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'B' Ltd. Took Over the Assets of Rs.14,00,000 and Liabilities of Rs.4,00,000 of C Ltd. for a Purchase Consideration of Rs.9,19,000. Rs.17,000 Were Paid by a Bank Draft in Favour of C Ltd. and the Balance Was Paid by Issue of Equity Shares of Rs.10 Each at a Premium of 10% in Favour of C Ltd. - CBSE (Arts) Class 12 - Accountancy

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Question

B' Ltd. took over the assets of Rs.14,00,000 and liabilities of Rs.4,00,000 of C Ltd. for a purchase consideration of Rs.9,19,000. Rs.17,000 were paid by a bank draft in favour of C Ltd. and the balance was paid by issue of equity shares of Rs.10 each at a premium of 10% in favour of C Ltd.

Pass necessary journal entries for the above transactions in the books of B Ltd.

Solution

                                                                        Journal

Date Particulars L.F. Dr. (Rs) Cr. (Rs)

(i)

 

 

 

 

 

(ii)

 

 

 

 

Sundry Assets A/c                                                                   Dr

              To Sundry Liabilities A/c

               To C Ltd

               To Capital Reserve A/c

(Being assets and liabilities purchased of C Ltd)

 

C Ltd                                                                                      Dr

                To Equity Share Capital A/c

                To Securities Premium A/c

                To Bank A/c

(Being 82,000 equity shares issued of Rs.10 each at a premium of Rs.1 per share and Rs.17,000 by bank draft)

 

14,00,000

 

 

 

 

 

9,19,000

 

 

 

 

 

4,00,000

9,19,000

81,000

 

 

 

8,20,000

82,000

17,000

 

Working Notes:

WN1 : Calculation of Number of Equity Shares

`"Number of Shares Issued =""Purchase Consideration"/"Issue Price"`

                                     `=(9,02,000)/11=82,000" equity shares"`

 

  Is there an error in this question or solution?
Solution 'B' Ltd. Took Over the Assets of Rs.14,00,000 and Liabilities of Rs.4,00,000 of C Ltd. for a Purchase Consideration of Rs.9,19,000. Rs.17,000 Were Paid by a Bank Draft in Favour of C Ltd. and the Balance Was Paid by Issue of Equity Shares of Rs.10 Each at a Premium of 10% in Favour of C Ltd. Concept: Issue at Par and Premium and at Discount.
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