The following is the financial position of X Ltd and Y Ltd on 31-3-20012 Liabilities Equity shares of $100 each 6% debentures of 20,000 $10 each Reserve fund X Ltd ($) Y Ltd ($) X Ltd ($) Y Ltd ($) Assets Land and Building 100,000 60,000 30,000 Plant and Machinery 110,000 50,000 34,000 Stock 16,000 14,000 8000 Dividend 4000 Debtors 9000 equalization fund Employee's PF Creditors P/LA/C 3000 Cash 3000 1000 10,000 8000 2000 173,000 68,000 173,000 68,000
The following is the financial position of X Ltd and Y Ltd on 31-3-20012 Liabilities Equity shares of $100 each 6% debentures of 20,000 $10 each Reserve fund X Ltd ($) Y Ltd ($) X Ltd ($) Y Ltd ($) Assets Land and Building 100,000 60,000 30,000 Plant and Machinery 110,000 50,000 34,000 Stock 16,000 14,000 8000 Dividend 4000 Debtors 9000 equalization fund Employee's PF Creditors P/LA/C 3000 Cash 3000 1000 10,000 8000 2000 173,000 68,000 173,000 68,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The two companies agreed to amalgamate to form a new company called Z Ltd. The authorized capital of Z Ltd is 100,000 equity shares of $10 each.
The assets of X Ltd are taken over at a reduced valuation of 10% with the exemption of land and building which are accepted at bookvalue.
Both the companies to receive 5% of the valuation of their respective. Business as goodwill . The entire purchase price is to be paid by Z ltd in fully paid shares.in return for debentures in X Ltd. Debentures of the same amount and denomination are to be issued by Z ltd.
Calculate the purchase consideration.
Transcribed Image Text:The following is the financial position of X Ltd and Y Ltd on 31-3-20012
Liabilities
X Ltd ($)
Y Ltd ($)
X Ltd ($)
Y Ltd ($)
Assets
Equity shares of
$100 each
6% debentures of 20,000
$10 each
Reserve fund
100,000
60,000
Land and Building
30,000
Plant and Machinery
110,000
50,000
34,000
Stock
16,000
8000
Dividend
4000
Debtors
14,000
9000
equalization fund
Employee's PF
Creditors
3000
Cash
3000
1000
10,000
8000
P/L A/C
2000
173,000
68,000
173,000
68,000
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