DeepKumar (student) (25 Points)
25 December 2017In Amalgamation, we pass following entry in the books of purchasing co. for business purchase
Business Purchase A/c Dr.
To Liquidator of Transferor co. A/c
Why we credit liquidator's account and not transferor co's account? and in the books of transferor comany we directly debit transferee co's account and not liquidator account...
can any one help on this please?
satish
(teaching)
(2046 Points)
Replied 25 December 2017
as the transferree co point of view (Purchasing Co):
Vendor company has taken decision to windingup. once winding up decision is taken by vendor company, king of the company is liquidator. so what ever the trasactions which is done by the company is in the name of liquidator only. here Purchasing company dealing with Liquidator of Vendor company. not with Vendor comapny.
if it is a sole proprietory concern we can deal with vendor only.
as the transferor co point of view (Vendor Co):
in this case company dealing with company (continuing company). In this case consideration receivable from Purchasing company only. there is no question of Liquidator. i.e. liquidator of purchasing company is meaning less point.
DeepKumar
(student)
(25 Points)
Replied 29 December 2017
satish
(teaching)
(2046 Points)
Replied 29 December 2017
my dear deep kumar,
Vendor company is going to close. thats why liquidator has to deal all the transactions on behalf of vendor company.
But purchasing company not under winding company. it will continue in future.
So Liquidator of vendor company deals with Purchasing company
where as Purchasing company deals with liquidator of vendor company.
Is it clear.
DeepKumar
(student)
(25 Points)
Replied 30 October 2018
Dear sir,
sorry i for late reply...
sir my only question is when puchase consideration falls due in the books of purchasing company we pass following entry:
Business purchase a/c Dr.
to Liquidator of selling co. A/c
and in the books of selling company we pass
Purchasing company a/c Dr
to Realisation A/c
now if i apply simple logic with one small example , if X has purchased goods from Y then in the books of X and Y respectively following entries will come
Purchase A/c Dr
To Y's A/c
and
X's A/c Dr
to Sales A/c
cnt we apply same rule..?
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