ABC Ltd. decided to absorb XYZ Ltd. as on 30 September 2010. The summarized balance sheet of XYZ Ltd. was as follows:
|
Liabilities |
Assets |
(Rs. 000) |
|
|
Share Capital: |
Fixed Assets: |
||
|
30,000 Equity |
3,000 |
Land & Buildings |
1,800 |
|
Shares of Rs. 100 |
Furniture |
150 |
|
|
Each |
Plant & |
3,330 |
|
|
General Reserve |
1,500 |
Machinery |
|
|
Profit and Loss |
720 |
Current Assets: |
420 |
|
A/c |
Stock |
210 |
|
|
5% Debentures |
600 |
Sundry Debtors |
60 |
|
Sundry Creditors |
180 |
Cash at Bank |
30 |
|
Cash in hand |
|||
|
6,000 |
6,000 |
ABC Ltd. agreed to take over all the assets and liabilities including debentures of XYZ Ltd. The current assets were to be taken over at their book value but the fixed assets were revalued as follows:
|
(Rs. in 000’s) |
|
|
Land & Buildings |
2,100 |
|
Furniture |
90 |
|
Plant and Machinery |
3,600 |
|
Goodwill to Be Valued at |
300 |
The purchase consideration was paid at Rs.1,530 thousand in cash and the balance in fully paid equity shares of ABC Ltd.
The absorption was duly carried out on 1 October 2010 and the expenses of absorption amounted to Rs.30,000 paid by XYZ Ltd.
You are required to show the journal entries in the books of XYZ Ltd.