1.Why do we give to only equity and prefr share holders...do real owners of company CEO get any money for amalgamation?
Please read AS-14 it says purchase consideration means payment to shareholder only. share holder means both equity & preference share holder.
2.Why goodwill is amortised?
If u are asking about AS-14 goodwill amortised in 5 years, unless longer period is justified [as give n in AS-14]
3.In net assets method,why do prefrence shares are not included and debentures are included?
since u r computing PC from the point of view of shareholder only[share holder means both equity & preference shareholder] , The pref shareholder are not ne treated liability from shareholder point of view , that hence liability towards them is not subtracted.
.If i give working note first and then original solution,then would it be wrong in exam?
NOT AT ALL
5.Sundry charges debited to customers ...what should be the entry with detail?
DEBTORS
To SUNDRY EXPENSES
6.Difference between discount and rebate?
rebate only means trade discount(to attract customer and increase sale ) but 'discount' can be cash discount or trade discount. A rebate is a tool that businesses use to increase sales, making it look like you are getting a better deal than you really are.
7. In computation of capital employed,why dont we deduct long term liabilities ..
assets - short term liabilities = capital employed
we can compute capital employed from
- long term point of view.
- share holder point of view.
- equity shareholder point of view.
in first case (long term point of view.)
assets - short term liabilities = capital employed
in second case (share holder point of view.)
assets - short term liabilities - Pref share capital = capital employed
in last case (equity shareholder point of view.)
assets - short term liabilities - Pref share capital - Eq share capital= capital employed.
so its depends
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sorry for typographical mistakes
CAclubindia
