Model: Amalgamation in the nature of merger and purchase—Preparation of balance sheet The following are the abridged balance sheets of C Ltd. and D Ltd. as on 31 March 2011:
|
Liabilities |
C Ltd. |
D Ltd. |
Assets |
C Ltd. |
D Ltd. |
|
Equity Share Capital of |
40,000 |
15,000 |
Fixed Assets |
55,000 |
23,650 |
|
Rs. 100 Each |
Current Assets |
20,000 |
9,850 |
||
|
12% Preference Shares of |
— |
5,000 |
|||
|
Rs. 100 Each |
|||||
|
General Reserve |
23,050 |
4,900 |
|||
|
Statutory Reserve |
1,950 |
625 |
|||
|
Profit & Loss A/c |
1815 |
1,775 |
|||
|
14% Debentures |
— |
1,250 |
|||
|
Current Liabilities |
1185 |
4,950 |
|||
|
75,000 |
33,500 |
75,000 |
33,500 |
On 1 April 2011, C Ltd. takes over D Ltd. on the following terms:
- C Ltd. will issue 1,75,000 equity shares of Rs.100 each at par to equity shareholders of D Ltd.
- C Ltd. will issue 55,000 12% preference shares of Rs.100 each at par to the preference shareholders of D Ltd.
- The debentures of D Ltd. will be converted into an equal number of 15% debentures of the same denomination. You are informed that the statutory reserves of D Ltd. are to be maintained for two more years.
You are required to show the balance sheet of C Ltd. immediately after the above-mentioned scheme of amalgamation has been implemented assuming that:
- The amalgamation is in the nature of merger
- The amalgamation is in the nature of purchase