Model: Accounting in the books of transferor company The balance sheets of X Ltd. and Y Ltd. were as follows on 31 March 2011:
|
X Ltd. |
Y Ltd. |
|
|
Assets: |
||
|
Goodwill |
— |
350 |
|
Patents |
1,000 |
— |
|
Land & Buildings |
3,000 |
— |
|
Plant & Machinery |
7,750 |
— |
|
Motor Vehicles |
— |
200 |
|
Furniture |
— |
125 |
|
Investments |
0,575 |
— |
|
Stocks |
1,750 |
1,195 |
|
Debtors |
400 |
310 |
|
Cash at Bank |
22 |
85 |
|
14,700 |
2,265 |
|
|
Liabilities: |
||
|
Share Capital: 25,000 Pref. Shares of Rs.100 Each |
2,500 |
— |
|
7,50,000 Equity Shares of Rs.10 Each |
7,500 |
— |
|
2,00,000 Equity Shares of Rs.10 Each |
— |
2,000 |
|
10,000 |
2,000 |
|
|
General Reserve |
4,000 |
— |
|
Profit and Loss A/c |
450 |
160 |
|
Creditors |
250 |
105 |
|
14,700 |
2,265 |
A new company Z Ltd. was formed to acquire the assets and liabilities of X Ltd. and Y Ltd. The terms of acquisition of business were as follows:
- Z Ltd. to have an authorized capital of Rs.1,75,00,000 divided into 25,000 12% preference shares of Rs.100 each and 15,00,000 lakh equity shares of Rs.10 each Business of X Ltd. valued at Rs.1,50,00,000; settlement being Rs.30,00,000 cash and balance by issue of fully paid equity shares of Rs.12 each
- Business of Y Ltd. valued at Rs.24,00,000 to be settled by issue of fully paid equity shares of Rs.12 each
- Preference shares of X Ltd. were redeemed
You are required to make journal entries in the books of X Ltd. and Y Ltd. to close their books of account and also show the necessary ledger Accounts.