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ILLUSTRATION 6. Following are the Balance Sheets of Big Ltd. and Small Ltd. for the year ending on 31st March, 2016. (Figures in crores of rupees) : Big Ltd. 50 Small Ltd. Equity Share Capital-in equity shares of $ 10 each Preference Share Capital-in 10% preference shares of $ 100 each Reserves and Surplus 40 60 200 150 250 250 Loans-Secured 100 100 Total funds 350 350 Applied for : Fixed Assets at Cost less Depreciation Current Assets less Current Liabilities 150 150 200 200 350 350 The present worth of fixed assets of Big Ltd. is $ 200 crores and that of Small Ltd. is $ 429 crores. Goodwill of Big Ltd. is $ 40 crores and of Small Ltd. is 75 crores. Small Ltd. absorbs Big Ltd. by issuing equity shares at par in such a way that intrinsic net worth is maintained. Goodwill account is not to appear in the books. Fixed assets are to appear at old figures. Draft a statement of valuation of shares on intrinsic value basis and prove the accuracy of workings. your

ILLUSTRATION 6. Following are the Balance Sheets of Big Ltd. and Small Ltd. for the year ending on 31st March, 2016. (Figures in crores of rupees) : Big Ltd. 50 Small Ltd. Equity Share Capital-in equity shares of $ 10 each Preference Share Capital-in 10% preference shares of $ 100 each Reserves and Surplus 40 60 200 150 250 250 Loans-Secured 100 100 Total funds 350 350 Applied for : Fixed Assets at Cost less Depreciation Current Assets less Current Liabilities 150 150 200 200 350 350 The present worth of fixed assets of Big Ltd. is $ 200 crores and that of Small Ltd. is $ 429 crores. Goodwill of Big Ltd. is $ 40 crores and of Small Ltd. is 75 crores. Small Ltd. absorbs Big Ltd. by issuing equity shares at par in such a way that intrinsic net worth is maintained. Goodwill account is not to appear in the books. Fixed assets are to appear at old figures. Draft a statement of valuation of shares on intrinsic value basis and prove the accuracy of workings. your

Financial Reporting, Financial Statement Analysis and Valuation
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter7: Financial Activities
Section: Chapter Questions
Problem 3QE: Following is the shareholders equity section of All-Wood Doors on a day a. Use the financial...
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ILLUSTRATION 6. Following are the Balance Sheets of Big Ltd. and Small Ltd. for the year ending on 31st March, 2016. (Figures in crores of rupees) : Big Ltd. 50 Small Ltd. Equity Share Capital-in equity shares of $ 10 each Preference Share Capital-in 10% preference shares of $ 100 each Reserves and Surplus 40 60 200 150 250 250 Loans-Secured 100 100 Total funds 350 350 Applied for : Fixed Assets at Cost less Depreciation Current Assets less Current Liabilities 150 150 200 200 350 350 The present worth of fixed assets of Big Ltd. is $ 200 crores and that of Small Ltd. is $ 429 crores. Goodwill of Big Ltd. is $ 40 crores and of Small Ltd. is 75 crores. Small Ltd. absorbs Big Ltd. by issuing equity shares at par in such a way that intrinsic net worth is maintained. Goodwill account is not to appear in the books. Fixed assets are to appear at old figures. Draft a statement of valuation of shares on intrinsic value basis and prove the accuracy of workings. your
Transcribed Image Text:ILLUSTRATION 6. Following are the Balance Sheets of Big Ltd. and Small Ltd. for the year ending on 31st March, 2016. (Figures in crores of rupees) : Big Ltd. 50 Small Ltd. Equity Share Capital-in equity shares of $ 10 each Preference Share Capital-in 10% preference shares of $ 100 each Reserves and Surplus 40 60 200 150 250 250 Loans-Secured 100 100 Total funds 350 350 Applied for : Fixed Assets at Cost less Depreciation Current Assets less Current Liabilities 150 150 200 200 350 350 The present worth of fixed assets of Big Ltd. is $ 200 crores and that of Small Ltd. is $ 429 crores. Goodwill of Big Ltd. is $ 40 crores and of Small Ltd. is 75 crores. Small Ltd. absorbs Big Ltd. by issuing equity shares at par in such a way that intrinsic net worth is maintained. Goodwill account is not to appear in the books. Fixed assets are to appear at old figures. Draft a statement of valuation of shares on intrinsic value basis and prove the accuracy of workings. your
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