The following is the Summarized Balance Sheet of A Ltd. as at 31st March 2012. Particulars (1) Note. No (2) A Ltd (3) I. EQUITY AND LIABILITIES 1. Share holder’s Funds: a. Share Capital – (i) 8,000 Equity shares of Rs. 100 each b. Reserves and Surplus : General Reserve 8,00,000 80,000 2. Share Application Money Pending Allotment: ----- 3. Non –Current Liabilities : (i) 10 % debentures (ii) Loan from A 4,00,000 1,60,000 4. Current Liabilities: (i)Trade Payables – Trade Creditors 3,20,000 Total 17,60,000 (ii)Assets (i) Non – Current Assets: (a) Fixed Assets (i) Tangible Assets: Land and Buildings Machinery (ii) Intangible Assets – Goodwill 3,40,000 6,40,000 1,30,000 2. Current Assets: (a) Inventories (b) Trade Receivables (c) Other Current assets – Cash at Bank (d) Share issue Expenses 2,20,000 2,60,000 1,36,000 34,000 Total 17,60,000 B Ltd. Would take over all assets, except bank balance at their book values less 10%. Goodwill is to be valued at 4 years purchase of super profits, assuming that the normal rate of return be 8 % on the combined amount of share capital and general reserve. B Ltd. is to take over creditors at book value and the purchase consideration is to be paid in cash to the extent of Rs. 6, 00,000 and the balance in fully paid equity shares of Rs.100 each at Rs. 125 per share. The average profit is Rs. 1, 24,400. The liquidation expenses amounted to Rs. 16,000. B Ltd sold prior to 31.3.2012, goods costing Rs. 1, 20,000 to A Ltd. for Rs. 1, 60,000. 1,00,000 worth of goods are still in stock of A Ltd. on 31stMarch 2012. Creditors of A Ltd include Rs. 40,000 still due to B Ltd. Show the necessary ledger accounts and Balance sheet of B Ltd. as on 1.4.2012

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

4B. The following is the Summarized Balance Sheet of A Ltd. as at 31^st March 2012.

Particulars (1)	Note. No (2)	A Ltd (3)
I. EQUITY AND LIABILITIES
1. Share holder’s Funds: a. Share Capital – (i) 8,000 Equity shares of Rs. 100 each b. Reserves and Surplus : General Reserve		8,00,000 80,000
2. Share Application Money Pending Allotment:		-----
3. Non –Current Liabilities : (i) 10 % debentures (ii) Loan from A		4,00,000 1,60,000
4. Current Liabilities: (i)Trade Payables – Trade Creditors		3,20,000
Total		17,60,000
(ii)Assets
(i) Non – Current Assets: (a) Fixed Assets (i) Tangible Assets: Land and Buildings Machinery (ii) Intangible Assets – Goodwill		3,40,000 6,40,000 1,30,000
2. Current Assets: (a) Inventories (b) Trade Receivables (c) Other Current assets – Cash at Bank (d) Share issue Expenses		2,20,000 2,60,000 1,36,000 34,000
Total		17,60,000

B Ltd. Would take over all assets, except bank balance at their book values less 10%. Goodwill is to be valued at 4 years purchase of super profits, assuming that the normal rate of return be 8 % on the combined amount of share capital and general reserve.
B Ltd. is to take over creditors at book value and the purchase consideration is to be paid in cash to the extent of Rs. 6, 00,000 and the balance in fully paid equity shares of Rs.100 each at Rs. 125 per share.
The average profit is Rs. 1, 24,400. The liquidation expenses amounted to Rs. 16,000. B Ltd sold prior to 31.3.2012, goods costing Rs. 1, 20,000 to A Ltd. for Rs. 1, 60,000. 1,00,000 worth of goods are still in stock of A Ltd. on 31^stMarch 2012. Creditors of A Ltd include Rs. 40,000 still due to B Ltd.

Show the necessary ledger accounts and Balance sheet of B Ltd. as on 1.4.2012

Expert Solution

Step by step

Solved in 4 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions