Model: When the vendor company holds shares in purchasing company—Net payment method X Ltd. absorbs Y Ltd. by payment of 5 shares of Rs.10 each at a premium of 10% for every 4 shares in Y Ltd. The balance sheet of Y Ltd. as on the date of absorption is shown in the following:
|
Liabilities |
Assets |
||
|
Share Capital Z 10 Each |
4,00,000 |
Fixed Assets |
3,60,000 |
|
General Reserve |
40,000 |
8,000 Shares in X Ltd. |
80,000 |
|
Creditors |
1,20,000 |
Current Assets |
1,20,000 |
|
5,60,000 |
5,60,000 |
You are required to:
- Prepare necessary ledger accounts in the books of Y Ltd.
- Give acquisition entries in the books of X Ltd.