model net assets method and net payments method the balance sheet of pq ltd as on 31 620681

Model: Net assets method and net payments method The balance sheet of PQ Ltd. as on 31 March 2011 is as follows:

RS Ltd. signified their agreement to take over the assets and liabilities of PQ Ltd. as per the following terms & conditions:

1. Fixed assets at 80% of book value
2. Investments at 20% above the par value
3. Current assets and liabilities at book value except that stock-in-trade at cost amounting to Rs.10 lakh was agreed to be taken over at a discount of 25%
4. 10% Debentures are to be discharge at a premium of 10% by issuing 10% debentures of Rs.Ltd.
5. Preference shareholders are to be discharged at a premium of 10% by issuing 12% preference shares of Rs.100 each
6. The equity shareholders in PQ Ltd. are to be issued 6 equity shares of Rs.10 each in RS Ltd. for every 2 shares held by them Workout the consideration for the take over under: (a) Net assets method and (b) Net payment method