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Sandesh Ltd. Took Over the Assets of Rs.7,00,000 and Liabilities of Rs.2,00,000 from Sanchar Ltd. for a Purchase Consideration of Rs.4,59,500. Rs.8,500 Were Paid by Accepting a Draft in Favour of Sanchar Ltd. - CBSE (Arts) Class 12 - Accountancy

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Question

Sandesh Ltd. took over the assets of Rs.7,00,000 and liabilities of Rs.2,00,000 from Sanchar Ltd. for a purchase consideration of Rs.4,59,500. Rs.8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of `10 each at a premium of 10% in favour of Sanchar Ltd.

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

Solution

                                                                                  Sandesh Ltd

                                                                                       Journal

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

(i)

 

 

 

 

 

(ii)

 

 

 

 

Sundry Assets A/c

           To Sundry Liabilities A/c

           To Sanchar Ltd A/c

           To Capital Reserve A/c

(Being assets and liabilities purchased of Sanchar Ltd)

 

Sanchar Ltd

             To Equity Share Capital A/c

             To Securities Premium A/c

             To Bank A/c

(Being 41,000 Equity Shares issued of Rs.10 each at a premium of Rs.1 per share and 8,500 by bank draft)

 

7,00,000

 

 

 

 

 

4,59,500

 

 

 

 

 

2,00,000

4,59,500

40,500

 

 

 

4,10,000

41,000

8,500

 

 

Working Notes:

WN1: Calculation of Number of Equity Shares

Number of Shares Issued = Purchase Consideration / Issue Price

                                      = 4,51,000/11

                                      = 41,000 equity shares

  Is there an error in this question or solution?
Solution Sandesh Ltd. Took Over the Assets of Rs.7,00,000 and Liabilities of Rs.2,00,000 from Sanchar Ltd. for a Purchase Consideration of Rs.4,59,500. Rs.8,500 Were Paid by Accepting a Draft in Favour of Sanchar Ltd. Concept: Issue at Par and Premium and at Discount.
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