Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
12th Edition
ISBN: 9781259144387
Author: Richard A Brealey, Stewart C Myers, Franklin Allen
Publisher: McGraw-Hill Education
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Chapter 31, Problem 15PS
Summary Introduction
To discuss: The effects on Company AB’s
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Examine how do you treat the following items when X Ltd. is merging with Y Ltd. on 1st
January 2023 on the assumption:
A.
Condition u/s 2(1B) and u/s 72A does not satisfy
B. Condition u/s 2(1B) satisfy but conditions u/s 72A not satisfy
C. Conditions u/s 2(1B) and u/s 72A are satisfied
Other Information of X Ltd.:
(i) Business Profits (before adjusting losses and expenses)
*60,000
(ii) Expenses on merger
*2,00,000
(iii) VRS Compensation (Paid during 2020-21)
*4,00,000
(iv) Sale consideration of non-depreciable capital assets
*20,00,00
(v) Indexed cost of acquisition of non-depreciable capital assets
*12,00,000
(vi) Sale consideration of depreciable assets
*10,00,000
(vii) WDV of depreciable assets
*7,00,000
(viii) Non-speculation business loss relating to 1994-95
*3,00,000
(ix) Unabsorbed depreciation relating to 2020-21
1,50,000
(x) Long term Capital loss relating to 2021-22
*2,00,000
Business profits of Y Ltd. (before adjusting losses and expenses) ₹30,00,000 and long term
capital…
In the business combination of Polka and Spot
Select one:
a. all of the costs except those of registering and issuing the securities are included in the purchase price of Spot.
b. the salaries of Polka's employees assigned to the merger are treated as expenses.
c. only the accounting and legal fees are included in the purchase price of Spot
d. the costs of registering and issuing the securities are included as part of the purchase price for Spot.
When one company buys the assets and liabilities of another company, this is known as which of the following?Choose one answer.a. Limited liability company b. Merger c. Conventional corporation d. Acquisition
Chapter 31 Solutions
Principles of Corporate Finance (Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 31 - Prob. 1PSCh. 31 - Prob. 2PSCh. 31 - Prob. 3PSCh. 31 - Taxation Which of the following transactions are...Ch. 31 - Prob. 5PSCh. 31 - Prob. 6PSCh. 31 - Prob. 9PSCh. 31 - Merger gains and costs Sometimes the stock price...Ch. 31 - Merger motives Suppose you obtain special...Ch. 31 - Prob. 12PS
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