Pls solve this

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Following is the Balance Sheet of X Co. Ltd. as at 31st March, 2008: Balance Sheet as at 31st March, 2008 Liabilities Rs. Assets Rs. Equity share capital (Rs. 100 each) 11% Pref. share capital General reserve Sundry creditors 15,00,000 5,00,000 3,00,000 2,00,000 Land and building Plant and machinery Furniture and fittings Stock in trade Sundry debtors Cash in hand and at bank 10,00,000 7,00,000 2,00,000 3,00,000 2,00,000 1,00,000   25,00,000   25,00,000 Y Co. Ltd. agreed to take over X Co. Ltd. on the following terms: (i) Each equity share in X Co. Ltd. for the purpose of absorption is to be valued at Rs. 80. (ii) Equity shares will be issued by Y Co. Ltd. by valuing its each equity share of Rs. 100 each at Rs. 120 per share. (iii) 11% Preference shareholders of X Co. Ltd. will be given 11% redeemable debentures of Y Co. Ltd. at equivalent value. (iv) All the Assets and Liabilities of X Co. Ltd. will be recorded at the same value in the books of Y Co. Ltd.  (a) Calculate Purchase consideration.  (b) Pass Journal entries in the books of Y Co. Ltd. for absorbing X Co. Ltd.

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ONLY CAL ... PC 

Replies (5)

pls check the link  :| 

Journal Entries in the books of Y Co. Ltd.

 

Date

Particulars

L/F

Debit

Credit

1.

Business Purchase a/c Dr.

To Liquidator of X Co. Ltd.

(Being purchase consideration on absorption of X Co Ltd)

 

17,00,000/-

 

17,00,000/-

2.

Land & Building

Plant & Machinery

Furniture & Fixtures

Stock in trade

Sundry Debtors

Cash & Bank

To Sundry Creditors

To Business Purchase

To Capital Reserve

(Being Assets and Liabilities of X Co Ltd taken over)

 

10,00,000/-

7,00,000/-

2,00,000/-

3,00,000/-

2,00,000/-

1,00,000/-

 

 

 

 

 

 

2,00,000/-

17,00,000/-

6,00,000/-

3.

Liquidator X co. Ltd.

To Equity Share Capital a/c

To Securities Premium a/c

To 11% Redeemable Debenture a/c

(Being discharge of liquidator of X Co Ltd by issuing 10000/- equity shares of 100/- each @ 120/- per share and redeemable debenture for Rs.5,00,000/-)

 

17,00,000/-

 

10,00,000/-

2,00,000/-

5,00,000/-

Purchase Consideration

15,00,000/100*80/120 = 10000 shares @ 120/- =

 

12, 00, 000/-

11% Preference Shares issued 11% Redeemable Debenture  =

5, 00, 000/-

Total =

17, 00, 000/-

 

Pl find in attachment

thank u

got it sorted out in another thread but thanks for ur detailed anwser :)

i was getting confused that we should not take 500000 in PC bcoz PSH are paid in  debentures 

u r welcome Manish


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