particulars	Rs.	Particulars	Rs.
To Equity Shares in Shubha Ltd.	2,00,000	By 11 % Preference Share Capital	2,00,000
	2 00 000		2 00 000

Equity Shareholders A/c 

Particulars		Particulars
To Equity Shares in Shubha Ltd.	3,20,000	By Equity Share Capital	2,00,000
		By Export Profit Reserve	20,000
		By General Reserve	60,000
		By Realisation (Profit)	40,00Q
	3,20,000		3,20,000

Statement of P•C •

To Whom	Particulars	Mode
Eq. Shares in Sushma Ltd.	5:8 2,00Q 3,200 x 100 = 3,20,000	Eq. Shares in Subha Ltd
11 % Pref. Shares in Sushma Ltd.	2,000 x. 100 = 2,,00,000	11 % Pref. Shares in Subha Ltd.

∴ PC= 5,20,000
In the Books of Shubha Ltd.

No.	Particulars	Dr.	Cr.
1.	Business Purchase A/c      Dr.	5,20,000
	To Liquidator of Sushma Ltd. A/c		5,20,000
2.	Land & :euilcling A/c        Dr.	'1,54,000
	Plant.& Machinery A/c      Dr.	2,86,000
	Stock A/c                        Dr.	1,44,000
	Debtors A/c                    Dr.	1,25,000
	Bills Receivable A/c          Dr.	81,000
	Bank A/c                        Dr.	10,000
	Goodwill A/c                  Dr.	40,000
	To 10% Debentures of Sushma A/c		1,20,000
	To Creditors A/c		2,00,000
	To Business Purchase A/c		5,20,000
	(Being assets and liabilities taken over)
3.	Liquidator of sushma Ltd. A/c                                Dr.	5,20,000
	To Equity Share.Capital A/c (Being purchase consideration diseharged)		5,20,00o
4.	10% Debentures of Sushma Ltd.                                     Dr.	1,20,000
	To 15% Debentures A/c (Being debentures exehanged)		1,20,000
5.	Amalgamation Adjustinent A/c Dr.	20,000
	To Export Profit Reserve A/c (Being statutory reserve brought forward)		20,000