M Ltd. and N Ltd. propose to amalgamate. Their balance sheets as on 31 December 2010 were as follows:
|
Liabilities |
M Ltd. |
N Ltd. |
Assets |
M Ltd. |
N Ltd. |
|
? |
? |
? |
? |
||
|
Equity Share Capital |
16,00,000 |
6,00,000 |
Fixed Assets |
13,20,000 |
4,00,000 |
|
General Reserve |
7,20,000 |
60,000 |
investments |
2,88,000 |
— |
|
Profit & Loss A/c |
2,40,000 |
92,000 |
(Face Value Z 3,20,000) |
||
|
Creditors |
4,18,000 |
98.000 |
Stock |
6,40,000 |
1,62,000 |
|
Debtors |
3,74,000 |
200,000 |
|||
|
Cash |
sistwou |
66,0(X) |
|||
|
29,78,000 |
8,50,000 |
29,78,000 |
8,50,000 |
|
Profit After Tax Year |
M Ltd. Rs. |
N Ltd. Rs. |
|
2010 |
4,92,000 |
1,66,000 |
|
2009 |
4,38,000 |
1,25,600 |
|
2008 |
3,96,000 |
1,08,000 |
Goodwill may be taken at 4 years purchase of average super profits of 3 years from trading on the basis of 10% normal trading profit on closing capital invested.