Model: Absorption—Fraction of shares The following are the balance sheets of X Ltd. and Y Ltd. as on 31 March 2011:
|
Liabilities |
X Ltd. |
Y Ltd. |
Assets |
X Ltd. |
Y Ltd. |
|
Share Capital: |
|||||
|
Share of Rs. 10 Each |
8,00,000 |
16,00,000 |
Fixed Assets |
9,60,000 |
20,00,000 |
|
General Reserve |
3,20,000 |
4,80,000 |
Debtors |
1,60,000 |
80,000 |
|
Profit and Loss A/c |
80,000 |
— |
Stock |
2,40,000 |
3,20,000 |
|
Sundry Creditors |
2,40,000 |
4,00,000 |
Cash |
80,000 |
80,000 |
|
14,40,000 |
24,80,000 |
14,40,000 |
24,80,000 |
Y Ltd. agreed to absorb X Ltd. on the following terms:
- Y Ltd. to give one share of Rs.10 each as an agreed value of Rs.30 per share for every three shares in X Ltd. The shares of Y Ltd. are quoted in the market at Rs.45 per share.
- The trade liability is to be taken over.
You are required to prepare:
- Journal entries in the books of Y Ltd.
- Balance sheet of Y Ltd. after absorption assuming the amalgamation is in nature of purchase