On 31* March, 2016, Thin Ltd. Was absorbed by Thick Ltd., the later taking over all the assets and liabilities of the former at book values. The consideration for the business was fixed at $ 4,00,000 to be discharged by the transferee company in the form of its fully paid equity shares of $ 10 each, to be distributed among the shareholders of the transferor company, each shareholder getting two shares for every share held in the transferor company. Balance Sheets taken from the books of the two companies as on 31* March, 2016 stood as under : Thick Ltd. Thin Ltd. 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : Authorised 15,00,000 5,00,000 Issued and Subscribed : Equity Shares of? 10 each (b) Reserves and Surplus: General Reserve Surplus Account Workmen's Compensation Fund Staff Provident Fund (2) Non-current Liabilities Sundry Creditors Provision for Taxation 9,00,000 2,00,000 1,80,000 20,502 12,000 10,200 50,000 12,900 9,000 4,000 58,567 12,300 30,456 5,000 Total Equity and Liabilities 11,93,569 3,11,356 П. Аssets (1) Non-current Assets (a) Fixed Assets 6) Plant & Machinery (ii) Furniture (b) Intangible Asset : Goodwill 4,12,000 80,000 2,00,000 1,00,000 30,000 60,000 (2) Current Assets Stock in Trade 2,65,500 2,21,200 Sundry Debtors Cash in hand Cash at Bank 60,000 46,000 356 8,300 869 Other Current Assets : Prepaid Insurance Income Tax Refund Claim 14,000 700 6,000 Total Assets 11,93,569 3,11,356 Amalgamation expenses amounting to $ 1,000 were paid by Thick Ltd. You are required to prepare Realisation Account and Equity Shareholders Account in the books of Thin Ltd.
On 31* March, 2016, Thin Ltd. Was absorbed by Thick Ltd., the later taking over all the assets and liabilities of the former at book values. The consideration for the business was fixed at $ 4,00,000 to be discharged by the transferee company in the form of its fully paid equity shares of $ 10 each, to be distributed among the shareholders of the transferor company, each shareholder getting two shares for every share held in the transferor company. Balance Sheets taken from the books of the two companies as on 31* March, 2016 stood as under : Thick Ltd. Thin Ltd. 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : Authorised 15,00,000 5,00,000 Issued and Subscribed : Equity Shares of? 10 each (b) Reserves and Surplus: General Reserve Surplus Account Workmen's Compensation Fund Staff Provident Fund (2) Non-current Liabilities Sundry Creditors Provision for Taxation 9,00,000 2,00,000 1,80,000 20,502 12,000 10,200 50,000 12,900 9,000 4,000 58,567 12,300 30,456 5,000 Total Equity and Liabilities 11,93,569 3,11,356 П. Аssets (1) Non-current Assets (a) Fixed Assets 6) Plant & Machinery (ii) Furniture (b) Intangible Asset : Goodwill 4,12,000 80,000 2,00,000 1,00,000 30,000 60,000 (2) Current Assets Stock in Trade 2,65,500 2,21,200 Sundry Debtors Cash in hand Cash at Bank 60,000 46,000 356 8,300 869 Other Current Assets : Prepaid Insurance Income Tax Refund Claim 14,000 700 6,000 Total Assets 11,93,569 3,11,356 Amalgamation expenses amounting to $ 1,000 were paid by Thick Ltd. You are required to prepare Realisation Account and Equity Shareholders Account in the books of Thin Ltd.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On 31* March, 2016, Thin Ltd. Was absorbed by Thick Ltd., the later taking over all the assets and
liabilities of the former at book values. The consideration for the business was fixed at $ 4,00,000 to be
discharged by the transferee company in the form of its fully paid equity shares of $ 10 each, to be
distributed among the shareholders of the transferor company, each shareholder getting two shares for
every share held in the transferor company. Balance Sheets taken from the books of the two companies
as on 31* March, 2016 stood as under :
Thick Ltd. Thin Ltd.
I. Equity and Liabilities
(1) Shareholders' Funds
(a) Share Capital :
Authorised
| 15,00,000 5,00,000
Issued and Subscribed :
Equity Shares of 7 10 each
(b) Reserves and Surplus
General Reserve
9,00,000 2,00,000
Surplus Account
Workmen's Compensation Fund
Staff Provident Fund
(2) Non-current Liabilities
Sundry Creditors
Provision for Taxation
1,80,000
20,502
12,000
10,200
50,000
12,900
9,000
4,000
58,567
12,300
30,456
5,000
Total Equity and Liabilities
11,93,569
3,11,356
II. Assets
(1) Non-current Assets
(a) Fixed Assets
(i) Plant & Machinery
(ii) Furniture
(b) Intangible Asset : Goodwill
4,12,000
80,000
2,00,000
1,00,000
30,000
60,000
(2) Current Assets
Stock in Trade
Sundry Debtors
Cash in hand
Cash at Bank
Other Current Assets:
Prepaid Insurance
Income Tax Refund Claim
60.000
46,000
356
8,300
2,65,500
2,21,200
869
14,000
700
6,000
Total Assets
11,93,569
3,11,356
Amalgamation expenses amounting to $ 1,000 were paid by Thick Ltd. You are required to prepare
Realisation Account and Equity Shareholders Account in the books of Thin Ltd.
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