Q-7 The financial position of two companies Alex Ltd. and Beta Ltd. as on 31st March, 2017 was as under: Assets Alex Ltd. () Beta Ltd. () Goodwill 1,40,000 70,000 Building Machinery Inventory Trade receivables 8,40,000 2,80,000 14,00,000 4,20,000 7,00,000 4,90,000 5,60,000 2,80,000 1.40.000 37,80,000 Alex Ltd. () Cash at Bank 56.000 15,96.000 Beta Ltd. () Liabilities Share Capital: Equity Shares of 10 each 8% Preference Shares of 100 each 28,00,000 8,40,000 2,80,000 10% Preference Shares of 100 each 2,80,000 General Reserve 1,96,000 1,96,000 Retirement Gratuity fund Trade payables 1,40,000 56,000 3.64.000 37,80,000 2.24.000 15,96,000 Beta Ltd.is absorbed by Alex Ltd. on the following terms: (a) 10% Preference Shareholders are to be paid at 10% premium by issue of 8% Preference Shares of Alex Ltd. (b) Goodwill of Beta Ltd. is valued at 1,40,000, Buildings are valued at 4,20,000 and the Machinery at 4,48,000. (c) Inventory to be taken over at 10% less value and Provision for Doubtful Debts to be created @ 7.5%. (d) Equity Shareholders of Beta Ltd. will be issued Equity Shares of Alex Ltd. @ 5% premium. You are required to: (a) Prepare necessary Ledger Accounts to close the books of Beta Ltd. (b) Prepare the acquisition entries in the books of Alex Ltd.
Q-7 The financial position of two companies Alex Ltd. and Beta Ltd. as on 31st March, 2017 was as under: Assets Alex Ltd. () Beta Ltd. () Goodwill 1,40,000 70,000 Building Machinery Inventory Trade receivables 8,40,000 2,80,000 14,00,000 4,20,000 7,00,000 4,90,000 5,60,000 2,80,000 1.40.000 37,80,000 Alex Ltd. () Cash at Bank 56.000 15,96.000 Beta Ltd. () Liabilities Share Capital: Equity Shares of 10 each 8% Preference Shares of 100 each 28,00,000 8,40,000 2,80,000 10% Preference Shares of 100 each 2,80,000 General Reserve 1,96,000 1,96,000 Retirement Gratuity fund Trade payables 1,40,000 56,000 3.64.000 37,80,000 2.24.000 15,96,000 Beta Ltd.is absorbed by Alex Ltd. on the following terms: (a) 10% Preference Shareholders are to be paid at 10% premium by issue of 8% Preference Shares of Alex Ltd. (b) Goodwill of Beta Ltd. is valued at 1,40,000, Buildings are valued at 4,20,000 and the Machinery at 4,48,000. (c) Inventory to be taken over at 10% less value and Provision for Doubtful Debts to be created @ 7.5%. (d) Equity Shareholders of Beta Ltd. will be issued Equity Shares of Alex Ltd. @ 5% premium. You are required to: (a) Prepare necessary Ledger Accounts to close the books of Beta Ltd. (b) Prepare the acquisition entries in the books of Alex Ltd.
Corporate Financial Accounting
14th Edition
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter1: Introduction To Accounting And Business
Section: Chapter Questions
Problem 1.25EX: Financial statements We-Sell Realty, organized as a corporation on August 1, 2018, is owned and...
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Transcribed Image Text:Q-7
The financial position of two companies Alex Ltd. and Beta Ltd. as on 31st March, 2017 was as under:
Assets
Alex Ltd. ()
Beta Ltd. ()
Goodwill
1,40,000
70,000
Building
Machinery
Inventory
8,40,000
2,80,000
14,00,000
4,20,000
7,00,000
4,90,000
Trade receivables
5,60,000
2,80,000
Cash at Bank
1.40.000
37.80.000
Alex Ltd. ()
56.000
15,96,000
Beta Ltd. ()
Liabilities
Share Capital:
Equity Shares of 10 each
28,00,000
8,40,000
8% Preference Shares of 100 each
2,80,000
10% Preference Shares of 100 each
2,80,000
General Reserve
1,96,000
1,96,000
Retirement Gratuity fund
Trade payables
1,40,000
3.64.000
37,80,000
56,000
2.24.000
15,96,000
Beta Ltd.is absorbed by Alex Ltd. on the following terms:
(a) 10% Preference Shareholders are to be paid at 10% premium by issue of 8% Preference Shares of
Alex Ltd.
(b) Goodwill of Beta Ltd. is valued at 1,40,000, Buildings are valued at 4,20,000 and the Machinery
at 4,48,000.
(c) Inventory to be taken over at 10% less value and Provision for Doubtful Debts to be created @
7.5%.
(d) Equity Shareholders of Beta Ltd. will be issued Equity Shares of Alex Ltd. @ 5% premium.
You are required to:
(a) Prepare necessary Ledger Accounts to close the books of Beta Ltd.
(b) Prepare the acquisition entries in the books of Alex Ltd.
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