Success Ltd was formed to acquire the business of R and S who share profits in the ratio of 2:1, respectively. The Balance Sheet of R and S on Dec 30, 2009 was as follows.

Liabilities

Rs

Assets

Rs

Bills Payable

34,400

Land and Buildings

80,000

Sundry Creditors

43,200

Machinery

40,000

Mrs. R”s Loan

6,400

Stock

48,000

Capitals:

Debtors

46,400

R 1,28,000

Bills Receivable

32,800

S 80,000

2,08,000

Investments

9,600

Cash at Bank

19,200

Goodwill

16,000

2,92,000

2,92,000

It was agreed by the company to take over the assets at book value with the exception of Land and Buildings and Stock which are taken over at Rs 80,000 and Rs 50,000, respectively. The investments are retained by the firm and sold by the firm for Rs 8,000. They also discharged the loan of Mrs. R. The company takes over the remaining liabilities. The value of goodwill is fixed at Rs 57,600.

The purchase consideration is discharged as follows: 20,000 equity shares of Rs 10 each and the balance in cash. Close the books of the firm.