68 Advanced Corporate Accounting 4. Spring Field Ltd. is absorbed by Sports Field Ltd., the consideration being: 1. The taking over of the trade liabilities of 740,0003; 2. The payment of cost of absorption of 15,0003; 3. The repayment of B' debentures of Spring Field Ltd. of 2,00,000 at par, 4. The discharge of 'A' debentures of 3,00,000 in the Vendor Co. at n premium o of 8% debentures in Sports Field Ltd. at par, 5. A payment of 20 per share in cash and the exchange of 4 fully paid 10 sha Ltd. at a market price of 15 per share for every 50 share in Spring Field Ltd. v in number.

68 Advanced Corporate Accounting 4. Spring Field Ltd. is absorbed by Sports Field Ltd., the consideration being: 1. The taking over of the trade liabilities of 740,0003; 2. The payment of cost of absorption of 15,0003; 3. The repayment of B' debentures of Spring Field Ltd. of 2,00,000 at par, 4. The discharge of 'A' debentures of 3,00,000 in the Vendor Co. at n premium o of 8% debentures in Sports Field Ltd. at par, 5. A payment of 20 per share in cash and the exchange of 4 fully paid 10 sha Ltd. at a market price of 15 per share for every 50 share in Spring Field Ltd. v in number.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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68 Advanced Corporate Accounting
Spring Field Ltd. is absorbed by Sports Field Ltd., the consideration being:
1. The taking over of the trade liabilities of 740,000;
2. The payment of cost of absorption of 15,000;
3. The repayment of B' debentures of Spring Field Ltd. of 2,00,000 at par,
4. The discharge of 'A' debentures of 3,00,000 in the Vendor Co. at n premium of 10% by the issue
of 8% debentures in Sports Field Ltd. at par,
5. A payment of 20 per share in cash and the exchange of 4 fully paid 10 shares in Sports Field
Ltd. at a market price of 15 per share for every 750 share in Spring Field Ltd. which were 40,000
4.
Profit after ta
1991
1990
1989
Gioodwill may be taken at 4 years
basis of 10% normal trading prot
amalgamation of both companies
in number.
You are required to find out the purchase consideration.

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