Sun Limited agreed to absorb Moon Limited on 31s* March 2016 whose summarized Balance Sheet stood as follows: 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : 1,20,000 shares of $10 each fully paid 12,00,000 (b) Reserves and Surplus: General Reserve 1,50,000 (2) Non-Current Liabilities Long-term Borrowings : Secured Loan Unsecured Loan (3) Current Liabilities Sundry Creditors 1,50,000 Total Equity and Liabilities 15,00,000 u. Assets (1) Non-current Assets Fixed Assets 10,50,000 Investments (2) Current Assets Stock in Trade 1,50,000 Sundry Debtors 3,00,000 Total Assets 15,00,000 The consideration was agreed to be paid as follows: (a) A payment in cash of $5 per share in Moon Ltd. and (b) The issue of shares of $ 10 each in Sun Ltd. on the basis of two equity shares (valued at $15) and one 10% cumulative preference share (valued at $ 10) for every five shares held in Moon Ltd. The whole of the share capital consists of shareholdings in exact multiple of five except the following holding : P-174; Q-114; R-108; S-42; Other Individuals-12 (Twelve members holding one share each) It was agreed that Sun Ltd. will pay in cash for fractional shares equivalent at agreed value of shares in Moon Ltd. i.e. $65 for five shares of $50 paid. Prepare a statement showing the purchase consideration receivables in shares and cash.
Sun Limited agreed to absorb Moon Limited on 31s* March 2016 whose summarized Balance Sheet stood as follows: 1. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : 1,20,000 shares of $10 each fully paid 12,00,000 (b) Reserves and Surplus: General Reserve 1,50,000 (2) Non-Current Liabilities Long-term Borrowings : Secured Loan Unsecured Loan (3) Current Liabilities Sundry Creditors 1,50,000 Total Equity and Liabilities 15,00,000 u. Assets (1) Non-current Assets Fixed Assets 10,50,000 Investments (2) Current Assets Stock in Trade 1,50,000 Sundry Debtors 3,00,000 Total Assets 15,00,000 The consideration was agreed to be paid as follows: (a) A payment in cash of $5 per share in Moon Ltd. and (b) The issue of shares of $ 10 each in Sun Ltd. on the basis of two equity shares (valued at $15) and one 10% cumulative preference share (valued at $ 10) for every five shares held in Moon Ltd. The whole of the share capital consists of shareholdings in exact multiple of five except the following holding : P-174; Q-114; R-108; S-42; Other Individuals-12 (Twelve members holding one share each) It was agreed that Sun Ltd. will pay in cash for fractional shares equivalent at agreed value of shares in Moon Ltd. i.e. $65 for five shares of $50 paid. Prepare a statement showing the purchase consideration receivables in shares and cash.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Sun Limited agreed to absorb Moon Limited on 31s* March 2016 whose summarized Balance Sheet
stood as follows:
1. Equity and Liabilities
2$
(1) Shareholders' Funds
(a) Share Capital :
1,20,000 shares of $10 each fully paid
12,00,000
(b) Reserves and Surplus:
General Reserve
1,50,000
(2) Non-Current Liabilities
Long-term Borrowings :
Secured Loan
Unsecured Loan
(3) Current Liabilities
Sundry Creditors
1,50,000
Total Equity and Liabilities
15,00,000
II. Assets
(1) Non-current Assets
Fixed Assets
10,50,000
Investments
(2) Current Assets
Stock in Trade
1,50,000
Sundry Debtors
3,00,000
Total Assets
15,00,000
The consideration was agreed to be paid as follows:
(a) A payment in cash of $5 per share in Moon Ltd. and
(b) The issue of shares of $ 10 each in Sun Ltd. on the basis of two equity shares (valued at $15)
and one 10% cumulative preference share (valued at $ 10) for every five shares held in Moon
Ltd.
The whole of the share capital consists of shareholdings in exact multiple of five except the following
holding :
P-174; Q-114; R-108; S-42; Other Individuals-12 (Twelve members holding one share each)
It was agreed that Sun Ltd. will pay in cash for fractional shares equivalent at agreed value of shares
in Moon Ltd. i.e. $65 for five shares of $50 paid.
Prepare a statement showing the purchase consideration receivables in shares and cash.
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