Star Ltd. and Moon Ltd. had been carrying on business independently. They agreed to amalgamate and form a new company Neptune Ltd. with an authorised share capital of $2,00,000 divided into 40,000 equity shares of $5 each. On 31st March, 2016, the respective financial position of Star Ltd. and Moon Ltd. were as follows: Moon Ltd. $ 1,82,500 83,875 Star Ltd. $ 3,17,500 1,63,500 Fixed Assets Current Assets 4,81,000 2,98,500 2,66,375 90,125 Less : Current Liabilities 1,82,500 1,76,250 Representing Capital Additional Information : (a) Revalued figures of Fixed and Current Assets were as follows : Star Ltd. Мoon Ltd. $ 3,55,000 1,49,750 1,95,000 78,875 Fixed Assets. Current Assets (b) The debtors and creditors include $ 21,675 owed by Star Ltd. to Moon Ltd. The purchase consideration is satisfied by issue of the following shares and debentures: (i) 30,000 equity shares of Neptune Ltd. to Star Ltd. and Moon Ltd. in the proportion to the profitability of their business based on the average net profit during the last three years which were as follows: Star Ltd. Moon Ltd. $ 2,24,788 (1,250) 1,88,962 1,36,950 1,71,050 1,79,500 2013-14 Profit 2014-15 (Loss)/Profit 2015-16 Profit You are required to compute the amount of shares to be issued to Star Ltd. and Moon Ltd. and a Balance Sheet of Neptune Ltd. showing the position immediately after amalgamation.
Star Ltd. and Moon Ltd. had been carrying on business independently. They agreed to amalgamate and form a new company Neptune Ltd. with an authorised share capital of $2,00,000 divided into 40,000 equity shares of $5 each. On 31st March, 2016, the respective financial position of Star Ltd. and Moon Ltd. were as follows: Moon Ltd. $ 1,82,500 83,875 Star Ltd. $ 3,17,500 1,63,500 Fixed Assets Current Assets 4,81,000 2,98,500 2,66,375 90,125 Less : Current Liabilities 1,82,500 1,76,250 Representing Capital Additional Information : (a) Revalued figures of Fixed and Current Assets were as follows : Star Ltd. Мoon Ltd. $ 3,55,000 1,49,750 1,95,000 78,875 Fixed Assets. Current Assets (b) The debtors and creditors include $ 21,675 owed by Star Ltd. to Moon Ltd. The purchase consideration is satisfied by issue of the following shares and debentures: (i) 30,000 equity shares of Neptune Ltd. to Star Ltd. and Moon Ltd. in the proportion to the profitability of their business based on the average net profit during the last three years which were as follows: Star Ltd. Moon Ltd. $ 2,24,788 (1,250) 1,88,962 1,36,950 1,71,050 1,79,500 2013-14 Profit 2014-15 (Loss)/Profit 2015-16 Profit You are required to compute the amount of shares to be issued to Star Ltd. and Moon Ltd. and a Balance Sheet of Neptune Ltd. showing the position immediately after amalgamation.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Star Ltd. and Moon Ltd. had been carrying on business independently. They
agreed to amalgamate and form a new company Neptune Ltd. with an authorised share capital of
$2,00,000 divided into 40,000 equity shares of $5 each.
On 31st March, 2016, the respective financial position of Star Ltd. and Moon Ltd. were as follows:
Star Ltd.
Moon Ltd.
$
3,17,500
1,63,500
$
1,82,500
83,875
Fixed Assets
Current Assets
4,81,000
2,98,500
2,66,375
90,125
Less : Current Liabilities
1,82,500
1,76,250
Representing Capital
Additional Information :
(a) Revalued figures of Fixed and Current Assets were as follows :
Мoon Ltd.
$
Star Ltd.
$
3,55,000
1,49,750
1,95,000
78,875
Fixed Assets
Current Assets
(b) The debtors and creditors include $ 21,675 owed by Star Ltd. to Moon Ltd.
The purchase consideration is satisfied by issue of the following shares and debentures:
(i) 30,000 equity shares of Neptune Ltd. to Star Ltd. and Moon Ltd. in the proportion to the profitability
of their business based on the average net profit during the last three years which were as follows:
Star Ltd.
Моon Ltd.
2$
2,24,788
(1,250)
1,88,962
1,36,950
1,71,050
1,79,500
2013-14 Profit
2014-15 (Loss)/Profit
2015-16 Profit
Tou are required to compute the amount of shares to be issued to Star Ltd. and Moon Ltd. and a
Balance Sheet of Neptune Ltd. showing the position immediately after amalgamation.
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