(Where consideration is not given in the problem).
Woodlands Ltd., registered with a capital of Rs.10,00,000 in equity shares of Rs.10 each acquired the business of M/s A and B, the Balance Sheet of whom at the date o f acquisition was as follows:
|
Liabilities |
Rs |
Assets |
Rs |
|
Bills Payable |
16,000 |
Cash at Bank |
29,000 |
|
Sundry Creditors |
30,000 |
Bills Receivable |
13,000 |
|
Reserve |
14,000 |
Sundry Debtors |
48,000 |
|
Capital Accounts: |
|
Stock |
18,000 |
|
A 70,000 |
|
Furniture and Fixtures |
2,000 |
|
B 70,000 |
1,40,000 |
Plant and Machinery |
40,000 |
|
|
|
Land and Buildings |
50,000 |
|
|
2,00,000 |
|
2,00,000 |
The assets and liabilities were subject to the following revaluation:
Plant and Machinery to be depreciated by 10%
Furniture and Fittings to be depreciated by 15%
Land and Buildings to be appreciated by 20%
A provision to be made for bad debts on debtors @ 2 1/2%
Goodwill of the firm was valued at Rs.24,000.
The consideration was to be discharged as follows:
(i) Allotment of 10,000 Equity Shares of Rs.10 each at Rs.12 each.
(ii) Allotment of 500 14% Debentures of Rs.100 each at a discount of 10%.
(iii) Balance in cash.
The cost of acquisition of the company amounted to Rs.5,000.
You are required to show the journal entries in the books of the company and prepare the opening balance sheet of the company after the acquisition.