Advance Accounting - Amalgamation 20 PDF

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Introduction
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Forms of Amalgamation
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(a) Merger
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A Ltd.
C Ltd.
B Ltd. Merger
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(b) Acquisition
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Reliance Industries
Limited
Reliance Industries
Limited
Reliance Petroleum
Limited Acquisition
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Real Life Focus

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Motive for Amalgamation

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bnbmhbnbufe!foujuz!xjmm!cf!cfuufs!qptjujpofe!up!nffu!uiftf!jodsfbtfe!sftpvsdf!sfrvjsfnfout/
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Requirement of the Companies Act, 2013 in Respect of Mergers / Amalgamation

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Merger of Listed Companies with Unlisted Companies
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Fast-track Merger or Amalgamation
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Procedures
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Accounting for Amalgamation

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Types of Amalgamation
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Amalgamation in the Nature of Merger
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usbotgfsff!dpnqboz!xipmmz!cz!uif!jttvf!pg!frvjuz!tibsft!jo!uif!usbotgfsff!dpnqboz-!fydfqu!uibu!dbti
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Amalgamation in the Nature of Purchase
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Calculation of Purchase Consideration
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Points to Remember
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)3* Dpotjefsbujpo!gps!efcfouvsfipmefst!xjmm!opu!cf!jodmvefe!jo!uif!qvsdibtf!dpotjefsbujpo/
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Illustration 1
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Balance Sheets of X Co. Ltd. and Y Co. Ltd. as at 31st March, 2018
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! ! ! ! ! ! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 2-21-111 61-111
! ! ! ! ! ! )jj*!!Joubohjcmf!Bttfut!Ð!Hppexjmm 41-111 31-111
)3*!Dvssfou!Bttfut!;
)b*!Dvssfou!Jowftunfout Ð Ð
)c*!Jowfoupsjft 71-111 46-111
)d*!Usbef!Sfdfjwbcmft 71-111 31-111
)e*!Dbti!boe!Dbti!Frvjwbmfout 51-111 26-111
UPUBM 5-51-111 3-26-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm
Qbsujdvmbst Y!Dp/!Mue/ Z!Dp/!Mue/

Bvuipsjtfe!Dbqjubm!;
///!!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! @! ! ! ! !
///!Qsfgfsfodf!Tibsft!pg!!///!fbdi @! ! ! ! ! @! ! ! ! !
@! ! ! ! ! @! ! ! ! !
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!;
21-111!Frvjuz!Tibsft!pg!!41!fbdi!gvmmz!qbje 4-11-111 Ð
21-111!Frvjuz!Tibsft!pg!!26!fbdi!gvmmz!qbje Ð 2-61-111
4-11-111 2-61-111
Uif!uxp!dpnqbojft!efdjefe!up!bnbmhbnbuf!joup!b!ofx!dpnqboz![!Dp/!Mue/!xijdi!xjmm!ublf!pwfs!uif!bttfut!boe!mjbcjmjujft
pg!uiftf!dpnqbojft!bu!uif!gpmmpxjoh!ufsnt!;
Y!Dp/!Mue/!;!Ipmefst!pg!fbdi!tibsf!pg!!41!fbdi!jo!uif!dpnqboz-!xpvme!sfdfjwf!7!frvjuz!tibsft!pg!!6!fbdi!gvmmz!qbje
boe!!6!jo!dbti/
Z!Dp/!Mue/!;!Ipmefst!pg!fbdi!tibsf!pg!!26!fbdi!jo!uif!dpnqboz-!xpvme!sfdfjwf!pof!23&!qsfgfsfodf!tibsf!pg!!21!fbdi
gvmmz!qbje.vq!boe!!21!jo!dbti/
Uif!mjrvjebujpo!fyqfotft!pg!uif!uxp!dpnqbojft!!3-111!boe!!2-111!sftqfdujwfmz!xfsf!nfu!cz!uif!ofx!dpnqboz/
Zpv!bsf!sfrvjsfe!up!dbmdvmbuf!qvsdibtf!dpotjefsbujpo!pg!fbdi!dpnqboz!tfqbsbufmz/
Npefso!Bddpvoubodz - II!!!31/:
Solution Calculation of Purchase Consideration

Y!Dp/!Mue/ Z!Dp/!Mue/
)j*! Ipmefs!pg!fbdi!Frvjuz!Tibsf!pg!!41!fbdi!xjmm!hfu )j*! Ipmefs!pg!fbdi!Frvjuz!Tibsf!pg!!26!fbdi!xjmm!hfu
! ! !7!Frvjuz!Tibsft!pg!!6!fbdi!jo![!Dp/!Mue/ ! ! !pof!23&!Qsfgfsfodf!Tibsf!pg!!21!fbdi!gvmmz!qbje
! ! !j/f/-!!4-11-111!0!41!!7!!!6 4-11-111 ! ! !j/f/-!2-61-111!0!26!!!21 2-11-111
)jj*! Ipmefs!pg!fbdi!Frvjuz!Tibsf!pg!!41!fbdi!xjmm!hfu! )jj*! Ipmefs!pg!fbdi!Frvjuz!Tibsf!pg!!26!fbdi!xjmm!
! ! !!6!jo!dbti!j/f/-!!4-11-111!0!41!!!6 61-111 ! ! !!hfu!dbti!pg!!21!fbdi!j/f/-!!2-61-111!0!26!!!21 2-11-111
Upubm 4-61-111 Upubm 3-11-111
Opuf!;!Mjrvjebujpo!fyqfotft!bsf!opu!jodmvefe!xijmf!dbmdvmbujoh!Qvsdibtf!Dpotjefsbujpo/
Illustration 2
Uif!Usjbm!Cbmbodft!pg!Tubs!Mjnjufe!boe!Nppo!Mue/!bt!po!42tu!Nbsdi-!3129!jt!bt!voefs!;
Tubs!Mue/ Nppo!Mue/
Qbsujdvmbst Es/ Ds/ Es/ Ds/

Frvjuz!Tibsft!pg!!21 3-21-111 2-61-111
:&!Sfeffnbcmf!Qsfgfsfodf!Tibsft!pg!!211!fbdi :1-111
Tfdvsjujft!Qsfnjvn 21-611
Dbqjubm!Sfefnqujpo!Sftfswf 71-111
Hfofsbm!Sftfswf 5:-611 86-111
9&!Efcfouvsft 71-111 :1-111
Hppexjmm 26-111
Mboe Ð 41-111
Cvjmejoh Ð 86-111
Qmbou 4-11-111 2-46-111
Gjyuvsft 6-111 26-111
Wfijdmft 21-111 26-111
Jowfoupsjft 2-31-111 86-111
Efcupst 91-111 61-111
Bewbodft 61-111 46-111
Dbti!'!Cbol 31-111 31-111
Dsfejupst 2-31-111 2-46-111
7-11-111 7-11-111 5-61-111 5-61-111
Po!2tu!Bqsjm-!3129!Tvo!Mue/!xbt!gpsnfe!cz!bnbmhbnbujoh!Tubs!Mue/!boe!Nppo!Mue/!po!uif!gpmmpxjoh!ufsnt!;
2/ Tvo!Mue/!up!jttvf!71!Ð!21&!Efcfouvsft!pg!!2-111!fbdi!up!Efcfouvsfipmefst!pg!Tubs!Mue/
3/ Uif!Efcfouvsfipmefst!pg!Nppo!Mue/!jotjtufe!uibu!uifz!tipvme!cf!bmmpuufe!frvjuz!tibsft!jo!Tvo!Mue/!Bddpsejohmz-
uifz!xfsf!bmmpuufe!:-111!frvjuz!tibsft!pg!!21!fbdi/
4/ Qsfgfsfodf!tibsfipmefst!pg!Tubs!Mue/!jotjtufe!gps!bmmpunfou!pg!:11!Ð!22&!Sfeffnbcmf!qsfgfsfodf!tibsft!pg
!211!fbdi/
5/ Uif!Frvjuz!tibsfipmefst!pg!Tubs!Mue/!bsf!up!cf!bmmpuufe!21!frvjuz!tibsft!bu!qbs!gps!8!frvjuz!tibsft!ifme!cz!uifn/
Uif!tibsft!pg!Tvo!Mue/!bsf!pg!!21!fbdi/
6/ Uif!frvjuz!tibsfipmefst!pg!Nppo!Mue!xjmm!hfu!;
)b*!7!frvjuz!tibsft!pg!Tvo!Mue!bu!qbs!gps!6!frvjuz!tibsft!ifme!cz!uifn<
)c*!B!dbti!qbznfou!pg!!3!qfs!tibsf!pg!Nppo!Mue/
Zpv!bsf!sfrvjsfe!up!tipx!Qvsdibtf!Dpotjefsbujpo!qbzbcmf!up!Tubs!Mue!boe!Nppo!Mue/!Ð!bt!qfs!BTÐ25/
Solution Calculation of Purchase Consideration of Star Ltd.
Qbsujdvmbst
)j*!:11-!22&!Qsfgfsfodf!Tibsft!pg!!211!fbdi :1-111
È 3-21-111 21 Ø 4-11-111
)jj*!Gps!8!Frvjuz!Tibsft!pg!Tubs!Mue/-!21!Frvjuz!Tibsft!pg!!21!fbdi!xjmm!cf!bmmpuufe-!j/f/-!É !!!! !!!!21Ù
Ê 21 8 Ú
! ! ! ! ! ! Upubm 4-:1-111
31/21!!!Bnbmhbnbujpo
Calculation of Purchase Consideration of Moon Ltd.

Qbsujdvmbst
È 2-61-111 7 Ø 2-91-111
)j*!Gps!6!Frvjuz!Tibsft!pg!Nppo!Mue/-!7!Frvjuz!Tibsft!pg!!21!fbdi!xjmm!cf!bmmpuufe-!j/f/-!É !!!! !!!!21Ù
Ê 21 6 Ú
)jj*!Dbti!qbznfou!pg!!3!qfs!tibsf-!j/f/-!)26-111!y!!3* 41-111
! ! ! ! ! ! Upubm 3-21-111
Uvupsjbm!Opuf!;!Ju!tipvme!cf!opufe!uibu!dpotjefsbujpo!gps!efcfouvsfipmefst!xjmm!opu!cf!jodmvefe!jo!uif!Qvsdibtf!Dpotjefsbujpo/!Uiftf
efcfouvsft!xjmm!cf!ublfo!pwfs!cz!Tvo!Mue!boe!uifo!uiftf!bsf!up!cf!ejtdibshfe/
Illustration 3
Sbkojhboeib!Mue!jt!bctpscfe!cz!Wbtvoeibsb!Mue-!uif!dpotjefsbujpo!cfjoh!uif!ublfpwfs!pg!mjbcjmjujft<!uif!qbznfou!pg!dptu
pg!bctpsqujpo!opu!fydffejoh!!31-111!)bduvbm!dptu!!28-111*<!uif!qbznfou!pg!uif!efcfouvsft!pg!!2-11-111!bu!b!qsfnjvn!pg
21&!jo!:&!efcfouvsft!jttvfe!bu!qbs<!boe!uif!qbznfou!pg!!27!qfs!tibsf!jo!dbti!boe!bmmpunfou!pg!pof!25&!qsfgfsfodf!tibsf
pg!!21!fbdi!boe!tjy!frvjuz!tibsft!pg!!21!fbdi!gvmmz!qbje!gps!fwfsz!gpvs!tibsft!jo!Sbkojhboeib!Mue/!Uif!ovncfs!pg!tibsft
pg!uif!wfoeps!dpnqboz!bsf!3-11-111!pg!!21!fbdi!gvmmz!qbje/
Dbmdvmbuf!qvsdibtf!dpotjefsbujpo!bt!qfs!Bddpvoujoh!TuboebseÐ25/
Qbsujdvmbst
Frvjuz!Tibsfipmefst!;
Dbti!Ð!!27!y!3-11-111 43-11-111
25&!Qsfgfsfodf!Tibsft!Ð!3-11-111!0!5!y!!!21 6-11-111
Frvjuz!Tibsft!Ð!3-11-111!0!5!y!7!0!!21 41-11-111
Upubm 78-11-111
Opuf!;!Qbznfou!pg!dptu!pg!bctpsqujpo!boe!qbznfou!up!efcfouvsfipmefst!bsf!opu!jodmvefe!xijmf!dbmdvmbujoh!qvsdibtf!dpotjefsbujpo/
Methods of Accounting for Amalgamation

Uifsf!bsf!uxp!nbjo!nfuipet!pg!bddpvoujoh!gps!bnbmhbnbujpot!;
)b*!Uif!Qppmjoh!pg!Joufsftut!Nfuipe<!boe
)c*!Uif!Qvsdibtf!Nfuipe/
Ju! tipvme! cf! opufe! uibu! uif! Bddpvoujoh! Tuboebse! efbmt! xjui! uif! bddpvoujoh!qspdfevsft! pomz! jo! uif! cpplt! pg! uif
usbotgfsff!dpnqboz/!Tp!gbs!bt!uif!cpplt!pg!uif!usbotgfsps!dpnqboz!bsf!dpodfsofe-!uif!opsnbm!qspdfevsft!bsf!up!cf
gpmmpxfe!gps!dmptjoh!uif!cpplt!pg!bddpvou!uispvhi!Sfbmjtbujpo!Bddpvou/
Pooling of Interests Method

Qppmjoh!nfuipe!pg!bddpvoujoh!jt!bqqmjdbcmf!gps!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Nfshfs!)j/f/-!xifo!bmm!gjwf
dpoejujpot!tubufe!bcpwf!bsf!tbujtgjfe*/
Characteristics of Pooling of Interests Method
2/ Qppmjoh! pg! joufsftut! bddpvoujoh! usfbut! bo! bnbmhbnbujpo! bt! b! Óopo.fwfouÔ-! jo! uibu! uif! dpncjojoh
dpnqbojft!bsf!wjfxfe!bt!jg!uifz!bmxbzt!ibe!cffo!uphfuifs/
3/ Uif!vojrvf!buusjcvuft!pg!qppmjoh!pg!joufsftut!bddpvoujoh!bsf!uif!dbsszgpsxbse!pg!bttfut!boe!mjbcjmjujft
bu!cppl!wbmvft!boe!uif!dbsszgpsxbse!pg!sfubjofe!fbsojoht/
4/ Voefs!qppmjoh!pg!joufsftut!bddpvoujoh-!op!hppexjmm!jt!sfdpsefe!bt!bsjtjoh!gspn!uif!bnbmhbnbujpo/
5/ Bmm!dptut!bttpdjbufe!xjui!uif!bnbmhbnbujpo!ps!xjui!jttvjoh!uif!tibsft!vtfe!jo!uif!bnbmhbnbujpo!bsf
fyqfoefe!bt!jodvssfe<!opof!pg!uif!dptut!pg!csjohjoh!bcpvu!uif!bnbmhbnbujpo!bsf!dbqjubmjtfe/
6/ Voefs!qppmjoh!pg!joufsftut!bddpvoujoh-!uif!dbsszgpsxbse!pg!sfubjofe!fbsojoht!pg!uif!bdrvjsfe!dpnqboz
nbz!hjwf!nbobhfnfou!npsf!gmfyjcjmjuz!xjui!sftqfdu!up!ejwjefoet!tvctfrvfou!up!uif!bnbmhbnbujpo/
Xijmf!nbljoh!bddpvoujoh!fousjft!voefs!uijt!nfuipe-!uif!gpmmpxjoh!nbuufst!tipvme!cf!ublfo!joup!dpotjefsbujpo!;
2/ Bmm!bttfut-!mjbcjmjujft!boe!sftfswft!pg!uif!usbotgfsps!dpnqboz!bsf!sfdpsefe!cz!uif!usbotgfsff!dpnqboz
bu!uifjs!fyjtujoh!dbsszjoh!bnpvout!)bgufs!nbljoh!uif!bekvtunfou!sfrvjsfe!gps!ÓDibohft!jo!Bddpvoujoh
Qpmjdjft!boe!Qsjps!Qfsjpe!boe!Fyusbpsejobsz!JufntÔ*/
3/ Uif!jefoujuz!pg!uif!sftfswft!jt!qsftfswfe!boe!uifz!bqqfbs!jo!uif!gjobodjbm!tubufnfout!pg!uif!usbotgfsff
dpnqboz! jo! uif! tbnf! gpsn! jo! xijdi! uifz! bqqfbsfe! jo! uif! gjobodjbm! tubufnfout! pg! uif! usbotgfsps
dpnqboz/!Uivt-!gps!fybnqmf-!uif!Hfofsbm!Sftfswf!pg!uif!usbotgfsps!dpnqboz!cfdpnft!uif!Hfofsbm
Sftfswf!pg!uif!usbotgfsff!dpnqboz-!uif!Dbqjubm!Sftfswf!pg!uif!usbotgfsps!dpnqboz!cfdpnft!uif!Dbqjubm
Sftfswf!pg!uif!usbotgfsff!dpnqboz!boe!uif!Sfwbmvbujpo!Sftfswf!pg!uif!usbotgfsps!dpnqboz!cfdpnft
uif!Sfwbmvbujpo!Sftfswf!pg!uif!usbotgfsff!dpnqboz/!Bt!b!sftvmu!pg!qsftfswjoh!uif!jefoujuz-!sftfswft
xijdi!bsf!bwbjmbcmf!gps!ejtusjcvujpo!bt!ejwjefoe!cfgpsf!uif!bnbmhbnbujpo!xpvme!bmtp!cf!bwbjmbcmf!gps
ejtusjcvujpo!bt!ejwjefoe!bgufs!uif!bnbmhbnbujpo/
4/ Uif!ejggfsfodf!cfuxffo!uif!bnpvou!sfdpsefe!bt!tibsf!dbqjubm!jttvfe!)qmvt!boz!beejujpobm!dpotjefsbujpo
jo!uif!gpsn!pg!dbti!ps!puifs!bttfut*!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!uif!usbotgfsps!dpnqboz!jt!bekvtufe
jo!uif!gjobodjbm!tbufnfout!pg!uif!usbogfsff!dpnqboz/
5/ Op!hppexjmm!bddpvou!tipvme!cf!bddpvoufe!gps!bt!b!sftvmu!pg!bnbmhbnbujpo!jo!uif!cpplt!pg!uif!usbotgfsff
dpnqboz/
6/ Uif!cbmbodf!pg!uif!Qspgju!boe!Mptt!Bddpvou!bqqfbsjoh!jo!uif!gjobodjbm!tubufnfout!pg!uif!usbotgfsps
dpnqboz!jt!bhhsfhbufe!xjui!uif!dpssftqpoejoh!cbmbodf!bqqfbsjoh!jo!uif!gjobodjbm!tubufnfout!pg!uif
usbotgfsff!dpnqboz/!Bmufsobujwfmz-!ju!jt!usbotgfssfe!up!uif!Hfofsbm!Sftfswf-!jg!boz/
Accounting Entries in the Books of the Transferee Company
1. For amalgamation of the business
Cvtjoftt!Qvsdibtf!Bddpvou Es/! \xjui!uif!bnpvou!pg!qvsdibtf!dpotjefsbujpo^
! ! ! Up!Mjrvjebups!pg!Usbotgfsps!Dpnqboz!Bddpvou
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!/!/!/!Mue!voefs!uif!tdifnf!pg!bnbmhbnbujpo*
2. For assets, liabilities and resources taken over
Tvoesz!Bttfut!Bddpvout Es/! \Joejwjevbmmz-!bu!cppl!wbmvf^
! ! ! Up!Tvoesz!Mjbcjmjujft!Bddpvou! \Joejwjevbmmz-!bu!cppl!wbmvf^
! ! ! Up!Sftfswft!Bddpvou! \Tff!Opuf!cfmpx^
! ! ! Up!Qspgju!boe!Mptt!Bddpvou
! ! ! Up!Cvtjoftt!Qvsdibtf!Bddpvou! \Xjui!qvsdibtf!dpotjefsbujpo^
)Cfjoh!ejggfsfou!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!voefs!uif!tdifnf!pg!bnbmhbnbujpo*
\Opuf;! Bgufs! bekvtunfou! pg! uif! ejggfsfodf! cfuxffo! uif! bnpvou! sfdpsefe!bt!tibsf!dbqjubm!jttvfe!boe!uif
bnpvou!pg!tibsf!dbqjubm!pg!uif!usbotgfsps!dpnqboz/^
3. For Payment of Purchase Consideration
Mjrvjebups!pg!Usbotgfsps!Dpnqboz!Bddpvou Es/
! ! ! Up!Tibsf!Dbqjubm!Bddpvou! \Jttvfe^
! ! ! Up!Tfdvsjujft!Qsfnjvn!Bddpvou! \Qsfnjvn^
! ! ! Up!Dbti!Bddpvou! \Gps!gsbdujpobm!tibsft!boe!gps!
! ejttfoujoh!tibsfipmefst^
! ! ! Up!Opo.Dbti!Dpotjefsbujpo!Bddpvou! \Gbjs!wbmvf!gps!ejttfoujoh!tibsfipmefst!jo!uif!
! gpsn!pg!efcfouvsft-!fud/^
)Cfjoh!uif!ejtdibshf!pg!qvsdibtf!dpotjefsbujpo*
Accounting Entries in the Books of the Transferor Company

Up!dmptf!uif!cpplt!pg!bddpvou!pg!uif!usbotgfsps!dpnqboz-!uif!gpmmpxjoh!tufqt!bsf!gpmmpxfe!;
Step 1 : Qsfqbsf!uif!Cbmbodf!Tiffu!pg!uif!dpnqboz!po!uif!ebuf!pg!mjrvjebujpo/
Step 2 : Pqfo!b!Sfbmjtbujpo!Bddpvou!boe!usbotgfs!bmm!bttfut!boe!mjbcjmjujft!)fydmvejoh!gjdujujpvt!bttfut*!up
! ! ! ! ! uijt!bddpvou/
Step 3 : Dbmdvmbuf!qvsdibtf!dpotjefsbujpo!po!uif!cbtjt!pg!ufsnt!boe!dpoejujpot!bhsffe!vqpo/
Step 4 : Dsfeju!Sfbmjtbujpo!Bddpvou!cz!qvsdibtf!dpotjefsbujpo/
Step 5 : Dbmdvmbuf!qspgju!ps!mptt!po!sfbmjtbujpo/
Step 6 : Usbotgfs!tibsf!dbqjubm-!sftfswf!boe!tvsqmvt!up!Tvoesz!Tibsfipmefst!Bddpvou/
Step 7 : Usbotgfs!qspgju0mptt!po!sfbmjtbujpo!up!Tvoesz!Tibsfipmefst!Bddpvou/
Step 8 : Sfdfjwjoh!pg!qvsdibtf!dpotjefsbujpo!jo!uif!gpsn!pg!tibsft0efcfouvsft!jo!uif!usbotgfsff!dpnqboz/
Step 9 : Qbznfou!up!qsfgfsfodf!tibsfipmefst/
Step 10 : Ejtusjcvujpo!pg!tibsft0efcfouvsft!pg!usbotgfsff!dpnqboz!bnpoh!fyjtujoh!tibsfipmefst/
Journal
1. For transferring different assets to Realisation Account
Sfbmjtbujpo!Bddpvou Es/
! ! ! Up!Tvoesz!Bttfut!Bddpvou ! ! \Joejwjevbmmz-!bu!cppl!wbmvf^
Points to remember
)b* Gps!uijt!qvsqptf!bhsffe!wbmvbujpot!bsf!bctpmvufmz!jnnbufsjbm/
)c* Hppexjmm-!Qbufout!boe!Usbefnbsl!fud/-!bsf!bmtp!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/
2. For transferring different liabilities to Realisation Account

Mjbcjmjujft!Bddpvou Es/! \Joejwjevbmmz-!bu!cppl!wbmvf^
! ! ! Up!Sfbmjtbujpo!Bddpvou
Points to remember
)b* Jufnt!jo!uif!obuvsf!pg!ÓQspwjtjpotÔ!bsf!up!cf!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!pomz!f/h/-!Fnqmpzfft
Qspwjefou!Gvoe<!Qspwjtjpo!gps!Ubybujpo<!Qfotjpo!Gvoe<!Qspwjtjpo!gps!Cbe!Efcut<!Qspwjtjpo!gps
Efqsfdjbujpo-!fud/
)c* Jufnt! jo! uif! obuvsf! pg! ÓSftfswftÔ! bsf! opu! up! cf! usbotgfssfe! up! Sfbmjtbujpo! Bddpvou/! Uiftf! bsf
usbotgfssfe! ! up! ! Tvoesz! ! Tibsfipmefst! ! Bddpvou/! ! Fybnqmft! ! bsf! ;! Ejwjefoe! Frvbmjtbujpo
Gvoe<Hfofsbm! Sftfswf<! Dbqjubm! Sftfswf<! Sfwbmvbujpo! Sftfswf<! Dbqjubm! Sfefnqujpo! Sftfswf<
Qspgju!boe!Mptt!Bddpvou!Dsfeju!Cbmbodf<!Xpslnfo!Dpnqfotbujpo!Gvoe-!fud//
3. For transferring Equity Share Capital, Reserve and Surplus, etc.

Frvjuz!Tibsf!Dbqjubm!Bddpvou Es/
Hfofsbm!Sftfswf!Bddpvou Es/
Qspgju!boe!Mptt!Bddpvou Es/
! ! ! Up!Tvoesz!Tibsfipmefst!Bddpvou
Opuf!;!Qspgju!boe!Mptt!Bddpvou!efcju!cbmbodf!jt!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou!cz!efcjujoh
Tvoesz!Tibsfipmefst!Bddpvou!boe!dsfejujoh!Qspgju!boe!Mptt!Bddpvou/
4. Like Equity Share Capital, Preference Share Capital is closed by transferring to Preference
Shareholders Account. The entry for this will be :
Qsfgfsfodf!Tibsf!Dbqjubm!Bddpvou Es/
! ! ! Up!Qsfgfsfodf!Tibsfipmefst!Bddpvou
Opuf!;!Jg!uif!qsfgfsfodf!tibsfipmefst!bsf!qbje!npsf!ps!mftt!uibo!uif!bnpvou!evf!up!uifn!bt!qfs!Cbmbodf
Tiffu-!uif!ejggfsfodf!jt!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/
5. For purchase consideration due from transferee company
Usbotgfsff!Dpnqboz!Bddpvou Es/ \Qvsdibtf!dpotjefsbujpo^
6. On receiving purchase consideration from the transferee company
Frvjuz!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/
Qsfgfsfodf!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/
Efcfouvsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/
! ! ! Up!Usbotgfsff!Dpnqboz!Bddpvou
7. Entries for liquidation expenses are passed as follows:
)j*!Jg!uif!mjrvjebujpo!fyqfotft!bsf!cpsof!cz!uif!usbotgfsps!dpnqboz
! ! ! Up!Cbol!Bddpvou
)jj*!Jg!uif!mjrvjebujpo!fyqfotft!bsf!cpsof!cz!uif!usbotgfsff!dpnqboz!\Op!Fousz^
8. For payment to preference shareholders
Qsfgfsfodf!Tibsfipmefst!Bddpvou Es/
! ! ! Up!Qsfgfsfodf!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou
! ! ! Up!Cbol!Bddpvou!)Jg!boz*
9. For loss on realisation
Tvoesz!Tibsfipmefst!Bddpvou Es/
10. For profit on realisation
11. For final payment to Equity Shareholders
! ! ! Up!Frvjuz!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou
! ! ! Up!Cbol!Bddpvou!)Jg!boz*!
Opuf!;!Bgufs!qbznfou!up!frvjuz!tibsfipmefst-!bmm!bddpvout!jo!uif!cpplt!pg!uif!usbotgfsps!dpnqboz!xjmm!cf!dmptfe/
Illustration 4
Uif!gpmmpxjoh!bsf!uif!Cbmbodf!Tiffut!bt!po!42tu!Nbsdi-!3129!pg!Y!Mue/!boe!Z!Mue/
Balance Sheets of X Ltd. and Y Ltd. as at 31st March, 2018
Opuf Y!Mue/ Z!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!211!fbdi!gvmmz!qbje 2-11-111 71-111
)c*!Sftfswft!boe!Tvsqmvt!Ð Hfofsbm!Sftfswf 45-111 Ð
Ejwjefoe!Frvbmjtbujpo!Gvoe 5-111 Ð
Qspgju!boe!Mptt!Bddpvou 3-111 Ð
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!7&!Efcfouvsft!pg!!211!fbdi 31-111 Ð
)b*!Tipsu.ufsn!Cpsspxjoht! Ð Ð
)c*!Usbef!Qbzbcmft!Ð!Usbef!Dsfejupst 21-111 9-111
)d*!Puifs!Dvssfou!Mjbcjmjujft!Ð!Fnqmpzfft!Q/G/ 4-111 Ð
UPUBM 2-84-111 79-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!; Mboe!boe!Cvjmejoh 41-111 Ð
Qmbou!boe!Nbdijofsz 2-21-111 61-111
)d*!Usbef!Sfdfjwbcmft!Ð!Tvoesz!Efcupst 25-111 :-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti 4-111 2-111
UPUBM 2-84-111 79-111
Jo!Bqsjm-!3129-!uif!uxp!dpnqbojft!bhsff!up!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz!dbmmfe![!Mue/!xijdi!ublft!pwfs!uif
bttfut!boe!mjbcjmjujft!pg!cpui!uif!dpnqbojft/!Uif!bvuipsjtfe!Dbqjubm!pg![!Mue/!jt!!21-11-111-!dpotjtujoh!pg!2-11-111!Frvjuz
Tibsft!pg!!21!fbdi/
Uif!qvsdibtf!dpotjefsbujpo!jt!bhsffe!bu!!2-31-111!boe!!71-111!gps!Y!Mue!boe!Z!Mue!sftqfdujwfmz/!!Uif!foujsf!qvsdibtf
dpotjefsbujpo!jt!up!cf!qbje!cz![!Mue/!jo!jut!gvmmz!qbje!tibsft/!Jo!sfuvso!gps!efcfouvsft!jo!Y!Mue/!efcfouvsft!pg!uif!tbnf
bnpvou!boe!efopnjobujpo!bsf!up!cf!jttvfe!cz![!Mue/
Hjwf!Kpvsobm!Fousjft!up!dmptf!uif!cpplt!pg!Y!Mue/!boe!Z!Mue/!boe!tipx!uif!Pqfojoh!fousjft!jo!uif!cpplt!pg![!Mue/!Bmtp
qsfqbsf!uif!pqfojoh!Cbmbodf!Tiffu!pg![!Mue/
Solution In the books of X Ltd.
Journal Dr. Cr.
Ebuf Qbsujdvmbst M/G/
3129 Sfbmjtbujpo!B0d Es/ 2-84-111
Bqs/!2 Up!Mboe!boe!Cvjmejoht!B0d 41-111
Up!Qmbou!boe!Nbdijofsz!B0d! 2-21-111
Up!Jowfoupsjft!B0d 27-111
Up!Tvoesz!Efcupst!B0d 25-111
Up!Dbti!B0d 4-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!bttfut!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!Tdi/!pg!bnbmhbnbujpo*
7&!Efcfouvsft!B0d Es/ 31-111
FnqmpzfftÔ!Q/G/!B0d Es/ 4-111
Usbef!Dsfejupst!B0d Es/ 21-111
Up!Sfbmjtbujpo!B0d 44-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!mjbcjmjujft!up!Sfbmjtbujpo!Bddpvou*
Frvjuz!Tibsf!Dbqjubm!B0d! Es/ 2-11-111
Hfofsbm!Sftfswf!B0d Es/ 45-111
Ejwjefoe!Frvbmjtbujpo!Gvoe!B0d Es/ 5-111
Qspgju!boe!Mptt!B0d Es/ 3-111
Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-51-111
)Cfjoh!uif!usbotgfs!pg!Tibsf!Dbqjubm-!Sftfswf!boe!Tvsqmvt!up!Tibsfipmefst!Bddpvou*
[/!Mue/!B0d Es/ 2-31-111
Up!Sfbmjtbujpo!B0d 2-31-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn![!Mue/*
Tvoesz!Frvjuz!Tibsfipmefst!B0d Es/ 31-111
Up!Sfbmjtbujpo!B0d! )Opuf!2* 31-111
)Cfjoh!uif!mptt!po!sfbmjtbujpo!usbotgfssfe!up!Tvoesz!Frvjuz!Tibsfipmefst!Bddpvou*
Tibsft!jo![!Mue/!B0d! Es/ 2-31-111

Up![!Mue/!B0d 2-31-111
)Cfjoh!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn![!!Mue/*
Tvoesz!Frvjuz!Tibsfipmefst!B0d Es/ 2-31-111
Up!Tibsft!jo![/!Mue/!B0d 2-31-111
)Cfjoh!uif!ejtusjcvujpo!pg!Tibsft!jo![/!Mue/!bnpoh!uif!fyjtujoh!Tibsfipmefst*
In the books of Y Ltd.

Journal Dr. Cr.
3129 Sfbmjtbujpo!B0d Es/ 79-111
Bqs/!2 Up!Qmbou!boe!Nbdijofsz!B0d! 61-111
Up!Tvoesz!Efcupst!B0d :-111
Up!Dbti!B0d 2-111
Usbef!Dsfejupst!B0d Es/ 9-111
)Cfjoh!uif!usbotgfs!pg!Usbef!Dsfejupst!!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!Tdi/!pg!bnbmhbnbujpo*
Frvjuz!Tibsf!Dbqjubm!B0d! Es/ 71-111
Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d 71-111
)Cfjoh!uif!usbotgfs!pg!Tibsf!Dbqjubm!!up!Tibsfipmefst!Bddpvou*
[/!Mue/!B0d Es/ 71-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn![/!!Mue/*
Tibsft!jo![/!Mue/!B0d Es/ 71-111
Up![/!Mue/!B0d 71-111
)Cfjoh!uif!!qvsdibtf!dpotjefsbujpo!sfdfjwfe*
Up!Tibsft!jo![/!Mue/!B0d 71-111
)Cfjoh!uif!ejtusjcvujpo!pg!Tibsft!jo![/!Mue/!bnpoh!uif!fyjtujoh!Tibsfipmefst*
In the books of Z Ltd.

Journal Dr. Cr.
3129 Cvtjoftt!Qvsdibtf!B0d Es/ 2-91-111
Bqs/!2 Up!Mjrvjebups!pg!Y!Mue!B0d 2-31-111
Up!Mjrvjebups!pg!Z!Mue!B0d 71-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebupst!pg!Y!Mue!boe!Z!Mue/!bt!qfs!bhsffnfou!ebufe!!/!/!/*
Mboe!boe!Cvjmejoht!B0d Es/ 41-111
Qmbou!boe!Nbdijofsz!B0d Es/ 2-21-111
Jowfoupsjft!B0d Es/ 27-111
Tvoesz!Efcupst!B0d Es/ 25-111
Dbti!B0d Es/ 4-111
Up!7&!Efcfouvsft!jo!Y!Mue!B0d 31-111
Up!Usbef!Dsfejupst!B0d 21-111
Up!Fnqmpzfft!Q/G/!B0d 4-111
Up!Hfofsbm!Sftfswf!B0d!\Tff!Uvupsjbm!Opuf^ 25-111
Up!Qspgju!boe!Mptt!B0d 3-111
Up!Ejwjefoe!Frvbmjtbujpo!Gvoe!B0d 5-111
Up!Cvtjoftt!Qvsdibtf!B0d 2-31-111
)Cfjoh!uif!bttfut-!mjbcjmjujft-!sftfswf-!Qspgju!boe!Mptt!Bddpvou!ublfo!pwfs!boe!uif!ejggfsfodf
cfuxffo!uif!bnpvou!sfdpsefe!bt!tibsf!dbqjubm!jttvfe!boe!tibsf!dbqjubm!pg!Y!Mue!bekvtufe
bhbjotu!sftfswf**
Qmbou!boe!Nbdijofsz!B0d! Es/ 61-111
Tvoesz!Efcupst!B0d Es/ :-111
Dbti!B0d Es/ 2-111
Up!Usbef!Dsfejupst!B0d 9-111
Up!Cvtjoftt!Qvsdibtf!B0d 71-111
)Cfjoh!uif!bttfut!boe!mjbcjmjujft!ublfo!pwfs*
Mjrvjebups!pg!Y!Mue/!B0d Es/ 2-31-111
Mjrvjebups!pg!Z!Mue/!B0d Es/ 71-111
Up!Frvjuz!Tibsf!Dbqjubm!B0d 2-91-111
)Cfjoh!uif!jttvf!pg!29-111!frvjuz!tibsft!up!usbotgfsps!dpnqbojft!bt!gvmmz!qbje.vq!gps
dpotjefsbujpo!puifs!uibo!dbti*
7&!Efcfouvsft!jo!Y!Mue/!B0d Es/ 31-111
Up!7&!Efcfouvsft!B0d 31-111
)Cfjoh!uif!jttvf!pg!ofdfttbsz!efcfouvsft!up!efcfouvsfipmefst!pg!Y!Mue/*
Uvupsjbm!Opuf!;
Ju!tipvme!cf!opufe!uibu!sftfswf-!ejwjefoe!frvbmjtbujpo!gvoe-!Qspgju!boe!Mptt!Bddpvou!xjmm!cf!dbssjfe!gpsxbse!jo!uif!cpplt!pg![!Mue/
Ipxfwfs-!uif!ejggfsfodf!cfuxffo!uif!bnpvou!sfdpsefe!bt!tibsf!dbqjubm!boe!uif!tibsf!dbqjubm!pg!Y!Mue!xjmm!cf!bekvtufe!bhbjotu!uif
Hfofsbm!Sftfswf/!Uif!bnpvou!up!cf!bekvtufe!ibt!cffo!dbmdvmbufe!bt!gpmmpxt!;
Qbsujdvmbst
Bnpvou!sfdpsefe!bt!Tibsf!Dbqjubm 2-31-111
Mftt;!Tibsf!Dbqjubm!pg!Y!Mue 2-11-111
Bnpvou!up!cf!bekvtufe!jo!Hfofsbm!Sftfswf 31-111
Sftfswf!pg!Y!Mue/ 45-111
Mftt;!Bnpvou!up!cf!bekvtufe!)bt!dbmdvmbufe!bcpwf* 31-111
Cbmbodf!pg!Hfofsbm!Sftfswf!up!cf!tipxo!jo!Cbmbodf!Tiffu!pg![!Mue 25-111
Z Ltd
Balance Sheet as at 1st April, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm )2* 2-91-111
)c*!Sftfswft!boe!Tvsqmvt )3* 31-111
)3*!Tibsf!Bqqmjdbujpo!Npofz!Qfoejoh!Bmmpunfou!; Ð
)b*!Mpoh.ufsn!Cpsspxjoht )4* 31-111
)b*!Tipsu.ufsn!Cpsspxjoht Ð
)c*!Usbef!Qbzbcmft )5* 29-111
)d*!Puifs!Dvssfou!Mjbcjmjujft )6* 4-111
UPUBM 3-52-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)j*! !Ubohjcmf!Bttfut )7* 2-:1-111
)b*!Dvssfou!Jowftunfout Ð
)c*!Jowfoupsjft Ð
)d*!Usbef!Sfdfjwbcmft )8* 35-111
)e*!Dbti!boe!Dbti!Frvjwbmfout )9* 34-111
)f*!Puifs!Dvssfou!Bttfut ):* 52-111
UPUBM 3-52-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )5*!Usbef!Qbzbcmft
Qbsujdvmbst Qbsujdvmbst
Bvuipsjtfe!Dbqjubm!; Usbef!Dsfejupst 29-111
2-11-111!Frvjuz!Tibsft!pg!!21!fbdi 21-11-111 )6*!Puifs!Dvssfou!Mjbcjmjujft
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; FnqmpzfftÔ!Q/G/ 4-111
29-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 2-91-111 )7*!Gjyfe!Bttfut
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!bmmpuufe!bt!gvmmz!qbje Ubohjcmf!Bttfut!;
gps!dpotjefsbujpo!puifs!uibo!dbti Mboe!boe!Cvjmejoh! 41-111
)3*!Sftfswf!boe!Tvsqmvt Qmbou!boe!Nbdijofsz 2-71-111
Hfofsbm!Sftfswf 25-111 2-:1-111
Qspgju!boe!Mptt!Bddpvou 3-111 )8*!Jowfoupsjft 35-111
Ejwjefoe!Frvbmjtbujpo!Gvoe 5-111
31-111 )9*!Usbef!Sfdfjwbcmft
)4*!Mpoh.ufsn!Cpsspxjoht Tvoesz!Efcupst 34-111
Tfdvsfe ):*!Dbti!boe!Dbti!Frvjwbmfout
7&!Efcfouvsft! 31-111 Dbti 5-111
Working Notes :
Dr. (1) Realisation Account Cr.
Qbsujdvmbst Y!Mue/!)* Z!Mue/!)* Qbsujdvmbst Y!Mue/!)* Z!Mue/!)*
Up!Mboe!boe!Cvjmejoht!B0d 41-111 Ð Cz!7&!Efcfouvsft!B0d 31-111 Ð
Up!Qmbou!boe!Nbdijofsz 2-21-111 61-111 Cz!FnqmpzfftÔ!QG!B0d 4-111 Ð
Up!Jowfoupsjft!B0d 27-111 9-111 Cz!Usbef!Dsfejupst!B0d 21-111 9-111
Up!Tvoesz!Efcupst!B0d 25-111 :-111 Cz![!Mue!B0d 2-31-111 71-111
Up!Dbti!B0d 4-111 2-111 Cz!Tvoesz!Tibsfipmefst!B0d 31-111 Ð
2-84-111 79-111 2-84-111 79-111
Illustration 5
Uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bt!bu!2tu!Bqsjm-!3129!bsf!bt!voefs!;
Balance Sheets of A Ltd. and B Ltd. as at 1st April, 2018
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm )2* 2-31-111 2-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð Sftfswf 71-111 61-111
)b*!Usbef!Qbzbcmft!Ð!Dsfejupst 41-111 21-111
UPUBM 3-31-111 2-91-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Mboe!boe!Cvjmejoh 2-51-111 2-31-111
)b*!Jowfoupsjft 41-111 26-111
)c*!Usbef!Sfdfjwbcmft!Ð!Efcupst 21-111 36-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!boe!Cbol 51-111 31-111
UPUBM 3-31-111 2-91-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm
Qbsujdvmbst B!Mue/ C!Mue/

Bvuipsjtfe!Dbqjubm!;
///!!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! @! ! ! ! !
///!Qsfgfsfodf!Tibsft!pg!!///!fbdi @! ! ! ! ! @! ! ! ! !
@! ! ! ! ! @! ! ! ! !
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!;
2-31-111 2-11-111
Uif!bcpwf!uxp!dpnqbojft!bhsff!up!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz!BC!Mue!po!uif!gpmmpxjoh!dpoejujpot;
2/ BC!Mue!xjmm!ublf!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!pg!B!Mue!boe!C!Mue/
3/ Uif!foujsf!qvsdibtf!dpotjefsbujpo!xjmm!cf!tbujtgjfe!cz!uif!jttvf!pg!39-711!frvjuz!tibsft!pg!!21!fbdi!pg!BC!Mue/
4/ Gps!uif!qvsqptf!pg!bnbmhbnbujpo-!uif!wbmvf!pg!fbdi!frvjuz!tibsf!jt!bhsffe!bu!!36!boe!!23/61!gps!B!Mue!boe!C
Mue!sftqfdujwfmz/
5/ Uif!dsfejupst!bsf!up!cf!qbje!pgg!cz!BC!Mue/
Zpv!bsf!sfrvjsfe!up!;
)j*!! Qbtt!kpvsobm!fousjft!up!dmptf!uif!cpplt!pg!B!Mue!boe!C!Mue/<!)jj*!!Qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!BC!Mue<!boe
)jjj*!Qsfqbsf!uif!Cbmbodf!Tiffu!pg!BC!Mue/<!
Solution
Uijt!jt!bo!bnbmhbnbujpo!jo!uif!obuvsf!pg!nfshfs!cfdbvtf!;
)j*!BC!Mue!xjmm!ublf!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!pg!B!Mue!boe!C!Mue/
)jj*!Uif!foujsf!qvsdibtf!dpotjefsbujpo!xjmm!cf!tbujtgjfe!cz!jttvf!pg!frvjuz!tibsft/
Bmmpdbujpo!pg!Qvsdibtf!Dpotjefsbujpo
Ovncfs!pg!tibsft!;!B!Mue!9-111!)!2-31-111!0!26*!C!Mue!21-111!)2-11-111!0!21*
Nbslfu!wbmvf!pg!tibsft!;!B!Mue!Ð!9-111!!!36!>!!3-11-111/!!C!Mue!Ð!21-111!!!23/61!>!!2-36-111/
Uif!upubm!qvsdibtf!dpotjefsbujpo!jt!!39-711!!!21!>!!3-97-111/
!3-97-111!xjmm!cf!tibsfe!cz!B!boe!C!jo!uif!sbujp!pg!3-11-111!;!2-36-111!ps!9!;!6/
Uifsfgpsf-!B!Mue!xjmm!hfu!;!!3-97-111!!9024!>!!2-87-111/!!C!Mue!xjmm!hfu!;!!3-97-111!!6024!>!!2-21-111/
In the books of A Ltd.
Journal Dr. Cr.
Bqs/!2 Up!Mboe!boe!Cvjmejoht!B0d 2-51-111
Up!Efcupst!B0d 21-111
Up!Dbti!boe!Cbol!B0d 51-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfodf!bttfut!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg
bnbmhbnbujpo*
Dsfejupst!B0d Es/ 41-111
)Cfjoh!uif!usbotgfs!pg!dsfejupst!up!Sfbmjtbujpo!Bddpvou*
Frvjuz!Tibsf!Dbqjubm!B0d Es/ 2-31-111
Sftfswf!B0d Es/ 71-111
Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-:1-111
)Cfjoh!uif!usbotgfs!pg!Tibsf!Dbqjubm-!Sftfswf!boe!Qspgju!boe!Mptt!Bddpvou!cbmbodf!up!Tvoesz
Tibsfipmefst!Bddpvou*
BC!Mue!B0d Es/ 2-87-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!BC!Mue/*
Npefso!Bddpvoubodz - II!!!31/2:

Up!Sfbmjtbujpo!B0d!)Opuf!2* 25-111
Tibsft!jo!BC!Mue!B0d Es/ 2-87-111
Up!BC!Mue!B0d 2-87-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn!BC!Mue*
Up!Tibsft!jo!BC!Mue!B0d 2-87-111
)Cfjoh!uif!ejtusjcvujpo!pg!tibsft!jo!BC!Mue!bnpoh!uif!fyjtujoh!tibsfipmefst*
In the books of B Ltd.
Journal Dr. Cr.
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!bttfut!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg
bnbmhbnbujpo*
)Cfjoh!uif!usbotgfs!pg!dsfejupst!up!Sfbmjtbujpo!Bddpvou*
Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-81-111
)Cfjoh!uif!usbotgfs!pg!Tibsf!Dbqjubm-!Sftfswf!boe!Qspgju!boe!Mptt!Bddpvou!cbmbodf!up!Tvoesz
BC!Mue!B0d Es/ 2-21-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!BC!Mue/*
Tibsft!jo!BC!Mue!B0d Es/ 2-21-111
Up!BC!Mue!B0d 2-21-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn!BC!Mue*
Up!Tibsft!jo!BC!Mue!B0d 2-21-111
)Cfjoh!uif!ejtusjcvujpo!pg!tibsft!jo!BC!Mue!bnpoh!uif!fyjtujoh!tibsfipmefst*
In the books of AB Ltd.
Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!B!Mue!B0d 2-87-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!B!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Mboe!boe!Cvjmejoht!B0d Es/ 2-51-111
Efcupst!B0d Es/ 21-111
Dbti!boe!Cbol!B0d Es/ 51-111
Up!Sftfswf!B0d!\!71-111!Ï!)!2-87-111!Ï!2-31-111*^ 5-111
Up!Dsfejupst!B0d 41-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!boe!uif!ejggfsfodf!cfuxffo!tibsf!dbqjubm
jttvfe!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!B!Mue/-!bekvtufe!bhbjotu!sftfswft*
Mjrvjebups!pg!B!Mue!B0d Es/ 2-87-111

)Cfjoh!uif!jttvf!pg!tibsft!bhbjotu!qvsdibtf!dpotjefsbujpo*
Cvtjoftt!Qvsdibtf!B0d Es/ 2-21-111
Up!Mjrvjebups!pg!C!Mue!B0d 2-21-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!C!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Up!Sftfswf!B0d!\!61-111!Ï!)!2-21-111!Ï!2-11-111*^ 51-111
jttvfe!boe!uif!tibsf!dbqjubm!pg!C!Mue-!bekvtufe!bhbjotu!sftfswft*
Mjrvjebups!pg!C!Mue!B0d Es/ 2-21-111
Dsfejupst!B0d!)!41-111!,!21-111* Es/ 51-111
)Cfjoh!uif!dsfejupst!qbje!pgg*
AB Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 4-71-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)j*! !Ubohjcmf!Bttfut )4* 3-71-111
)b*!Jowfoupsjft )5* 56-111
)c*!Usbef!Sfdfjwbcmft )6* 46-111
)d*!Dbti!boe!Dbti!Frvjwbmfout )7* 31-111
UPUBM 4-71-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )4*!Gjyfe!Bttfut
Bvuipsjtfe!Dbqjubm!; Ubohjcmf!Bttfut!;
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! Mboe!boe!Cvjmejoh!!)!2-51-111!,!2-31-111* 3-71-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )5*!Jowfoupsjft!)!41-111!,!26-111* 56-111
39-711!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 3-97-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo )6*!Joubohjcmf!Bttfut!
puifs!uibo!dbti* Tvoesz!Efcupst!)!21-111!,!36-111* 46-111
)3*!Sftfswf!boe!Tvsqmvt )7*!Dbti!boe!Dbti!Frvjwbmfout
Sftfswf!)!5-111!,!51-111* 55-111 Dbti!)!51-111!,!31-111!Ï!51-111* 31-111
Qspgju!boe!Mptt!Bddpvou!)!21-111!,!31-111* 41-111
85-111
Working Notes :
Qbsujdvmbst B!Mue/ C!Mue/ Qbsujdvmbst B!Mue/ C!Mue/

Up!Mboe!boe!Cvjmejoht!B0d 2-51-111 2-31-111 Cz!Dsfejupst!B0d 41-111 21-111
Up!Jowfoupsjft!B0d 41-111 26-111 Cz!BC!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 2-87-111 2-21-111
Up!Efcupst!B0d 21-111 36-111 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 25-111 71-111
Up!Dbti!boe!Cbol!B0d 51-111 31-111
3-31-111 2-91-111 3-31-111 2-91-111
Illustration 6
Uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bt!bu!2/5/3129!bsf!bt!voefs!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 2-61-111 2-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð Qspgju!boe!Mptt!Bddpvou 41-111 71-111
Hfofsbm!Sftfswf 81-111 Ð
)b*!Mpoh.ufsn!Cpsspxjoht!Ð 21&!Efcfouvsft 61-111 Ð
23&!Efcfouvsft Ð 2-11-111
)b*!Usbef!Qbzbcmft 2-11-111 51-111
UPUBM 5-11-111 4-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou!boe!Nbdijofsz 3-41-111 2-21-111
)c*!Jowfoupsjft 91-111 :1-111
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 41-111 31-111
UPUBM 5-11-111 4-11-111
Uif!bcpwf!uxp!dpnqbojft!bhsff!up!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz!BC!Mue!po!uif!gpmmpxjoh!dpoejujpot!;
Gps!cpui!uif!dpnqbojft!Ð
)j* Bo!fydibohf!pg!7!tibsft!jo!BC!Mue!pg!!21!fbdi!bu!qbs!gps!fwfsz!6!tibsft/
)jj* :1&!pg!uif!frvjuz!tibsfipmefst!xjmm!cf!ejtdibshfe!cz!uif!jttvf!pg!frvjuz!tibsft!pg!BC!Mue/!Uif!cbmbodf!21&!xjmm
cf!ejtdibshfe!cz!qbzjoh!dbti!)Bmm!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!bu!cppl!wbmvf*/
Zpv!bsf!sfrvjsfe!up!tipx!;
)2*!uif!dbmdvmbujpo!pg!qvsdibtf!dpotjefsbujpo<!
)3*!Mfehfs!bddpvout!up!dmptf!uif!cpplt<
)4*!kpvsobm!fousjft!jo!uif!cpplt!pg!BC!Mue<!boe!
)5*!Pqfojoh!Cbmbodf!Tiffu!pg!BC!Mue/

Qbsujdvmbst B!Mue/ Qbsujdvmbst C!Mue/

Frvjuz!Tibsft!Ð!26-111!y!:1&!y!706!y!!21 2-73-111 21-111!y!:1&!y!706!y!!21 2-19-111
Dbti!Ð!26-111!y!21&!y!706!y!!21 29-111 21-111!y!21&!y!706!y!!21 23-111
Qvsdibtf!dpotjefsbujpo 2-91-111 Qvsdibtf!dpotjefsbujpo 2-31-111

Dr. Realisation Account Cr.
Ebuf Qbsujdvmbst Ebuf Qbsujdvmbst
3129 Up!Qmbou!boe!Nbdijofsz!B0d 3-41-111 3129 Cz!21&!Efcfouvsft!B0d 61-111
Bqs/!2 Up!Jowfoupsjft!B0d 91-111 Bqs/!2 Cz!Dsfejupst!B0d 2-11-111
Up!Efcupst!B0d 41-111 Cz!BC!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 2-91-111
Up!Dbti!boe!Cbol!B0d 71-111 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 81-111
! ! )Mptt!po!sfbmjtbujpo*
5-11-111 5-11-111
Dr. AB Ltd. Account Cr.

3129 Up!Sfbmjtbujpo!B0d 2-91-111 3129 Cz!Frvjuz!Tibsft!jo!BC!Mue!B0d 2-73-111
Bqs/!2 Bqs/!2 Cz!Dbti!B0d 29-111
2-91-111 2-91-111
Dr. Equity Shares in AB Ltd. Account Cr.

3129 Up!BC!Mue!B0d 2-73-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-73-111
Bqs/!2 Bqs/!2
2-73-111 2-73-111
Dr. Cash Account Cr.

3129 Up!BC!Mue!B0d 29-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 29-111
Bqs/!2 Bqs/!2
29-111 29-111
Dr. Sundry Equity Shareholders Account Cr.
3129 Up!Sfbmjtbujpo!B0d 81-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 2-61-111
Bqs/!2 Up!Frvjuz!Tibsft!jo!BC!Mue!B0d 2-73-111 Bqs/!2 Cz!Sftfswf!B0d 81-111
!!# Up!Dbti!B0d 29-111 ! ! # Cz!Qspgju!boe!Mptt!B0d 41-111
3-61-111 3-61-111
3129 Up!Qmbou!boe!Nbdijofsz!B0d 2-21-111 3129 Cz!23&!Efcfouvsft!B0d 2-11-111
Bqs/!2 Up!Jowfoupsjft!B0d :1-111 Bqs/!2 Cz!Dsfejupst!B0d 51-111
!!# Up!Efcupst!B0d 31-111 !!# Cz!BC!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 2-31-111
!!# Up!Dbti!boe!Cbol!B0d 91-111 !!# Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 51-111
4-11-111 4-11-111
3129 Up!Sfbmjtbujpo!B0d 2-31-111 3129 Cz!Frvjuz!Tibsft!jo!BC!Mue!B0d 2-19-111
2-31-111 2-31-111

3129 Up!BC!Mue!B0d 2-19-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-19-111
Bqs/!2 Bqs/!2
2-19-111 2-19-111
Bqs/!2 Bqs/!2
23-111 23-111
Bqs/!2 Up!Frvjuz!Tibsft!jo!BC!Mue!B0d 2-19-111 Bqs/!2 Cz!Qspgju!boe!Mptt!B0d 71-111
Up!Dbti!B0d 23-111
2-71-111 2-71-111
In the books of AB Ltd.
Journal Dr. Cr.
)Cfjoh!uif!bnpvou!qbzbcmf!up!mjrvjebups!pg!B!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Up!21&!Efcfouvsft!jo!B!Mue!B0d 61-111
Up!Sftfswf!B0d!\!81-111!Ï!)!2-91-111!Ï!2-61-111*^ 51-111
Up!Dsfejupst!B0d 2-11-111
jttvfe!boe!dbti!qbje-!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!B!Mue/-!bekvtufe!bhbjotu!sftfswft*
)Cfjoh!uif!jttvf!pg!tibsft!boe!qbznfou!pg!dbti!bhbjotu!qvsdibtf!dpotjefsbujpo*
21&!Efcfouvsft!jo!B!Mue!B0d Es/ 61-111
)Cfjoh!uif!efcfouvsfipmefst!jo!B!Mue!ejtdibshfe!cz!uif!jttvf!pg!21&!efcfouvsft*
)Cfjoh!uif!bnpvou!qbzbcmf!up!mjrvjebups!pg!C!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Jowfoupsjft!B0d Es/ :1-111
Up!23&!Efcfouvsft!jo!C!Mue!B0d 2-11-111
Up!Qspgju!boe!Mptt!B0d!\!71-111!Ï!)!2-31-111!Ï!2-11-111* 51-111
jttvfe!boe!dbti!qbje-!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!C!Mue-!bekvtufe!bhbjotu!Qspgju!boe!Mptt
Bddpvou*

23&!Efcfouvsft!jo!C!Mue!B0d Es/ 2-11-111
Up!23&!Efcfouvsft!B0d 2-11-111
)Cfjoh!uif!efcfouvsfipmefst!pg!C!Mue!ejtdibshfe!cz!uif!jttvf!pg!23&!efcfouvsft*
AB Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Sftfswft!boe!Tvsqmvt )3* 2-21-111
)b*!Mpoh.ufsn!Cpsspxjoht )4* 2-61-111
)c*!Usbef!Qbzbcmft )5* 2-51-111
UPUBM 7-81-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)c*!Jowfoupsjft )7* 2-81-111
)d*!Usbef!Sfdfjwbcmft )8* 61-111
)e*!Dbti!boe!Dbti!Frvjwbmfout )9* 2-21-111
UPUBM 7-81-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )4*!Mpoh.ufsn!Cpsspxjoht
Bvuipsjtfe!Dbqjubm!; Tfdvsfe!;
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! 21&!Efcfouvsft 61-111
///!Qsfgfsfodf!Tibsft!pg!!///!fbdi @! ! ! ! ! 23&!Efcfouvsft 2-11-111
@! ! ! ! ! 2-61-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )5*!Usbef!Qbzbcmft
38-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 3-81-111 Usbef!Dsfejupst!)!2-11-111!,!51-111* 2-51-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo )6*!Gjyfe!Bttfut
puifs!uibo!dbti* Ubohjcmf!Bttfut!;
)3*!Sftfswf!boe!Tvsqmvt Qmbou!boe!Nbdijofsz!!)!3-41-111!,!2-21-111* 4-51-111
Hfofsbm!Sftfswf! 51-111 )7*!Jowfoupsjft
Qspgju!boe!Mptt!Bddpvou!)!41-111!,!51-111* 81-111 Jowfoupsjft!)!91-111!,!:1-111* 2-81-111
2-21-111 )8*!Usbef!Sfdfjwbcmft!
Tvoesz!Efcupst!)!41-111!,!31-111* 61-111
)7*!Dbti!boe!Dbti!Frvjwbmfout
Dbti!)!71-111!Ï!29-111!,!91-111!Ï!23-111* 2-21-111
Illustration 7
Uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!Tvo!Mue!boe!Nppo!Mue!bt!bu!2/5/3129!bsf!bt!gpmmpxt!;
Balance Sheets of Sun Ltd. and Moon Ltd. as at 1st April, 2018
Opuf Tvo!Mue/ Nppo!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð
Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 4-11-111 3-61-111
22&!Qsfgfsfodf!Tibsft!pg!!21!fbdi!gvmmz!qbje Ð 2-61-111
)c*!Sftfswft!boe!Tvsqmvt!Ð
! ! ! Qspgju!boe!Mptt!Bddpvou 2-11-111 Ð
! ! ! Sftfswft 2-31-111 Ð
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!23&!Efcfouvsft 61-111 2-11-111
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 41-111 61-111
UPUBM 7-11-111 6-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou!boe!Nbdijofsz 4-61-111 5-11-111
)b*!Jowfoupsjft 2-11-111 41-111
)c*!Usbef!Sfdfjwbcmft!Ð!Tvoesz!Efcupst 2-36-111 81-111
)d*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!boe!Cbol 36-111 61-111
UPUBM 7-11-111 6-61-111
Uif!bcpwf!uxp!dpnqbojft!bhsff!up!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz!Tvonppo!Mjnjufe!po!uif!gpmmpxjoh!dpoejujpot;
Tvo!Mue
)j* Gps!fwfsz!6!frvjuz!tibsft-!7!tibsft!pg!Tvonppo!Mue!pg!!21!fbdi!xjmm!cf!jttvfe!bu!qbs/
)jj* Efcfouvsfipmefst!xjmm!cf!jttvfe!23&!efcfouvsft!pg!Tvonppo!Mue!pg!tbnf!bnpvou!boe!efopnjobujpo/
Nppo!Mue
)j* Uif!ipmefst!pg!22&!qsfgfsfodf!tibsft!xjmm!cf!bmmpuufe!5-!24&!qsfgfsfodf!tibsft!pg!!21!fbdi!pg!Tvonppo!Mue!gps
fwfsz!6!qsfgfsfodf!tibsft!ifme/
)jj* Gps!fwfsz!6!frvjuz!tibsft-!7!tibsft!pg!Tvonppo!Mue!pg!!21!fbdi!xjmm!cf!jttvfe!bu!qbs/
)jjj* Efcfouvsfipmefst!xjmm!cf!jttvfe!23&!efcfouvsft!pg!Tvonppo!Mue!pg!tbnf!bnpvou!boe!efopnjobujpo/
Zpv!bsf!sfrvjsfe!up!tipx!;
)2*!uif!dbmdvmbujpo!pg!qvsdibtf!dpotjefsbujpo<!
)3*!Mfehfs!bddpvout!up!dmptf!uif!cpplt!pg!Tvo!Mue!boe!Nppo!Mue/
)4*!kpvsobm!fousjft!jo!uif!cpplt!pg!Tvonppo!Mue/<!boe!
)5*!Pqfojoh!Cbmbodf!Tiffu!pg!Tvonppo!Mue/
Solution
(1) Calculation of Purchase Consideration
! ! ! !Tvo!Mue
! ! ! !Frvjuz!tibsfipmefst!Ð!41-111!0!6!!7!!!21!>!!4-71-111/
! ! ! !Nppo!Mue! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! !22&!Qsfgfsfodf!tibsfipmefst!Ð!26-111!0!6!!5!!!21 2-31-111
! ! ! !Frvjuz!tibsfipmefst!Ð!36-111!0!6!!7!!!21 4-11-111
5-31-111
Uvupsjbm!Opuf!;
Ju!tipvme!cf!opufe!uibu!dpotjefsbujpo!gps!efcfouvsfipmefst!xjmm!opu!cf!jodmvefe!jo!uif!qvsdibtf!dpotjefsbujpo/!Uiftf!efcfouvsft!xjmm
cf!ublfo!pwfs!cz!Tvonppo!Mue!boe!uifsfbgufs!ejtdibshfe!cz!jttvjoh!ofx!efcfouvsft!jo!Tvonppo!Mue/
(2) In the books of Sun Limited
3129 Up!Qmbou!boe!Nbdijofsz!B0d 4-61-111 3129 Cz!23&!Efcfouvsft!B0d 61-111
Bqs/!2 Up!Jowfoupsjft!B0d 2-11-111 Bqs/!2 Cz!Tvoesz!Dsfejupst!B0d 41-111
!!# Up!Tvoesz!Efcupst!B0d 2-36-111 !!# Cz!Tvonppo!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 4-71-111
!!# Up!Dbti!boe!Cbol!B0d 36-111 !!# Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-71-111
7-11-111 7-11-111
Dr. Sunmoon Ltd. Account Cr.
3129 Up!Sfbmjtbujpo!B0d 4-71-111 3129 Cz!Frvjuz!Tibsft!jo!Tvonppo!Mue!B0d 4-71-111
Bqs/!2 Bqs/!2
4-71-111 4-71-111
Dr. Equity Shares in Sunmoon Ltd. Account Cr.
3129 Up!Tvonppo!Mue!B0d 4-71-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 4-71-111
Bqs/!2 Bqs/!2
4-71-111 4-71-111
3129 Up!Sfbmjtbujpo!B0d 2-71-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 4-11-111
Bqs/!2 Up!Frvjuz!Tibsft!jo!Tvonppo!Mue!B0d 4-71-111 Bqs/!2 Cz!Qspgju!boe!Mptt!B0d 2-11-111
Cz!Sftfswf!B0d 2-31-111
6-31-111 6-31-111
In the books of Moon Limited
3129 Up!Qmbou!boe!Nbdijofsz!B0d 5-11-111 3129 Cz!23&!Efcfouvsft!B0d 2-11-111
Bqs/!2 Up!Jowfoupsjft!B0d 41-111 Bqs/!2 Cz!Tvoesz!Dsfejupst!B0d 61-111
Up!Tvoesz!Efcupst!B0d 81-111 Cz!Tvonppo!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 5-31-111
Up!Dbti!boe!Cbol!B0d 61-111 Cz!Qsfgfsfodf!Tibsfipmefst!B0d 41-111
Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)Qspgju* 61-111 ! ! )Ejtdpvou!po!Qbznfou*
7-11-111 7-11-111
Dr. Sunmoon Ltd. Account Cr.
3129 Up!Sfbmjtbujpo!B0d 5-31-111 3129 Cz!Qsfgfsfodf!Tibsft!jo!Tvonppo!Mue!B0d 2-31-111
Bqs/!2 Bqs/!2 Cz!Frvjuz!Tibsft!jo!Tvonppo!Mue!B0d 4-11-111
5-31-111 5-31-111
Dr. Preference Shareholders Account Cr.
3129 Up!Qsfgfsfodf!Tibsft!jo!Tvonppo!Mue!B0d 2-31-111 3129 Cz!22&!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 2-61-111
Bqs/!2 Up!Sfbmjtbujpo!B0d 41-111 Bqs/!2
2-61-111 2-61-111
3129 Up!Frvjuz!Tibsft!jo!Tvonppo!Mue!B0d 4-11-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 3-61-111
Bqs/!2 Bqs/!2 Cz!Sfbmjtbujpo!B0d!)Qspgju!po!sfbmjtbujpo* 61-111
4-11-111 4-11-111
(3) In the books of Sunmoon Ltd.

Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!Tvo!Mue!B0d 4-71-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Tvo!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Jowfoupsjft!B0d Es/ 2-11-111
Tvoesz!Efcupst!B0d Es/ 2-36-111
Up!23&!Efcfouvsft!jo!Tvo!Mue!B0d 61-111
Up!Qspgju!boe!Mptt!B0d 2-11-111
Up!Sftfswf!B0d!\!2-31-111!Ï!)4-71-111!Ï!4-11-111*^ 71-111
Up!Tvoesz!Dsfejupst!B0d 41-111
jttvfe!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!Tvo!Mjnjufe-!bekvtufe!bhbjotu!sftfswft*
Mjrvjebups!pg!Tvo!Mue!B0d Es/ 4-71-111
Up!Mjrvjebups!pg!Nppo!Mue!B0d 5-31-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Nppo!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Tvoesz!Efcupst!B0d Es/ 81-111
Sftfswf!B0d!)!5-31-111!Ï!!5-11-111* Es/ 31-111
Up!23&!Efcfouvsft!jo!Nppo!Mue!B0d 2-11-111
jttvfe!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!Nppo!Mjnjufe!usbotgfssfe!up!sftfswft*
Mjrvjebups!pg!Nppo!Mue!B0d Es/ 5-31-111
Up!24&!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 2-31-111
)Cfjoh!uif!jttvf!pg!frvjuz!tibsft!boe!qsfgfsfodf!tibsft!bhbjotu!qvsdibtf!dpotjefsbujpo*
23&!Efcfouvsft!jo!Tvo!Mue!B0d Es/ 61-111
23&!Efcfouvsft!jo!Nppo!Mue!B0d Es/ 2-11-111
)Cfjoh!uif!jttvf!pg!efcfouvsft!up!uif!Tvo!Mue!boe!Nppo!Mue!efcfouvsfipmefst*
Sunmoon Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 22-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)d*!Usbef!Sfdfjwbcmft )8* 2-:6-111
UPUBM 22-61-111
Notes to Accounts :
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! 23&!Efcfouvsft!)!61-111!,!2-11-111* 2-61-111
///!Qsfgfsfodf!Tibsft!pg!!///!fbdi @! ! ! ! ! )5*!Usbef!Qbzbcmft
@! ! ! ! ! Tvoesz!Dsfejupst!)!41-111!,!61-111* 91-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )6*!Gjyfe!Bttfut
77-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 7-71-111 Ubohjcmf!Bttfut!;
23-111-!24&!Qsfgfsfodf!Tibsft!pg!!21!fbdi 2-31-111 Qmbou!boe!Nbdijofsz!!)!4-61-111!,!5-11-111* 8-61-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo )7*!Jowfoupsjft!)!2-11-111!,!41-111* 2-41-111
puifs!uibo!dbti*
8-91-111 )8*!Usbef!Sfdfjwbcmft!
)3*!Sftfswf!boe!Tvsqmvt Tvoesz!Efcupst!)!2-36-111!,!81-111* 2-:6-111
Sftfswf!!)X/O/J/* 51-111 )9*!Dbti!boe!Dbti!Frvjwbmfout
Qspgju!boe!Mptt!Bddpvou! 2-11-111 Dbti!)!36-111!,!61-111* 86-111
2-51-111
Xpsljoh!Opuf!;
)2*!Dbmdvmbujpo!pg!Sftfswf ! ! !
! ! ! ! ! Sftfswf!gspn!uif!Cbmbodf!Tiffu!pg!Tvo!Mue/ 2-31-111
! ! ! ! ! Mftt!;!Bekvtunfou!jo!dbtf!pg!Tvo!Mue!)!4-71-111!Ï!4-11-111* 71-111!! ! ! ! ! ! ! !
! ! ! ! ! ! ! ! ! ! Bekvtunfou!jo!dbtf!pg!Nppo!Mue!Ð
! ! ! ! ! ! ! ! ! ! ! ! ! Qsfgfsfodf!tibsfipmefst!)!2-31-111!Ï!2-61-111*
Ï!41-111! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! ! ! ! ! ! ! ! ! ! ! Frvjuz!tibsfipmefst!)!4-11-111!Ï!3-61-111* 61-111! ! ! ! 31-111! ! ! 91-111
51-111
Bmufsobujwfmz-!!71-111!)Ds/*!pg!Tvo!Mue/!boe!!31-111!)Es/*!pg!Nppo!Mue/!>!!51-111!)Ds/*
Illustration 8
Tvqfs!Fyqsftt!Mue!boe!Gbtu!Fyqsftt!Mue!xfsf!jo!dpnqfujoh!cvtjoftt/!Uifz!efdjefe!up!gpsn!b!ofx!dpnqboz!obnfe!Tvqfs
Gbtu!Fyqsftt!Mue/!Uif!Cbmbodf!Tiffut!pg!cpui!uif!dpnqbojft!xfsf!bt!voefs!;
Balance Sheets of Super Express Ltd. and First Express Ltd. as at 31st March, 2018
Opuf Tvqfs!Fyqsftt!Mue/ Gjstu!Fyqsftt!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!211!fbdi!gvmmz!qbje 31-11-111 21-11-111
! ! ! ! ! Dbqjubm!Sftfswf 2-11-111 Ð
! ! ! ! ! Hfofsbm!Sftfswf Ð 2-11-111
! ! ! ! ! Qspgju!boe!Mptt!Bddpvou Ð 2-11-111
)b*!Tipsu.ufsn!Cpsspxjoht Ð Ð
)c*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 71-111 51-111
)d*!Puifs!Dvssfou!Mjbcjmjujft!Ð
! ! ! ! ! ! Qspwjefou!Gvoe 2-11-111 Ð
! ! ! ! ! Fnqmpzff!Qspgju!Tibsjoh!Bddpvou Ð 71-111
UPUBM 33-71-111 24-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)j*! !Ubohjcmf!Bttfut!Ð
! ! ! ! ! ! ! Cvjmejoht 21-11-111 7-11-111
! ! ! ! ! ! ! Nbdijofsz 5-11-111 6-11-111
)jj*!!Joubohjcmf!Bttfut!Ð!Hppexjmm Ð 2-11-111
)b*!Dvssfou!Jowftunfout
)c*!Jowfoupsjft 4-11-111 51-111
)d*!Usbef!Sfdfjwbcmft!Ð!Tvoesz!Efcupst 3-51-111 51-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð
! ! ! Dbti!bu!Cbol 3-31-111 21-111
! ! ! ! ! ! Dbti!jo!Iboe 2-11-111 21-111
UPUBM 33-71-111 24-11-111
Uif!bttfut!boe!mjbcjmjujft!pg!cpui!uif!dpnqbojft!xfsf!ublfo!pwfs!cz!uif!ofx!dpnqboz!bu!uifjs!cppl!wbmvft/!Uif!dpnqbojft
xfsf!bmmpuufe!frvjuz!tibsft!pg!!211!fbdi!jo!mjfv!pg!qvsdibtf!dpotjefsbujpo/
Qsfqbsf!pqfojoh!Cbmbodf!Tiffu!pg!Tvqfs!Gbtu!Fyqsftt!Mue!bt!bu!2tu!Bqsjm-!3129/ \D/B/!)Joufs*!Ð!Bebqufe^
Solution
Tjodf!uif!bttfut!boe!mjbcjmjujft!pg!cpui!uif!dpnqbojft!bsf!ublfo!pwfs!cz!Tvqfs!Gbtu!Fyqsftt!Mue!bu!cppl!wbmvft!boe!qvsdibtf!dpotjefsbujpo!gps!cpui
uif!dpnqbojft!bsf!up!cf!tbujtgjfe!cz!uif!jttvf!pg!frvjuz!tibsft-!ju!jt!bo!bnbmhbnbujpo!jo!uif!obuvsf!pg!nfshfs/
Bttvnqujpo!;!Ju!jt!bttvnfe!uibu!uif!qvsdibtf!dpotjefsbujpo!jt!frvbm!up!tibsf!dbqjubm!pg!fbdi!usbotgfsps!dpnqboz/
Super Fast Express Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)4*!Opo.dvssfou!Mjbcjmjujft!; Ð
)d*!Puifs!Dvssfou!Mjbcjmjujft )5* 2-71-111
UPUBM 46-71-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! )jj*!!Joubohjcmf!Bttfut )7* 2-11-111
)d*!Usbef!Sfdfjwbcmft )9* 3-91-111
)e*!Dbti!boe!Dbti!Frvjwbmfout ):* 4-51-111
UPUBM 46-71-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )5*!Puifs!Dvssfou!Mjbcjmjujft
Bvuipsjtfe!Dbqjubm!; FnqmpzfftÔ!Qspgju!Tibsjoh!Bddpvou 71-111
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! Qspwjefou!Gvoe 2-11-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; 2-71-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!bmmpuufe!bt!gvmmz!qbje Ubohjcmf!Bttfut!;
gps!dpotjefsbujpo!puifs!uibo!dbti* Cvjmejoh!!)!21-11-111!,!7-11-111* 27-11-111
)3*!Sftfswf!boe!Tvsqmvt Nbdijofsz!)!5-11-111!,!6-11-111* :-11-111
Dbqjubm!Sftfswf 2-11-111 36-11-111
Hfofsbm!Sftfswf 2-11-111 )8*!Jowfoupsjft!)!4-11-111!,!51-111* 4-51-111
Qspgju!boe!Mptt!Bddpvou 2-11-111
4-11-111 )9*!Usbef!Sfdfjwbcmft
)4*!Usbef!Qbzbcmft Tvoesz!Efcupst!)!3-51-111!,!51-111* 3-91-111
Tvoesz!Dsfejupst!)71-111!,!51-111* 2-11-111 ):*!Dbti!boe!Dbti!Frvjwbmfout
Cbol!)!3-31-111!,!21-111* 3-41-111
Dbti!)!2-11-111!,!21-111* 2-21-111
3-51-111
Illustration 9
Uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bt!!bu!2tu!Bqsjm-!3129!bsf!bt!voefs!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)c*!Sftfswft!boe!Tvsqmvt!Ð Hfofsbm!Sftfswf
Qspgju!boe!Mptt!Bddpvou 2-91-111 2-91-111
2-:1-111 2-11-111
)3*!Tibsf!Bqqmjdbujpo!Npofz!Qfoejoh!Bmmpunfou!; Ð Ð
)4*!Opo.dvssfou!Mjbcjmjujft!; Ð Ð
)b*!Usbef!Qbzbcmft!Ð!Dsfejupst 41-111 31-111
UPUBM 8-11-111 9-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)j*! !Ubohjcmf!Bttfut!Ð!Mboe!boe!Cvjmejoht 6-11-111 5-61-111
)b*!Jowfoupsjft 2-11-111 2-41-111
)c*!Usbef!Sfdfjwbcmft!Ð!Efcupst 61-111 2-61-111
)d*!Dbti!boe!Dbti!Frvjwbmfout 61-111 81-111
UPUBM 8-11-111 9-11-111
B!ofx!dpnqboz-!BC!Mue!jt!gpsnfe!up!ublf!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!pg!B!Mue!boe!C!Mue/-!voefs!uif!gpmmpxjoh
ufsnt!boe!dpoejujpot!;
2/ Gps!fwfsz!3!tibsft!pg!B!Mue/-!4!tibsft!pg!!21!fbdi!pg!BC!Mue!xjmm!cf!jttvfe/
3/ Gps!fwfsz!6!tibsft!pg!C!Mue/-!7!tibsft!pg!!21!fbdi!pg!BC!Mue!xjmm!cf!jttvfe/
4/ Uifsf!bsf!gsbdujpot!frvbmjoh!61!tibsft!pg!B!Mue!boe!211!tibsft!pg!C!Mue!Ð!gps!xijdi!dbti!ibt!up!cf!qbje/
)j* Tipx!uif!ofdfttbsz!mfehfs!bddpvout!up!dmptf!uif!cpplt!pg!B!Mue!boe!C!Mue/
)jj* Qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!BC!Mue/
)jjj* Qsfqbsf!uif!Cbmbodf!Tiffu!pg!BC!Mue/-!bgufs!bnbmhbnbujpo/
Qbsujdvmbst B!Mue/ Qbsujdvmbst C!Mue/

Frvjuz!Tibsft!Ð!)41-111!Ï!61*!0!3!y!4!y!!21 5-5:-361 Frvjuz!Tibsft!Ð!)61-111!Ï!211*!0!6!y!7!y!!21 6-:9-911
Dbti!Ð!)gsbdujpo!pg!tibsft*!61!0!3!y!4!y!!21 861 Dbti!Ð!!)gsbdujpo!pg!tibsft*!211!0!6!y!7!y!!21 2-311
Qvsdibtf!dpotjefsbujpo 5-61-111 Qvsdibtf!dpotjefsbujpo 7-11-111
(i) In the books of A Limited
3129 Up!Mboe!boe!Cvjmejoh!B0d 6-11-111 3129 Cz!Dsfejupst!B0d 41-111
Bqs/!2 Up!Jowfoupsjft!B0d 2-11-111 Bqs/!2 Cz!BC!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 5-61-111
!!# Up!Efcupst!B0d 61-111 ! ! # Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)Mptt* 3-31-111
!!# Up!Dbti!boe!Cbol!B0d 61-111
8-11-111 8-11-111

3129 Up!Sfbmjtbujpo!B0d 5-61-111 3129 Cz!Frvjuz!Tibsft!jo!BC!Mue!B0d 5-5:-361
Bqs/!2 Bqs/!2 Cz!Dbti!B0d 861
5-61-111 5-61-111

3129 Up!BC!Mue!B0d 5-5:-361 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 5-5:-361
Bqs/!2 Bqs/!2
5-5:-361 5-5:-361

3129 Up!BC!Mue!B0d 861 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 861
Bqs/!2 Bqs/!2
861 861
Bqs/!2 Up!Frvjuz!Tibsft!jo!BC!Mue!B0d 5-5:-361 Bqs/!2 Cz!Sftfswf!B0d 2-91-111
!!# Up!Dbti!B0d 861 ! ! # Cz!Qspgju!boe!Mptt!B0d! 2-:1-111
7-81-111 7-81-111
In the books of B Limited

3129 Up!Mboe!boe!Cvjmejoh!B0d 5-61-111 3129 Cz!Dsfejupst!B0d 31-111
Bqs/!2 Up!Jowfoupsjft!B0d 2-41-111 Bqs/!2 Cz!BC!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 7-11-111
!!# Up!Efcupst!B0d 2-61-111 ! ! # Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)Mptt* 2-91-111
!!# Up!Dbti!boe!Cbol!B0d 81-111
9-11-111 9-11-111

3129 Up!Sfbmjtbujpo!B0d 7-11-111 3129 Cz!Frvjuz!Tibsft!jo!BC!Mue!B0d 6-:9-911
7-11-111 7-11-111

3129 Up!BC!Mue!B0d 6-:9-911 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 6-:9-911
Bqs/!2 Bqs/!2
6-:9-111 6-:9-911

Bqs/!2 Bqs/!2
2-311 2-311
Bqs/!2 Up!Frvjuz!Tibsft!jo!BC!Mue!B0d 6-:9-911 Bqs/!2 Cz!Sftfswf!B0d 2-91-111
!!# Up!Dbti!B0d 2-311 ! ! # Cz!Qspgju!boe!Mptt!B0d 2-11-111
8-91-111 8-91-111
Ju!jt!bo!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Nfshfs!cfdbvtf!bmm!uif!bttfut!boe!mjbcjmjujft!ibwf!cffo!ublfo!pwfs
boe!uif!qvsdibtf!dpotjefsbujpo!ibt!cffo!tbujtgjfe!cz!uif!jttvf!pg!tibsft!)fydfqujoh!gps!gsbdujpobm!tibsft*/
Uifsfgpsf-!qppmjoh!pg!joufsftut!nfuipe!jt!up!cf!bcpqufe/
(ii) In the books of AB Ltd.
Journal Dr. Cr.
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!B!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Mboe!boe!Cvjmejoh!B0d Es/ 6-11-111
Up!Hfofsbm!Sftfswf!B0d!\!2-91-111!Ï!)!5-61-111!Ï!4-11-111*^ 41-111
Up!Qspgju!boe!Mptt!B0d 2-:1-111
jttvfe!boe!dbti!qbje-!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!B!Mue-!bekvtufe!bhbjotu!sftfswft*

Up!Frvjuz!Tibsf!Dbqjubm!B0d 5-5:-361
Up!Dbti!boe!Cbol!B0d 861
)Cfjoh!uif!bnpvou!qbzbcmf!up!mjrvjebujpo!pg!C!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Efcupst!B0d Es/ 2-61-111
Up!Hfofsbm!Sftfswf!B0d!\!2-91-111!Ï!)!7-11-111!Ï!6-11-111*^ 91-111
jttvfe!boe!dbti!qbje-!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!C!Mue-!bekvtufe!bhbjotu!sftfswft*
Up!Frvjuz!Tibsf!Dbqjubm!B0d 6-:9-911
AB Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 25-:9-161
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut )5* :-61-111
UPUBM 25-:9-161
Notes to Accounts :
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! Mboe!boe!Cvjmejoh!)!6-11-111!,!5-61-111* :-61-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )6*!Jowfoupsjft!)!2-11-111!,!:1-111* 3-41-111
2-15-916!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 21-59-161
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo )7*!Usbef!Sfdfjwbcmft!
puifs!uibo!dbti* Tvoesz!Efcupst!)!61-111!,!2-61-111* 3-11-111
)3*!Sftfswf!boe!Tvsqmvt )7*!Dbti!boe!Dbti!Frvjwbmfout
Hfofsbm!Sftfswf!!)!41-111!,!91-111* 2-21-111 Dbti!)!61-111!Ï!861!,!81-111!Ï!2-311* 2-29-161
Qspgju!boe!Mptt!Bddpvou!)!2-:1-111!,!2-11-111* 3-:1-111
5-11-111
)4*!Usbef!Qbzbcmft
Tvoesz!Dsfejupst!)!41-111!,!31-111* 61-111
Inter-Company Debts and Inventories

Hfofsbmmz-!bnbmhbnbujpo!ublft!qmbdf!jo!cfuxffo!dpnqbojft!ibwjoh!nvuvbm!efbmjoht/!Uifsfgpsf-!jo!qsbdujdf-!ju
jt!dpnnpo!up!gjoe!joufs.!dpnqboz!joefcufeoftt!boe!joufs.dpnqboz!tupdlt!jo!dbtf!pg!bnbmhbnbujpo/
Mutual Indebtedness
Uifsf!nbz!cf!nvuvbm!joefcufeoftt!cfuxffo!uif!usbotgfsps!dpnqboz!boe!uif!usbotgfsff!dpnqboz!ps!cfuxffo
uif!usbotgfsps!dpnqbojft/!Op!bekvtunfou!jt!sfrvjsfe!jo!uif!cpplt!pg!uif!usbotgfsps!dpnqboz-!gps!uif!bcpwf
efcut/!Uifz!bsf!tjnqmz!up!dmptf!uif!cpplt!pg!bddpvou!cz!usbotgfssjoh!tvoesz!efcupst!boe!tvoesz!dsfejupst!up
Sfbmjtbujpo!Bddpvou!bu!cppl!wbmvft/
Ipxfwfs-!jo!uif!cpplt!pg!uif!usbotgfsff!dpnqboz!pof!bekvtunfou!fousz!jt!up!cf!qbttfe!up!sfevdf!uif!Tvoesz
Efcupst!Bddpvou!boe!Tvoesz!Dsfejupst!Bddpvou/
Uif!fousz!xjmm!cf!)jo!uif!cpplt!pg!Usbotgfsff!Dpnqboz*;
Tvoesz!Dsfejupst!Bddpvou Es/
! ! Up!Tvoesz!Efcupst!Bddpvou
Mutual Acceptances
Mjlf!nvuvbm!joefcufeoftt-!uifsf!nbz!cf!nvuvbm!bddfqubodft!)esbxjoh!boe!bddfqubodf!pg!cjmmt!pg!fydibohf*
cfuxffo! uif! usbotgfsps! dpnqboz! boe!usbotgfsff!dpnqboz/!Op!tqfdjbm!fousz!jt!sfrvjsfe!jo!uif!cpplt!pg!uif
usbotgfsps!dpnqbojft!gps!nvuvbm!bddfqubodft/
Ipxfwfs-! jo! uif! cpplt! pg! uif! usbotgfsff! dpnqboz! uif! gpmmpxjoh! fousz! jt! up! cf! qbttfe! up! sfevdf! Cjmmt
Sfdfjwbcmf!Bddpvou!boe!Cjmmt!Qbzbcmf!Bddpvou/
Cjmmt!Qbzbcmf!Bddpvou Es/
! ! Up!Cjmmt!Sfdfjwbcmf!Bddpvou
Illustration 10
Tubs!Mue/!jt!gpsnfe!up!ublf!pwfs!Tvo!Mue/!boe!Nppo!Mue/!gps!!31-11-111!boe!!23-11-111!qbzbcmf!jo!frvjuz!tibsft!pg!!21
fbdi-/!Uif!Cbmbodf!Tiffu!pg!uxp!dpnqbojft!bsf!hjwfo!cfmpx!;
Balance Sheets of Sun Ltd. and Moon Ltd. as at 1st April, 2018
)2* )3* )4* )5*
)c*!Sftfswft!boe!Tvsqmvt!Ð!Sftfswf 21-11-111 3-71-111
)c*!Usbef!Qbzbcmft!Ð
! ! ! ! ! Dsfejupst 4-61-111 2-91-111
! ! ! ! ! ! ! ! Cjmmt!Qbzbcmf 61-111 71-111
UPUBM 37-11-111 26-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! Mboe!boe!Cvjmejoht 21-11-111 6-61-111
! ! ! ! ! Qmbou!boe!Nbdijofsz 3-61-111 2-61-111
)c*!Jowfoupsjft 7-86-111 5-91-111
)d*!Usbef!Sfdfjwbcmft!Ð
! ! ! Efcupst 6-86-111 3-31-111
! ! ! ! ! ! Cjmmt!Sfdfjwbcmft 71-111 91-111
)e*!Dbti!boe!dbti!frvjwbmfout!Ð!Dbti!boe!Cbol 51-111 31-111
UPUBM 37-11-111 26-11-111
Opuf!;!Cjmmt!ejtdpvoufe!cz!Nppo!Mue/!jodmvef!!41-111!evf!gspn!Tvo!Mue/
Beejujpobm!Jogpsnbujpo!;
)b*! Cjmmt!Qbzbcmf!pg!Tvo!Mue/!jodmvef!!61-111!bddfqubodft!jo!gbwpvs!pg!Nppo!Mue/!Cvu!Cjmmt!Sfdfjwbcmf!pg!Nppo
Mue/!jodmveft!!31-111!bddfqufe!cz!Tvo!Mue/
)c*! Tvoesz!Efcupst!pg!Nppo!Mue/!jodmvef!!36-111!evf!gspn!Tvo!Mue/
)j*! Qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!Tvo!Mue/
)jj*! Qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!Tubs!Mue/
Solution
Tubs!Mue!jt!gpsnfe!up!ublf!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!pg!Tvo!Mue!boe!Nppo!Mue/!Bmm!uif!bttfut!boe!mjbcjmjujft!xjmm!cf!ublfo!pwfs
bu!cppl!wbmvf!boe!bmm!uif!tibsfipmefst!pg!Tvo!Mue!boe!Nppo!Mue!xjmm!cfdpnf!tibsfipmefst!pg!Tubs!Mue/!Uifsfgpsf-!ju!jt!bo!bnbmhbnbujpo
jo!uif!obuvsf!pg!nfshfs/
In the books of Sun Ltd.
Journal Dr. Cr.
Up!Qmbou!boe!Nbdijofsz!B0d 3-61-111
Up!Jowfoupsjft!B0d 7-86-111
Up!Efcupst!B0d 6-86-111
Up!Cjmmt!Sfdfjwbcmf!B0d 71-111
)Cfjoh!ejggfsfou!bttfut!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou*
Dsfejupst!B0d Es/ 4-61-111
Cjmmt!Qbzbcmf!B0d Es/ 61-111
)Cfjoh!ejggfsfou!mjbcjmjujft!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou*
Tubs!Mue/!B0d Es/ 31-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!Tubs!Mue/*
Tibsft!jo!Tubs!Mue/!B0d Es/ 31-11-111

Up!Tubs!Mue/!B0d 31-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn!Tubs!Mue/*
Tvoesz!Tibsfipmefst!B0d Es/ 3-11-111
)Cfjoh!uif!mptt!po!sfbmjtbujpo!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
Tibsf!Dbqjubm!B0d Es/ 23-11-111
Sftfswf!B0d Es/ 21-11-111
Up!Tvoesz!Tibsfipmefst!B0d 33-11-111
)Cfjoh!uif!usbotgfs!pg!tibsf!dbqjubm!boe!sftfswf!up!Tvoesz!Tibsfipmefst!Bddpvou*
Up!Tibsft!jo!Tubs!Mue/!B0d 31-11-111
)Cfjoh!uif!tibsft!jo!Tubs!Mue/!ejtusjcvufe!bnpohtu!uif!Tvoesz!Tibsfipmefst*
In the books of Star Ltd.

Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!Tvo!Mue/!B0d 31-11-111
Up!Mjrvjebups!pg!Nppo!Mue/!B0d 23-11-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!Mjrvjebups!pg!Tvo!Mue!boe!Nppo!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Cjmmt!Sfdfjwbcmf!B0d Es/ 71-111
Up!Cjmmt!Qbzbcmf!B0d 61-111
Up!Sftfswf!B0d!\!21-11-111!Ï!)31-11-111!Ï!23-11-111*^ 3-11-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!pg!Tvo!Mue!ublfo!pwfs!boe!uif!ejggfsfodf!cfuxffo!uif
tibsft!jttvfe!boe!tibsf!dbqjubm!pg!Tvo!Mue/!ibt!cffo!bekvtufe!bhbjotu!uif!sftfswf*
Up!Sftfswf!B0d!\3-71-111!Ï!)23-11-111!Ï!21-11-111*^ 71-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!pg!Nppo!Mue!ublfo!pwfs!boe!uif!ejggfsfodf!cfuxffo!uif
tibsft!jttvfe!boe!tibsf!dbqjubm!pg!Nppo!Mue/!bekvtufe!bhbjotu!sftfswf*
Mjrvjebups!pg!Tvo!Mue/!B0d Es/ 31-11-111
Mjrvjebups!pg!Nppo!Mue/!B0d Es/ 23-11-111
)Cfjoh!uif!jttvf!pg!frvjuz!tibsft!up!tbujtgz!qvsdibtf!dpotjefsbujpo*
)Cfjoh!nvuvbm!joefcufeoftt!jo!cfuxffo!Tvo!Mue/!boe!Nppo!Mue/!tfu.pgg*
Cjmmt!Qbzbcmf!B0d!)Opuf!2* Es/ 31-111
)Cfjoh!nvuvbm!bddfqubodft!jo!cfuxffo!Tvo!Mue/!boe!Nppo!Mue/!tfu.pgg*
Uvupsjbm!Opuf!)2*!;!Bmuipvhi!bddfqubodf!pg!Tvo!Mue/!jodmveft!61-111!jo!gbwpvs!pg!Nppo!Mue/!cvu!Nppo!Mue/!ipmejoh!pomz!31-111!boe
41-111!ibt!cffo!ejtdpvoufe!xjui!uif!cbol/!Uifsfgpsf-!nvuvbm!bddfqubodf!xjmm!cf!tfu!pgg!!31-111/
Illustration 11
YZ!Mue/!jt!gpsnfe!up!ublf!pwfs!Y!Mue/!boe!Z!Mue/!gps!!5-11-111!boe!!4-11-111-!qbzbcmf!jo!frvjuz!tibsft!pg!!21!fbdi/
Uif!Cbmbodf!Tiffut!pg!uxp!dpnqbojft!bsf!hjwfo!cfmpx!;
Balance Sheets of X Ltd. and Y Ltd. as at 1st April, 2018
Opuf Y!Mue/ Z!Mue/
)2* )3* )4* )5*
)c*!Sftfswft!boe!Tvsqmvt!Ð!Sftfswf 2-11-111 23-611
! ! ! Tvoesz!Dsfejupst 2-61-111 61-111
! ! ! ! ! ! Cjmmt!Qbzbcmf 36-111 48-611
UPUBM 7-61-111 5-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut!Ð
! ! ! ! )j*!Ubohjcmf!bttfut!;
! ! ! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoht 2-11-111 61-111
! ! ! ! ! ! ! ! ! !Qmbou!boe!Nbdijofsz 2-23-611 48-611
)c*!Jowfoupsjft 2-86-111 86-111
)d*!Usbef!Sfdfjwbcmft
! ! ! Tvoesz!Efcupst 3-11-111 2-11-111
! ! ! Cjmmt!Sfdfjwbcmft 48-611 61-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!bu!Cbol 36-111 98-611
UPUBM 7-61-111 5-11-111
Opuf!;!Cjmmt!ejtdpvoufe!cz!Z!Mue/!opu!zfu!nbuvsfe!!8-611/
Beejujpobm!jogpsnbujpo!;!
)j*! Tvoesz!Efcupst!pg!Z!Mue/!jodmvef!!36-111!evf!gspn!Y!Mue/<!boe!
)jj*! Cjmmt!qbzbcmf!pg!Y!Mue/!jodmvef!!31-111!bddfqubodft!jo!gbwpvs!pg!Z!Mue/!Cvu!Cjmmt!sfdfjwbcmf!pg!Z!Mue/!jodmveft
!23-611!bddfqufe!cz!Y!Mue/
Zpv!bsf!sfrvjsfe!up!;!
)j*! qbtt!uif!kpvsobm!fousjft!jo!uif!cpplt!pg!Y!Mue/!boe!Z!Mue/<!
)jj*! qbtt!bdrvjtjujpo!fousjft!jo!uif!cpplt!pg!YZ!Mue/<!boe
)jjj*! qsfqbsf!Cbmbodf!Tiffu!pg!YZ!Mue/
Solution In the books of X Ltd.
Journal Dr. Cr.
Up!Tvoesz!Efcupst!B0d 3-11-111
Tvoesz!Dsfejupst!B0d Es/ 2-61-111

YZ!Mue/!B0d Es/ 5-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!YZ!Mue/*
Tibsft!jo!YZ!Mue/!B0d Es/ 5-11-111
Up!YZ!Mue/!B0d 5-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn!YZ!Mue/*
Tvoesz!Tibsfipmefst!B0d Es/ 86-111
Sftfswf!B0d Es/ 2-11-111
Up!Tibsft!jo!YZ!Mue/!B0d 5-11-111
)Cfjoh!uif!tibsft!jo!YZ!Mue/!ejtusjcvufe!bnpohtu!uif!Tvoesz!Tibsfipmefst*

Journal Dr. Cr.
Bqs/!2 Up!Mboe!boe!Cvjmejoht!B0d 61-111
Up!Qmbou!boe!Nbdijofsz!B0d 48-611
Up!Tvoesz!Efcupst!B0d 2-11-111
Tvoesz!Dsfejupst!B0d Es/ 61-111
YZ!Mue/!B0d Es/ 4-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!YZ!Mue/*
Up!YZ!Mue/!B0d 4-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn!YZ!Mue/*
)Cfjoh!uif!tibsft!jo!YZ!Mue/!ejtusjcvufe!bnpohtu!uif!Tibsfipmefst*
In the books of XY Ltd.

Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!Y!Mue/!B0d 5-11-111
Up!Mjrvjebups!pg!Z!Mue/!B0d 4-11-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!Mjrvjebups!pg!Y!Mue!boe!Z!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Up!Tvoesz!Dsfejupst!B0d 2-61-111
Up!Sftfswf!B0d!\!2-11-111!Ï!)5-11-111!Ï!4-86-111*^ 86-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!boe!uif!ejggfsfodf!cfuxffo!uif!tibsft
jttvfe!boe!tibsf!dbqjubm!pg!Y!Mue/!ibt!cffo!bekvtufe!bhbjotu!uif!sftfswf*
Qmbou!boe!Nbdijofsz!B0d Es/ 48-611
Up!Sftfswf!B0d! 23-611
)Cfjoh!uif!bttfut-!mjbcjmjujft!boe!sftfswf!ublfo!pwfs!gspn!Z!Mue/*
Mjrvjebups!pg!Z!Mue/!B0d Es/ 4-11-111
)Cfjoh!uif!jttvf!pg!frvjuz!tibsft!jo!tbujtgbdujpo!pg!qvsdibtf!dpotjefsbujpo*
)Cfjoh!nvuvbm!joefcufeoftt!jo!cfuxffo!Y!Mue/!boe!Z!Mue/!tfu.pgg*
Cjmmt!Qbzbcmf!B0d!)Opuf!2* Es/ 23-611
)Cfjoh!nvuvbm!bddfqubodft!jo!cfuxffo!Y!Mue/!boe!Z!Mue/!tfu.pgg*
Uvupsjbm!Opuf!;
)2*! Bmuipvhi!bddfqubodf!pg!Y!Mue/!jodmvef!!31-111!jo!gbwpvs!pg!Z!Mue/-!Z!Mue/!ibt!pomz!!23-611!jo!iboe/!Uif!cbmbodf!ibt!cffo
ejtdpvoufe!xjui!uif!cbol/!Uifsfgpsf-!!8-611!jt!op!mpohfs!b!nvuvbm!mjbcjmjuz-!ju!jt!b!mjbcjmjuz!up!uif!cbolfst/!Nvuvbm!bddfqubodft
tujmm!ifme!!23-611!ibt!cffo!tfu.pgg/
XY Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 21-23-611
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)c*!Jowfoupsjft 3-61-111
)e*!Dbti!boe!Dbti!Frvjwbmfout 2-23-611
UPUBM 21-23-611
Notes to Accounts :
)2*!Tibsf!Dbqjubm )3*!Sftfswf!boe!Tvsqmvt
Bvuipsjtfe!Dbqjubm!; Sftfswf!;
///!Frvjuz!Tibsft!pg!!///!fbdi +++ Y!Mue 86-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Z!Mue 23-611 98-611
\Bmm!tibsft!ibwf!cffo!bmmpuufe!bt!gvmmz!qbje.vq-! Ubohjcmf!Bttfut!;
qvstvbou!up!b!dpousbdu!xjuipvu!qbznfou!cfjoh ! Mboe!boe!Cvjmejoh 2-61-111
sfdfjwfe!jo!dbti^ Qmbou!boe!Nbdijofsz 2-61-111
4-11-111
)4*!Usbef!Qbzbcmft )6*!Usbef!Sfdfjwbcmft
Tvoesz!Dsfejupst 2-86-111 Cjmmt!Sfdfjwbcmft 86-111
Cjmmt!Qbzbcmf 61-111 Usbef!Sfdfjwbcmft!)!2-86-111!,!2-11-111* 3-86-111
3-36-111 4-61-111
Inter-Company Inventories
Bttfut!bdrvjsfe!cz!uif!usbotgfsff!dpnqboz!nbz!jodmvef!joufs!dpnqboz!tupdl!bu!jogmbufe!qsjdft/!Bu!uif!ujnf!pg
qbttjoh!fousjft!jo!uif!cpplt!pg!uif!usbotgfsff!dpnqboz-!uif!gpmmpxjoh!bekvtunfou!fousz!jt!up!cf!qbttfe!;
Sftfswf!Bddpvou Es/
! ! Up!Jowfoupsjft!Bddpvou
Ipxfwfs-!op!bekvtunfou!jt!sfrvjsfe!jo!uif!cpplt!pg!uif!usbotgfsps!dpnqbojft/
Illustration 12
Po!2tu!Bqsjm-!3129!YZ!Mue/!jt!gpsnfe!up!ublf!pwfs!Y!Mue/!boe!Z!Mue/!gps!!5-11-111!boe!!4-11-111!qbzbcmf!jo!Frvjuz
Tibsft!pg!!21!fbdi/!Uif!Cbmbodf!Tiffut!pg!uxp!dpnqbojft!bt!po!42tu!Nbsdi-!3129!bsf!hjwfo!cfmpx!;
Opuf Y!Mue/ Z!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsft!pg!!21!fbdi 4-86-111 4-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Hfofsbm!Sftfswf 2-11-111 23-611
Tvoesz!Dsfejupst 2-61-111 61-111
! ! ! Cjmmt!Qbzbcmf 36-111 48-611
UPUBM 7-61-111 5-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð
! ! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoht 2-11-111 61-111
! ! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 2-23-611 48-611
)c*!Jowfoupsjft 2-86-111 86-111
)d*!Usbef!Sfdfjwbcmft!Ð
Tvoesz!Efcupst 3-11-111 2-11-111
Cjmmt!Sfdfjwbcmft 48-611 61-111
UPUBM 7-61-111 5-11-111
Jowfoupsjft!pg!Y!Mue/!jodmveft!!31-111!qvsdibtfe!gspn!Z!Mue/!po!xijdi!Z!Mue/!nbef!31&!qspgju!po!tbmft/
Qbtt!ofdfttbsz!Kpvsobm!Fousjft!jo!uif!cpplt!pg!YZ!Mue/!boe!bmtp!esbgu!uif!Cbmbodf!Tiffu!pg!YZ!Mue/
Solution In the books of XY Ltd.
Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!Y!Mue/!B0d 5-11-111
Up!Mjrvjebups!pg!Z!Mue/!B0d 4-11-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebupst!pg!Y!Mue!boe!Z!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Up!Tvoesz!Dsfejupst!B0d 2-61-111
Up!Hfofsbm!Sftfswf!B0d!\!2-11-111!Ï!)5-11-111!Ï!4-86-111*^ 86-111
)Cfjoh!bttfut-!mjbcjmjujft!boe!sftfswf!ublfo!pwfs!gspn!Y!Mue/!boe!uif!ejggfsfodf!cfuxffo!uif
tibsft!jttvfe!boe!tibsf!dbqjubm!pg!Y!Mue/!ibt!cffo!bekvtufe!bhbjotu!uif!sftfswf*
Qmbou!boe!Nbdijofsz!B0d Es/ 48-611
Up!Hfofsbm!Sftfswf!B0d! 23-611
)Cfjoh!uif!bttfut!boe!mjbcjmjujft!ublfo!pwfs!gspn!Z!Mue/!boe!qvsdibtf!dpotjefsbujpo!bhsffe*

)Cfjoh!uif!jttvf!pg!frvjuz!tibsft!jo!tbujtgbdujpo!pg!qvsdibtf!dpotjefsbujpo*
)Cfjoh!uif!bekvtunfou!gps!joufs.dpnqboz!tupdl*
XY Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 21-57-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
UPUBM 21-57-111
Notes to Accounts :
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! Mboe!boe!Cvjmejoh!)!2-11-111!,!61-111* 2-61-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Qmbou!boe!Cvjmejoh!)!2-23-611!,!48-611* 2-61-111
81-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 8-11-111 4-11-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo )6*!Jowfoupsjft!)!3-61-111!Ð!5-111* 3-57-111
puifs!uibo!dbti*
)3*!Sftfswf!boe!Tvsqmvt )7*!Usbef!Sfdfjwbcmft!
Hfofsbm!Sftfswf!!)!86-111!,!23-611!Ï!5-111* 94-611 Tvoesz!Efcupst! 4-11-111
)4*!Usbef!Qbzbcmft Cjmmt!Sfdfjwbcmf 98-611
Tvoesz!Dsfejupst! 3-11-111 4-98-611
Cjmmt!Qbzbcmf 73-611 )8*!Dbti!boe!Dbti!Frvjwbmfout
3-73-611 Dbti!bu!Cbol 2-23-611
Illustration 13
Uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bu!2tu!Bqsjm-!3129!bsf!bt!voefs!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!21!fbdi 3-61-111 2-61-111
Hfofsbm!Sftfswf 71-111 51-111
)c*!Usbef!Qbzbcmft!Ð!Dsfejupst 41-111 31-111
UPUBM 4-91-111 3-81-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut 2-61-111 2-31-111
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 91-111 51-111
UPUBM 4-91-111 3-81-111
Uif!bcpwf!uxp!dpnqbojft!bhsff!up!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz!BC!Mue!po!uif!gpmmpxjoh!dpoejujpot!;
2/ BC!Mue!xjmm!ublf!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!pg!B!Mue!boe!C!Mue/-!tvckfdu!up!uif!gpmmpxjoh!bekvtunfout!jo
psefs!up!fotvsf!vojgpsn!bddpvoujoh!qpmjdjft!Ð
)b*!Uipvhi!cpui!uif!dpnqbojft!gpmmpx!tusbjhiu.mjof!nfuipe!pg!efqsfdjbujpo-!B!Mue!dibshft!efqsfdjbujpo!A!21&
! ! !q/b/!!xifsfbt!!C!!Mue!!dibshft!efqsfdjbujpo!A!26&!q/b/!Jo!fggfdu-!efqsfdjbujpo!pwfsdibshfe!cz!C!Mue!bnpvou
! !!!up!!21-111!ibt!up!cf!bekvtufe/
)c*!B!Mue!wbmvft!tupdl!po!MJGP!cbtjt-!xifsfbt!C!Mue!wbmvft!tupdl!po!GJGP!cbtjt/!Up!csjoh!C!Mue/Ôt!wbmvft!jo
! !!!mjof!xjui!uiptf!pg!B!Mue/-!jut!wbmvf!jt!up!cf!sfevdfe!cz!!6-111/
3/ Uif!foujsf!qvsdibtf!dpotjefsbujpo!xjmm!cf!tbujtgjfe!cz!uif!jttvf!pg!frvjuz!tibsft!pg!!21!fbdi/!B!Mue!xjmm!hfu
41-111!tibsft!boe!C!Mue!xjmm!hfu!31-111!tibsft/
Zpv!bsf!sfrvjsfe!up!;!!)j*!dmptf!!uif!!cpplt!pg!B!Mue!boe!C!Mue<!)jj*!Qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!BC!Mue<!boe!)jjj*
qsfqbsf!uif!Cbmbodf!Tiffu!pg!BC!Mue/
Solution (i) In the books of A Ltd.
3129 Up!Gjyfe!Bttfut!B0d 2-61-111 3129 Cz!Dsfejupst!B0d 41-111
Bqs/!2 Up!Jowfoupsjft!B0d 81-111 Bqs/!2 Cz!BC!Mue/!B0d!)Qvsdibtf!Dpotjefsbujpo* 4-11-111
Up!Efcupst!B0d 91-111 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)Mptt* 61-111
4-91-111 4-91-111

3129 Up!Sfbmjtbujpo!B0d 4-11-111 3129 Cz!Frvjuz!Tibsft!jo!BC!Mue/!B0d 4-11-111
Bqs/!2 Bqs/!2
4-11-111 4-11-111
3129 Up!BC!Mue/!B0d 4-11-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 4-11-111
Bqs/!2 Bqs/!2
4-11-111 4-11-111
Bqs/!2 Up!Frvjuz!Tibsft!jo!BC!Mue/!B0d 4-11-111 Bqs/!2 Cz!Hfofsbm!Sftfswf!B0d 71-111
Cz!Qspgju!boe!Mptt!B0d 51-111
4-61-111 4-61-111
3129 Up!Gjyfe!Bttfut!B0d!)Opuf!2* 2-41-111 3129 Cz!Dsfejupst!B0d 31-111
Bqs/!2 Up!Jowfoupsjft!B0d!)Opuf!3* 86-111 Bqs/!2 Cz!BC!Mue/!B0d!)Qvsdibtf!Dpotjefsbujpo* 3-11-111
Up!Efcupst!B0d 51-111 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 66-111
3-86-111 3-86-111
3129 Up!Sfbmjtbujpo!B0d 3-11-111 3129 Cz!Frvjuz!Tibsft!jo!BC!Mue/!B0d 3-11-111
Bqs/!2 Bqs/!2
3-11-111 3-11-111
Dr. Equity Shares in AB Account Cr.
3129 Up!BC!Mue/!B0d 3-11-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 3-11-111
Bqs/!2 Bqs/!2
3-11-111 3-11-111
Bqs/!2 Up!Frvjuz!Tibsft!jo!BC!Mue/!B0d 3-11-111 Bqs/!2 Cz!Hfofsbm!Sftfswf!B0d 51-111
Cz!Qspgju!boe!Mptt!B0d!)Opuf!4* 76-111
3-66-111 3-66-111
Xpsljoh!Opuft;
)2* Gps!!bekvtunfou!!pg!!fydftt!!efqsfdjbujpo-!!Gjyfe!!Bttfut!!Bddpvou!xjmm!cf!efcjufe!boe!Qspgju!boe!Mptt!Bddpvou!xjmm!cf!dsfejufe
cz!!21-111/!Bgufs!bekvtunfou!pg!efqsfdjbujpo-!gjyfe!bttfut!cbmbodf!xjmm!cf!!2-31-111!,!!21-111!>!!2-41-111/
)3* Gps!bekvtunfou!pg!tupdl!wbmvf-!Qspgju!boe!Mptt!Bddpvou!xjmm!cf!efcjufe!boe!Jowfoupsjft!Bddpvou!xjmm!cf!dsfejufe!cz!!6-111/
)4* Gjobm!cbmbodf!pg!Qspgju!boe!Mptt!Bddpvou!xjmm!cf!;!!71-111!,!!21-111!Ï!!6-111!>!!76-111/
(ii) In the books of AB Ltd.

Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!B!Mue/!B0d 4-11-111
Gjyfe!Bttfut!B0d Es/ 2-61-111
Up!Hfofsbm!Sftfswf!B0d!\!71-111!Ï!)!4-11-111!Ï!3-61-111*^ 21-111
)Cfjoh!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!boe!uif!ejggfsfodf!cfuxffo!tibsf!dbqjubm!jttvfe
boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!B!Mue/-!bekvtufe!bhbjotu!sftfswf*
Mjrvjebups!pg!B!Mue/!B0d Es/ 4-11-111
Up!Mjrvjebups!pg!C!Mue/!B0d 3-11-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!C!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Gjyfe!Bttfut!B0d!)!2-31-111!,!21-111* Es/ 2-41-111
Jowfoupsjft!B0d!)!91-111!Ï!6-111* Es/ 86-111
Up!Sftfswf!B0d!)!51-111!Ï!51-111*!\Opuf!2^ Ojm
Up!Qspgju!boe!Mptt!B0d!)!71-111!,!21-111!Ï!6-111!Ï!21-111^!)Opuf!2* 66-111
)Cfjoh!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!boe!uif!ejggfsfodf!cfuxffo!tibsf!dbqjubm!jttvfe
boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!C!Mue/-!bekvtufe!bhbjotu!sftfswf!boe!Qspgju!boe!Mptt!Bddpvou*
Mjrvjebups!pg!C!MMue!B0d Es/ 3-11-111
Xpsljoh!Opuf!;
)2* Uif!!ejggfsfodf!!cfuxffo!!tibsf!!dbqjubm!!jttvfe!!boe!uif!bnpvou!pg!tibsf!dbqjubm!pg!C!Mue!jt!!61-111!)!3-11-111!Ï!!2-61-111*/
!51-111!jt!bekvtufe!bhbjotu!sftfswf!boe!uif!cbmbodf!pg!!21-111!jt!bekvtufe!bhbjotu!Qspgju!boe!Mptt!Bddpvou/
Bekvtunfou!jo!sftqfdu!pg!fydftt!efqsfdjbujpo!boe!dibohf!jo!uif!wbmvf!pg!tupdl!bmtp!up!cf!nbef!bhbjotu!uif!Qspgju!boe!Mptt!Bddpvou
cbmbodf/
AB Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 7-66-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
UPUBM 7-66-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )3*!Sftfswf!boe!Tvsqmvt
Bvuipsjtfe!Dbqjubm!; Hfofsbm!Sftfswf 21-111
///!Frvjuz!Tibsft!pg!!///!fbdi +++ Qspgju!boe!Mptt!B0d :6-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; 2-16-111
61-111!Frvjuz!Tibsft!pg!!21!fbdi )4*!Usbef!Qbzbcmf
)Bmm!uif!tibsft!ibwf!cffo!bmmpuufe!bt!gvmmz!qbje!vq-! Dsfejupst!)!41-111!,!!31-111* 61-111
qvstvbou!up!b!dpousbdu!xjuipvu!qbznfou!cfjoh ! )5*!Gjyfe!Bttfut
sfdfjwfe!jo!dbti* 6-11-111 Ubohjcmf!Bttfut!)!2-61-111!,!!2-41-111* 3-91-111
)6*!Jowfoupsjft!)!81-111!,!!86-111* 2-56-111
)7*!Usbef!Sfdfjwbcmft!)!91-111!,!!51-111* 2-31-111
)8*!Dbti!boe!Dbti!Frvjwbmfou!)!91-111!,!!41-111* 2-21-111
Criticisms of Pooling of Interests Method

2/ Cz!jhopsjoh!uif!gbjs!wbmvf!pg!uif!bttfut!pg!uif!usbotgfsps!dpnqboz-!uif!usbotgfsff!dpnqboz!ibt!b!mpxfs
efqsfdjbujpo!boe!bnpsujtbujpo!dibshf!boe!uifsfgpsf!ijhifs!sfuvso!po!dbqjubm!fnqmpzfe!boe!fbsojoht
qfs!tibsf/
3/ Qppmjoh!pg!joufsftut!nfuipe!epft!opu!sfdpse!boz!bdrvjsfe!bttfu-!ps!mjbcjmjujft!uibu!xfsf!opu!qsfwjpvtmz
sfdpsefe!boe!uivt!nbtlt!uifjs!qsftfodf/
4/ Qppmjoh!pg!joufsftut!nfuipe!nbz!mfbe!up!#jotubou!fbsojoht#!xifo!dpncjobujpot!bsf!dpotvnnbufe!mbuf
jo!uif!gjtdbm!zfbs-!cfdbvtf!uif!fbsojoht!pg!uif!qppmfe!dpnqbojft!bsf!dpncjofe!gps!uif!foujsf!zfbs/
5/ Beejujpobm!fbsojoh!dpvme!cf!dsfbufe!jg!bttfut!bdrvjsfe!jo!uif!qppmjoh!bsf!tpme!bu!bnpvout!dpotjefsbcmz
hsfbufs!uibo!uifjs!cppl!wbmvft/
6/ Voefs! uif! qppmjoh! pg! joufsftut! nfuipe-! sfbefst! pg! gjobodjbm! tubufnfou! dboopu! ufmm! ipx! nvdi! xbt
jowftufe!jo!uif!usbotdujpot-!ops!dbo!uifz!usbdl!uif!tvctfrvfou!qfsgpsnbodf!pg!uif!jowftunfou/
7/ Tpnf!dpotjefs!uibu!uifsf!bsf!op!usvf!nfshfst<!pof!dpnqboz!jofwjubcmz!epnjobuft!bopuifs/
8/ Bmm! dptut! bttpdjbufe! xjui! bnbmhbnbujpo-! f/h/-! bddpvoujoh-! mfhbm! boe! bqqsbjtbm! gfft-! bsf! dbqjubm
fyqfoejuvsf!jo!obuvsf/!Cvu!xjuipvu!dbqjubmjtjoh-!uiftf!bsf!bekvtufe!bhbjotu!sftfswf/!Uifsfgpsf-!uif!cbtjd
bddpvoujoh!qsjodjqmf!jt!wjpmbufe/
9/ Xifuifs!uif!qppmjoh!pg!joufsftut!nfuipe!ps!qvsdibtf!nfuipe!jt!vtfe-!uif!gvuvsf!dbti!gmpxt!bsf!uif
tbnf/!Uif!cpptu!jo!fbsojoht!voefs!qppmjoh!nfuipe!sfgmfdut!bsujgjdjbm!bddpvoujoh!ejggfsfodft-!sbuifs
uibo!sfbm!fdpopnjd!ejggfsfodft/
Purchase Method
Uijt!nfuipe!pg!bddpvoujoh!jt!bqqmjdbcmf!gps!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf/!Uif!gpmmpxjoh!qpjout
bsf!jnqpsubou!;
2/ Uif! bttfut! boe! mjbcjmjujft! pg! uif! usbotgfsps! dpnqboz! tipvme! cf! jodpsqpsbufe! jo! uif! cpplt! pg! uif
usbotgfsff!dpnqboz!fjuifs!bu!uifjs!fyjtujoh!dbsszjoh!bnpvout!ps!cz!bmmpdbujoh!uif!dpotjefsbujpo!up
joejwjevbm!jefoujgjbcmf!bttfut!boe!mjbcjmjujft!pg!uif!usbotgfsps!dpnqboz!po!uif!cbtjt!pg!uifjs!gbjs!wbmvft
po!uif!ebuf!pg!bnbmhbnbujpo/!Uif!jefoujgjbcmf!bttfut!boe!mjbcjmjujft!nbz!jodmvef!bttfut!boe!mjbcjmjujft
opu!sfdpsefe!jo!uif!gjobodjbm!tubufnfout!pg!uif!usbotgfsps!dpnqboz/
3/ Uif! sftfswft! pg! uif! usbotgfsps! dpnqboz-!puifs!uibo!tubuvupsz!sftfswft-!bsf!opu!jodpsqpsbufe!jo!uif
gjobodjbm!tubufnfout!pg!uif!usbotgfsff!dpnqboz/
4/ Jg!uif!qvsdibtf!dpotjefsbujpo!jt!hsfbufs!uibo!uif!ofu!bttfut!ublfo!pwfs!pg!uif!usbotgfsps!dpnqboz-!ju
tipvme!cf!usfbufe!bt!hppexjmm!boe!efcjufe!up!Hppexjmm!Bddpvou/!
Uijt!hppexjmm!xjmm!cf!bnpsujtfe!pwfs!b!qfsjpe!opu!fydffejoh!gjwf!zfbst!vomftt!tpnfxibu!mpohfs!qfsjpe
dbo!cf!kvtujgjfe/
Po!uif!puifs!iboe-!jg!uif!qvsdibtf!dpotjefsbujpo!jt!mftt!uibo!uif!ofu!bttfut!ublfo!pwfs!pg!uif!usbotgfsps
dpnqboz-!ju!tipvme!cf!usfbufe!bt!Dbqjubm!Sftfswf!boe!dsfejufe!up!Dbqjubm!Sftfswf!Bddpvou/
5/ Tubuvupsz!Sftfswft!pg!uif!usbotgfsps!dpnqboz!)f/h/-!Efwfmpqnfou!Bmmpxbodf!Sftfswf-!ps!Jowftunfou
Bmmpxbodf!Sftfswf*!sfubjo!uifjs!jefoujuz!jo!uif!gjobodjbm!tubufnfout!pg!uif!usbotgfsff!dpnqboz!jo!uif
tbnf!gpsn!jo!xijdi!uifz!bqqfbsfe!jo!uif!gjobodjbm!tubufnfout!pg!uif!usbotgfsps!dpnqboz/
6/ Tubuvupsz!Sftfswft!bsf!sfdpsefe!jo!uif!gjobodjbm!tubufnfout!pg!uif!usbotgfsff!dpnqboz!cz!qbttjoh!uif
gpmmpxjoh!fousz!;
! ! ! ! ! ! ! ! Bnbmhbnbujpo!Bekvtunfou!Bddpvou Es/ \xjui!uif!bnpvou^
! ! ! ! ! ! ! ! ! Up!Tubuvupsz!Sftfswf!Bddpvou
Bnbmhbnbujpo! Bekvtunfou! Bddpvou! xjmm! cf! tipxo! jo! uif! Cbmbodf! Tiffu! pg! uif! usbotgfsff! dpnqboz! bt
gpmmpxt;
Sftfswf!boe!Tvsqmvt!;
! ! ! Tubuvupsz!Sftfswf +++
! ! ! ! ! Mftt;!Bnbmhbnbujpo!Bekvtunfou!Bddpvou +++ ! ! Ojm
Jo!uijt!sftqfdu-!ju!jt!jnqpsubou!up!lopx!uibu!ÓBnbmhbnbujpo!Bekvtunfou!BddpvouÔ!vtfe!up!cf!tipxo!voefs
ÓNjtdfmmbofpvt!FyqfoejuvsfÔ!jo!uif!Dpnqbojft!Bdu-!2:67/!Jo!uif!Dpnqbojft!Bdu-!3124!uifsf!jt!op!tdpqf!pg
tipxjoh!ju!voefs!ÓNjtdfmmbofpvt!FyqfoejuvsfÔ/!Opxbebzt!nboz!dpnqbojft!bsf!tipxjoh!ju!voefs!ÓSftfswf
boe!TvsqmvtÔ!jo!uif!bcpwf!nboofs!bmsfbez!tipxo/
Xifo!uif!jefoujuz!pg!uif!tubuvupsz!sftfswft!jt!op!mpohfs!sfrvjsfe!up!cf!nbjoubjofe-!cpui!uif!Sftfswft!boe
uif!Bekvtunfou!bddpvout!bsf!sfwfstfe/
Distinction between Pooling of Interests Method and Purchase Method
Tm/!Op/ Qppmjoh!pg!Joufsftut!Nfuipe Tm/!Op/ Qvsdibtf!Nfuipe
2/ Uijt! nfuipe! jt! bepqufe! jo! uif! dbtf! pg 2/ Uijt! nfuipe! jt! bepqufe! jo! uif! dbtf! pg
Bnbmhbnbujpo!jo!uif!obuvsf!pg!Nfshfs Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf/
3/ Bmm!bttfut-!mjbcjmjujft-!sftfswft!boe!tvsqmvt!pg 3/ Pomz!bttfut!boe!mjbcjmjujft!ublfo!pwfs!gspn
uif!usbotgfsps!dpnqboz!bsf!jodpsqpsbufe!jo uif!usbotgfsps!dpnqboz!bsf!jodpsqpsbufe!jo
uif! gjobodjbm! tubufnfout! pg! uif! usbotgfsff uif! gjobodjbm! tubufnfout! pg! uif! usbotgfsff
dpnqboz!bu!cppl!wbmvf/ dpnqboz!fjuifs!bu!cppl!wbmvf!ps!bhsffe!wbmvf/
4/ Uijt! nfuipe! qspwjeft! jowftupst! xjui! mftt 4/ Uijt!nfuipe!qspwjeft!jowftupst!xjui!npsf
jogpsnbujpo/ jogpsnbujpo/
5/ Uijt!nfuipe!jhopsft!uif!wbmvft!fydibohfe 5/ Uijt!nfuipe!sfgmfdut!uif!wbmvft!fydibohfe
jo!bo!bnbmhbnbujpo/ jo!bo!bnbmhbnbujpo
6/ Uijt!nfuipe!epft!opu!sfdpse!boz!bdrvjsfe 6/ Uijt! nfuipe! sfwfbmt! bmm! ijeefo! bttfut! boe

bttfut!boe!mjbcjmjujft!uibu!xfsf!opu!qsfwjpvtmz mjbcjmjujft! pg! uif! usbotgfsps! dpnqboz! cz
sfdpsefe! jo! uif! cpplt! pg! uif! usbotgfsps sfdpsejoh!uifn!bu!gbjs!wbmvf!jo!uif!cpplt!pg
dpnqboz/ uif!usbotgfsff!dpnqboz/
7/ Uif! ejggfsfodf! cfuxffo! uif! dpotjefsbujpo 7/ Uif! ejggfsfodf! cfuxffo! uif! qvsdibtf
boe!tibsf!dbqjubm!pg!uif!usbotgfsps!dpnqboz dpotjefsbujpo!boe!uif!ofu!bttfut!ublfo!pwfs
jt!bekvtufe!bhbjotu!sftfswft/!Op!hppexjmm!ps pg! uif! usbotgfsps! dpnqboz! jt! sfdpsefe! bt
dbqjubm! sftfswf! bddpvou! fnfshft! gspn! uijt hppexjmm!!ps!!dbqjubm!!sftfswf-!!bt!uif!dbtf
ejggfsfodf/ nbz!cf/
8/ Bmm!dptut!bttpdjbufe!xjui!bnbmhbnbujpo!bsf 8/ Bmm!dptut!bttpdjbufe!xjui!bnbmhbnbujpo!bsf
opu!dbqjubmjtfe!cvu!bekvtufe!bhbjotu!sftfswf/ dbqjubmjtfe/
9/ Voefs! uijt! nfuipe-! op! Bnbmhbnbujpo 9/ Voefs! uijt! nfuipe! Bnbmhbnbujpo
Bekvtunfou!Bddpvou!jt!pqfofe!jo!uif!cpplt Bekvtunfou!Bddpvou!nvtu!cf!pqfofe!jo!uif
pg!uif!usbotgfsff!dpnqboz/ cpplt!pg!uif!usbotgfsff!dpnqboz!gps!dbssz
gpsxbse!pg!boz!#Tubuvupsz!Sftfswf#/
Accounting Entries in the Books of the Transferor Company
Journal Entries
1. For transferring different assets to Realisation Account
! ! ! Up!Tvoesz!Bttfut!Bddpvou ! ! \Joejwjevbmmz-!bu!cppl!wbmvf^
Points to remember in this connection :
)b* Gps!uijt!qvsqptf!bhsffe!wbmvbujpot!bsf!bctpmvufmz!jnnbufsjbm/
)c* Jg!uif!dbti!jo!iboe!boe!dbti!bu!cbol!bsf!opu!ublfo!pwfs!cz!uif!usbotgfsff!dpnqboz-!uiftf!tipvme
opu!cf!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/
)d* Puifs!bttfut-!fwfo!jg!uifz!bsf!opu!ublfo!cz!uif!usbotgfsff!dpnqboz-!tipvme!bmtp!cf!usbotgfssfe!up
Sfbmjtbujpo!Bddpvou/
)e* Hppexjmm-!Qbufout!boe!Usbefnbsl-!fud/-!bsf!bmtp!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/
2. For transferring different liabilities to Realisation Account

Mjbcjmjujft!Bddpvou Es/!\Joejwjevbmmz-!bu!cppl!wbmvft^
Points to remember in this connection :
)b* Jufnt!jo!uif!obuvsf!pg!ÓQspwjtjpotÔ!bsf!up!cf!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!pomz-!f/h/-!Fnqmpzfft
Qspwjefou! Gvoe<! Qspwjtjpo! gps! Ubybujpo-! Qfotjpo! Gvoe-! Qspwjtjpo! gps! Cbe! Efcut-! Qspwjtjpo! gps
Efqsfdjbujpo-!fud/
)c* Jufnt! jo! uif! obuvsf! pg! ÓSftfswftÔ! bsf! opu! up! cf! usbotgfssfe! up! Sfbmjtbujpo! Bddpvou/! Uiftf! bsf
usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou/!Fybnqmft!bsf!;!Ejwjefoe!Frvbmjtbujpo!Gvoe<!Qspgju
boe!Mptt!Bddpvou!Dsfeju!Cbmbodf<!Xpslnfo!Dpnqfotbujpo!Gvoe-!fud/
)d* Jg! boz! mjbcjmjuz! jt! opu! ublfo! pwfs! cz! uif! usbotgfsff! dpnqboz-! uibu! tipvme! opu! cf! usbotgfssfe! up
Sfbmjtbujpo!Bddpvou/!Boz!qspgju!ps!mptt!po!ejtdibshf!pg!tvdi!mjbcjmjuz!jt!usbotgfssfe!up!Sfbmjtbujpo
Bddpvou/
3. For transferring Equity Share Capital, Reserve and Surplus, etc.

Frvjuz!Tibsf!Dbqjubm!Bddpvou Es/
Hfofsbm!Sftfswf!Bddpvou Es/
Qspgju!boe!Mptt!Bddpvou Es/
Opuf!;!Qspgju!boe!Mptt!Bddpvou!efcju!cbmbodf!jt!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou!cz!efcjujoh
Tvoesz!Tibsfipmefst!Bddpvou!boe!dsfejujoh!Qspgju!boe!Mptt!Bddpvou!fud/
4. Like Equity Share Capital, Preference Share Capital is closed by transferring to Preference
Shareholders Account. The entry for this will be :
Qsfgfsfodf!Tibsf!Dbqjubm!Bddpvou Es/
! ! ! Up!Qsfgfsfodf!Tibsfipmefst!Bddpvou
Opuf!;!Jg!uif!qsfgfsfodf!tibsfipmefst!bsf!qbje!npsf!ps!mftt!uibo!uif!bnpvou!evf!up!uifn!bt!qfs!Cbmbodf
Tiffu-!uif!ejggfsfodf!jt!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/
5. For purchase consideration due from transferee company
Usbotgfsff!Dpnqboz!Bddpvou Es/\Qvsdibtf!dpotjefsbujpo^
6. On receiving purchase consideration from the transferee company
Frvjuz!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/
Qsfgfsfodf!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/
Efcfouvsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/
7. Entries for liquidation expenses are passed as follows:
)j*!Jg!uif!mjrvjebujpo!fyqfotft!bsf!cpsof!cz!uif!usbotgfsps!dpnqboz
)jj*!Jg!uif!mjrvjebujpo!fyqfotft!bsf!cpsof!cz!uif!usbotgfsff!dpnqboz
! ! ! \!Op!Fousz!^
8. For realisation of assets not taken over by the transferee company
Cbol!Bddpvou Es/
9. For discharge of liabilities not taken over by the transferee company
Mjbcjmjujft!Bddpvou Es/
Opuf!;!Boz!qspgju!ps!mptt!po!ejtdibshf!pg!mjbcjmjujft!bsf!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/
10. For payment to preference shareholders
Qsfgfsfodf!Tibsfipmefst!Bddpvou Es/
! ! ! Up!Qsfgfsfodf!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou
! ! ! Up!Cbol!Bddpvou!)Jg!boz*
11. For loss on realisation
12. For profit on realisation
! ! ! Up!Tvoesz!Tibsfipmefst!!Bddpvou
13. For final payment to Equity Shareholders
! ! ! Up!Frvjuz!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou
! ! ! Up!Cbol!Bddpvou!)Jg!boz*!Bddpvou
Opuf!;!Bgufs!qbznfou!up!frvjuz!tibsfipmefst-!bmm!bddpvout!jo!uif!cpplt!pg!uif!usbotgfsps!dpnqboz!xjmm!cf!dmptfe/
Accounting Entries in the Books of the Transferee Company

Journal Entries
1. On amalgamation of the business
Cvtjoftt!Qvsdibtf!Bddpvou Es/ \xjui!qvsdibtf!dpotjefsbujpo^
2. For assets and liabilities taken over
)j*!Jg!uif!ofu!bdrvjsfe!bttfu!jt!frvbm!up!qvsdibtf!dpotjefsbujpo
Bttfut!Bddpvou Es/ \Joejwjevbmmz-!bu!bhsffe!wbmvft^
! ! ! Up!Mjbcjmjujft!Bddpvou \Joejwjevbmmz^
! ! ! Up!Cvtjoftt!Qvsdibtf!Bddpvou \Qvsdibtf!dpotjefsbujpo^
)jj*!Jg!uif!ofu!bdrvjsfe!bttfu!jt!npsf!uibo!uif!qvsdibtf!dpotjefsbujpo
Bttfut!Bddpvou Es/ \Joejwjevbmmz-!bu!bhsffe!wbmvft^
! ! ! Up!Mjbcjmjujft!Bddpvou \Joejwjevbmmz^
! ! ! Up!Cvtjoftt!Qvsdibtf!Bddpvou \Qvsdibtf!dpotjefsbujpo^
! ! ! Up!Dbqjubm!Sftfswf!Bddpvou \Ejggfsfodf^
)jjj*!Jg!uif!ofu!bdrvjsfe!bttfu!jt!mftt!uibo!uif!qvsdibtf!dpotjefsbujpo
Hppexjmm!Bddpvou Es/! \Ejggfsfodf^
Bttfut!Bddpvou Es/! \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! Up!Mjbcjmjujft!Bddpvou ! ! ! \Joejwjevbmmz^
! ! ! Up!Cvtjoftt!Qvsdibtf!Bddpvou
3. When purchase consideration is satisfied
Mjrvjebups!pg!Usbotgfsps!Dpnqboz!Bddpvou Es/
! ! ! Up!Frvjuz!Tibsf!Dbqjubm!Bddpvou
! ! ! Up!Tfdvsjujft!Qsfnjvn!Bddpvou
! ! ! Up!Qsfgfsfodf!Tibsf!Dbqjubm!Bddpvou
4. When liquidation expenses are incurred
Hppexjmm!Bddpvou Es/
5. When formation expenses are incurred
Qsfmjnjobsz!Fyqfotft!Bddpvou Es/
6. When there are both goodwill and capital reserve, it can be set off against each other with
lower value ū only net amount will appear in the new Balance Sheet.
! ! Dbqjubm!Sftfswf!Bddpvou Es/
! ! ! ! Up!Hppexjmm!Bddpvou
7. When new shares/debentures are issued
! )j*!Cbol!Bddpvou Es/
! ! ! ! Up!Tibsf!Bqqmjdbujpo!Bddpvou
! ! ! ! Up!Efcfouvsf!Bqqmjdbujpo!Bddpvou
! )jj*!Tibsf!Bqqmjdbujpo!Bddpvou Es/
! ! ! Efcfouvsf!Bqqmjdbujpo!Bddpvou Es/
! ! ! ! Up!Tibsf!Dbqjubm!Bddpvou
! ! ! ! Up!Efcfouvsf!Bddpvou
Opuf!;!Xf!bttvnf!uibu!bmm!npofz!jt!qbzbcmf!po!bqqmjdbujpo!boe!tibsft!bsf!jttvfe!bu!qbs/
Illustration 14
B!Mue/!boe![!Mue/!bsf!fohbhfe!jo!tjnjmbs!mjof!pg!cvtjoftt/!
Uifz!efdjefe!up!bnbmhbnbuf!uifjs!cvtjoftt!bt!po!2tu!Bqsjm-!3129!cz!gpsnjoh!K!Mue/-!xjui!bo!bvuipsjtfe!tibsf!dbqjubm!pg
!81-11-111<!dpotjtujoh!pg!7-11-111!Frvjuz!Tibsft!pg!!21!fbdi!boe!2-11-111-!:&!Dvnvmbujwf!Qsfgfsfodf!Tibsft!pg!!21
fbdi/!
Uif!Cbmbodf!Tiffut!pg!B!Mue/!boe![!Mue/!bt!po!42tu!Nbsdi-!3129!bsf!bt!gpmmpxt!;
Balance Sheets of A Ltd. and Z Ltd. as at 31st March, 2018
Opuf B!Mue/ [!Mue/
)2* )3* )4* )5*
! ! ! ! ! ! ! ! ! ! ! ! ! !9&!Qsfgfsfodf!Tibsf!pg!!21!fbdi 21-11-111 Ð
)c*!Sftfswft!boe!Tvsqmvt!Ð 27-11-111 Ð
! ! ! Hfofsbm!Sftfswf 2-91-111 75-111
! ! ! Qspgju!boe!Mptt!Bddpvou
)c*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 2-11-111 53-111
UPUBM 69-91-111 :-17-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð
! ! ! ! ! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoht 23-11-111 Ð
! ! ! ! ! ! ! ! ! ! ! ! Qmbou 42-11-111 Ð
! ! ! ! ! ! ! ! ! ! ! ! Gvsojuvsft Ð 2-:1-111
! ! ! ! ! ! ! ! ! ! ! ! Wfijdmft Ð 91-111
! ! ! ! ! ! )jj*!!Joubohjcmf!Bttfut!Ð!Qbufout 5-11-111 Ð
)c*!Jowfoupsjft 8-11-111 5-89-111
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 2-71-111 2-35-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!bu!Cbol 4-31-111 45-111
UPUBM 69-91-111 :-17-111
Uif!gpmmpxjoh!ufsnt!xfsf!bhsffe!vqpo!cz!uif!qbsujft!;
)2* K!Mue/!up!bmmpu!5-61-111!Frvjuz!tibsft!A!!21!fbdi!up!B!Mue/-!boe!qbz!dbti!!21-:1-111!bt!dpotjefsbujpo!pg!xipmf
pg!bttfut!fydfqu!cbol!cbmbodf/
)3* [!Mue/-!jt!up!sfdfjwf!86-111!Frvjuz!tibsft!A!!21!fbdi!boe!dbti!!23-111!bt!dpotjefsbujpo!gps!xipmf!pg!bttfut
fydfqu!uif!cbol!cbmbodf/
)4* Bmm!bttfut!bsf!ublfo!pwfs!bu!cppl!wbmvf/
)5* K!Mue/-!jt!up!jttvf!sfnbjojoh!Frvjuz!tibsft!boe!Qsfgfsfodf!tibsft!bu!qbs!gps!dbti/!Uijt!jttvf!jt!gvmmz!tvctdsjcfe
boe!qbje.vq/
)6* Cpui!B!Mue/-!boe![!Mue/-!bsf!up!qbz!puifs!mjbcjmjujft!boe!Qsfgfsfodf!tibsfipmefst!joejwjevbmmz/
)7* K!Mue/-!jt!up!qbz!boe!cfbs!mjrvjebujpo!fyqfotft!pg!!21-111!gps!B!Mue/-!boe!!5-111!gps![!Mue/!Uif!gpsnbujpo
fyqfotft!pg!K!Mue/-!jt!!47-111/
Tipx!ofdfttbsz!kpvsobm!fousjft!jo!uif!cpplt!pg!B!Mue/!boe![!Mue/!Bmtp!qbtt!uif!kpvsobm!fousjft!jo!uif!cpplt!pg!K!Mue!boe
tipx!uif!Cbmbodf!Tiffu!pg!K/!Mue/

Qbsujdvmbst B/!Mue/ [/!Mue/
)j*! Frvjuz!Tibsft!Ð!5-61-111!A!!21 56-11-111
! ! ! ! ! ! ! ! ! ! !86-111!A!!21 8-61-111
)jj*! Dbti 21-:1-111 23-111
! 66-:1-111 8-73-111
Opuf!;!Mjrvjebujpo!fyqfotft!bsf!opu!jodmvefe!xijmf!dbmdvmbujoh!qvsdibtf!dpotjefsbujpo!bt!qfs!BTÐ25/
Journal Dr. Cr.
Bqsjm!2! Up!Mboe!boe!Cvjmejoht!B0d 23-11-111
Up!Qmbou!B0d 42-11-111
Up!Qbufou!B0d 5-11-111
bnbmhbnbujpo*!
K/!Mue/!B0d Es/ 66-:1-111
Up!Sfbmjtbujpo!B0d 66-:1-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!K/!Mue/*
Tibsft!jo!K/!Mue/!B0d! Es/ 56-11-111
Cbol!B0d! Es/ 21-:1-111
Up!K/!Mue/!B0d 66-:1-111
)Cfjoh!uif!sfdfjqu!pg!qvsdibtf!dpotjefsbujpo!gspn!K/!Mue/*
Tvoesz!Dsfejupst!B0d Es/ 2-11-111
9&!Qsfgfsfodf!Tibsf!Dbqjubm!B0d Es/ 21-11-111
Up!Cbol!B0d 22-11-111
)Cfjoh!uif!qbznfou!pg!Tvoesz!Dsfejupst!boe!9&!Qsfgfsfodf!Tibsf!Dbqjubm*
Hfofsbm!Sftfswf!B0d Es/ 27-11-111
Qspgju!boe!Mptt!B0d Es/ 2-91-111
)Cfjoh!uif!usbotgfs!pg!frvjuz!Tibsf!Dbqjubm-!Hfofsbm!Sftfswf!boe!Qspgju!boe!Mptt!cbmbodf!up
Tvoesz!Tibsfipmefst!Bddpvou*!
Sfbmjtbujpo!B0d Es/ 41-111
Up!Tvoesz!Tibsfipmefst!B0d 41-111
)Cfjoh!uif!qspgju!po!Sfbmjtbujpo!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
Up!Tibsft!jo!K/!Mue/!B0d 56-11-111
Up!Cbol!B0d 4-21-111
)Cfjoh!uif!gjobm!qbznfou!up!tibsfipmefst*
In the books of Z Ltd.
Journal Dr. Cr.
Bqsjm!2! Up!Gvsojuvsft!B0d 2-:1-111
Up!Wfijdmft!B0d 91-111
bnbmhbnbujpo*!
K/!Mue/!B0d Es/ 8-73-111

)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!K/!Mue/*
Tibsft!jo!K/!Mue/!B0d! Es/ 8-61-111
Cbol!B0d! Es/ 23-111
Up!K/!Mue/!B0d 8-73-111
)Cfjoh!uif!sfdfjqu!pg!qvsdibtf!dpotjefsbujpo!gspn!K/!Mue/*
Up!Cbol!B0d 53-111
)Cfjoh!uif!Tvoesz!Dsfejupst!qbje!pgg*
)Cfjoh!uif!usbotgfs!pg!Frvjuz!Tibsf!Dbqjubm-!Qspgju!boe!Mptt!Bddpvou!cbmbodf!up!Tvoesz
Tibsftipmefst!Bddpvou*!
Up!Tibsft!jo!K/!Mue/!B0d 8-61-111
Up!Cbol!B0d 5-111
)Cfjoh!uif!gjobm!qbznfou!up!tibsfipmefst*
Working Notes :
Ebuf Qbsujdvmbst B!Mue/ [!Mue/ Ebuf Qbsujdvmbst B!Mue/ [!Mue/

3129 Up!Mboe!boe!Cvjmejoht!B0d 23-11-111 Ð 3129 Cz!K!Mue!B0d 66-:1-111 8-73-111
Bqsjm!2 Up!Qmbou!B0d 42-11-111 Ð Bqsjm!2 Cz!Tvoesz!Tibsfipmefst!B0d Ð 2-21-111
Up!Gvsojuvsft!B0d Ð 2-:1-111
Up!Wfijdmft!B0d Ð 91-111
Up!Qbufout!B0d 5-11-111 Ð
Up!Jowfoupsjft!B0d 8-11-111 5-89-111
Up!Efcupst!B0d 2-71-111 2-35-111
Up!Tvoesz!Tibsfipmefst!B0d 41-111 Ð
66-:1-111 9-83-111 66-:1-111 9-83-111
Dr. (2) Bank Account Cr.
Ebuf Qbsujdvmbst B!Mue/!)* [!Mue/!)* Ebuf Qbsujdvmbst B!Mue/!)* [!Mue/!)*
3129 Up!Cbmbodf!c0e 4-31-111 45-111 3129 Cz!9&!Qsfg/!Tibsf!Dbqjubm!B0d 21-11-111 Ð
Bqsjm!2 Up!K!Mue/!B0d 21-:1-111 23-111 Bqsjm!2 Cz!Tvoesz!Dsfejupst!B0d 2-11-111 53-111
Cz!Tvoesz!Tibsfipmefst!B0d 4-21-111 5-111
25-21-111 57-111 25-21-111 57-111
In the books of J Ltd.
Journal Dr. Cr.
Nbs/!42 Up!Mjrvjebups!pg!B!Mue!B0d 66-:1-111
Up!Mjrvjebups!pg![!Mue!B0d 8-73-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebupst!pg!B!Mue!boe![!Mue*!
Hppexjmm!B0d!)Cbmbodjoh!gjhvsf* Es/ 41-111
Qmbou!B0d Es/ 42-11-111
Qbufout!B0d Es/ 5-11-111

Up!Cvtjoftt!Qvsdibtf!B0d 66-:1-111
)Cfjoh!uif!ejggfsfou!bttfut!ublfo!pwfs!gspn!B!Mue/!!Uif!ejggfsfodf!cfuxffo!uif!qvsdibtf
dpotjefsbujpo!boe!ofu!bttfut!ublfo!pwfs!usbotgfssfe!up!Hppexjmm!Bddpvou*
Gvsojuvsft!B0d! Es/ 2-:1-111
Wfijdmft!B0d Es/ 91-111
Efcupst!B0d! Es/ 2-35-111
Up!Dbqjubm!Sftfswf!B0d 2-21-111
)Cfjoh!uif!ejggfsfou!bttfut!ublfo!pwfs!gspn![!Mue/!Uif!ejggfsfodf!cfuxffo!ofu!bttfut!ublfo!pwfs
boe!qvsdibtf!dpotjefsbujpo!usbotgfssfe!up!Dbqjubm!Sftfswf!Bddpvou*
Cbol!B0d Es/ 28-61-111
Up!Frvjuz!Tibsf!Bqqmjdbujpo!B0d 8-61-111
Up!:&!Dvnvmbujwf!Qsfgfsfodf!Tibsf!Bqqmjdbujpo!B0d 21-11-111
)Cfjoh!uif!bqqmjdbujpo!npofz!sfdfjwfe!gps!86-111!frvjuz!tibsft!boe!2-11-111!qsfgfsfodf!tibsft
A!!21!fbdi*
Frvjuz!Tibsf!Bqqmjdbujpo!B0d! Es/ 8-61-111
:&!Dvnvmbujwf!Qsfgfsfodf!Tibsf!Bqqmjdbujpo!B0d Es/ 21-11-111
Up!:&!Dvnvmbujwf!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 21-11-111
)Cfjoh!uif!jttvf!pg!86-111!frvjuz!tibsft!pg!!21!fbdi!boe!2-11-1111-!:&!Dvnvmbujwf
Qsfgfsfodf!Tibsft!pg!!21!fbdi!bt!gvmmz!qbje!bt!qfs!Cpbset!Sftpmvujpo!Op/!/!/!/!ebufe!/!/!/*!
Mjrvjebups!pg!B!Mue/!B0d Es/ 66-:1-111
Mjrvjebups!pg![!Mue/!B0d Es/ 8-73-111
Up!Cbol!B0d 22-13-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!qbje.pgg*
Hppexjmm!B0d Es/ 25-111
Up!Cbol!B0d 25-111
)Cfjoh!uif!mjrvjebujpo!fyqfotft!pg!!21-111!boe!!5-111!qbje!gps!B!Mue/!boe![!Mue/!sftqfdujwfmz*
Qsfmjnjobsz!Fyqfotft!B0d Es/ 47-111
Up!Cbol!B0d 47-111
)Cfjoh!gpsnbujpo!fyqfotft!!qbje*
Dbqjubm!Sftfswf!B0d Es/ 55-111
Up!Hppexjmm!B0d!)!41-111!,!!25-111* 55-111
)Cfjoh!uif!hppexjmm!bekvtufe!bhbjotu!uif!Dbqjubm!Sftfswf*
J Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)5*!Dvssfou!Mjbcjmjujft!; Ð
UPUBM 81-41-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! )jj*!!Joubohjcmf!Bttfut )5* 5-11-111
)e*!Dbti!boe!Dbti!Frvjwbmfout )8* 6-:9-111
UPUBM 81-41-111
Notes to Accounts :
7-11-111!Frvjuz!Tibsft!pg!!21!fbdi 71-11-111 Mboe!boe!Cvjmejoh 23-11-111
2-11-111-!:&!Dvnvmbujwf!Qsfgfsfodf!Tibsft!pg!!21!fbdi 21-11-111 Qmbou 42-11-111
81-11-111 Gvsojuvsft 2-:1-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Wfijdmft 91-111
7-11-111!Frvjuz!Tibsft!pg!!21!fbdi 71-11-111 56-81-111
2-11-111-!:&!Dvnvmbujwf!Qsfgfsfodf!Tibsft!pg!!21!fbdi 21-11-111 )5*!Joubohjcmf!Bttfut
)Pg!uif!bcpwf!tibsft!6-36-111!frvjuz!tibsft!pg!!21!fbdi! Qbufou 5-11-111
gvmmz!qbje!ibwf!cffo!jttvfe!gps!dpotjefsbujpo!puifs! ! )6*!Jowfoupsjft!)8-11-111!,!5-89-111* 22-89-111
uibo!dbti*
81-11-111
)3*!Sftfswf!boe!Tvsqmvt )7*!Usbef!Sfdfjwbcmft
Dbqjubm!Sftfswf 77-111 Tvoesz!Efcupst 3-95-111
Mftt;!Qsfmjnjobsz!Fyqfotft 47-111 )8*!Dbti!boe!Dbti!Frvjwbmfou
41-111 Cbol!)X/O/!2* 6-:9-111
Working Notes :
Dr. (1) Bank Account Cr.
3129 Up!Frvjuz!Tibsft!Bqqmjdbujpo!B0d 8-61-111 3129 Cz!Mjrvjebups!pg!B!Mue!B0d 21-:1-111
Bqsjm!2 Up!:&!Dvnvmbujwf!Qsfgfsfodf!Tibsf Bqsjm!2 Cz!Mjrvjebups!pg![!Mue!B0d 23-111
! ! ! Bqqmjdbujpo!B0d 21-11-111 ! ! # Cz!Hppexjmm!)Mjrvjebujpo!Fyqfotft*!B0d 25-111
!!# Cz!Qsfmjnjobsz!Fyqfotft!B0d 47-111
!!# Cz!Cbmbodf!d0e 6-:9-111
28-61-111 28-61-111
Illustration 15
Gpmmpxjoh!jt!uif!tvnnbsjtfe!Cbmbodf!Tiffu!pg!Z!Mue!bt!bu!42tu!Nbsdi-!3129!;
Balance Sheet of Y Ltd. as at 31st March, 2018
Opuf npvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
! ! ! ! ! ! Hfofsbm!Sftfswf 7-11-111
! ! ! ! ! ! Qspgju!boe!Mptt!Bddpvou 8-71-111
! ! ! ! ! ! Xpslnfo!Qspgju!Tibsjoh!Gvoe 4-11-111
)b*!Usbef!Qbzbcmft!Ð!Dsfejupst 5-11-111
UPUBM 61-71-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð
! ! ! ! ! ! ! ! ! ! ! ! Cvjmejoh 8-11-111
! ! ! ! ! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 24-11-111
! ! ! ! !)jj*!!!!Joubohjcmf!Bttfut!Ð!Hppexjmm 9-11-111
)b*!Jowfoupsjft 8-11-111
)c*!Usbef!Sfdfjwmft!Ð!Tvoesz!Efcupst :-11-111
)d*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!bu!Cbol 7-71-111
UPUBM 61-71-111
Y!Mue!efdjefe!up!bctpsc!uif!cvtjoftt!pg!Z!Mue!po!2tu!Bqsjm-!3129!bu!uif!sftqfdujwf!cppl!wbmvf!pg!bttfut!boe!usbef
mjbcjmjujft!fydfqu!cvjmejoh!xijdi!xbt!wbmvfe!bu!!23-11-111!boe!qmbou!boe!nbdijofsz!bu!!21-11-111-/
Uif!qvsdibtf!dpotjefsbujpo!xbt!qbzbcmf!bt!gpmmpxt!;
)j* Qbznfou!pg!mjrvjebujpo!fyqfotft!!6-111!boe!xpslnfoÔt!qspgju!tibsjoh!gvoe!bu!21&!qsfnjvn<
)jj* Jttvf!pg!frvjuz!tibsf!pg!!21!fbdi!gvmmz!qbje!bu!!22!qfs!tibsf!gps!fwfsz!qsfgfsfodf!tibsf!boe!fwfsz!frvjuz!tibsf
pg!Z!Mue!boe!b!qbznfou!pg!!5!qfs!frvjuz!tibsf!jo!dbti/
Dbmdvmbuf!uif!qvsdibtf!dpotjefsbujpo-!tipx!uif!ofdfttbsz!mfehfs!bddpvout!jo!uif!cpplt!pg!Z!Mue!boe!pqfojoh!kpvsobm
fousjft!jo!uif!cpplt!pg!Y!Mue \D/B/!)JQDD*!Ð!Bebqufe^
Solution (i) Calculation of Purchase Consideration

Qbsujdvmbst
)j*!Frvjuz!Tibsfipmefst!;
Frvjuz!Tibsft!)3-61-111!y!!22* 38-61-111
Dbti!)3-61-111!y!!5* 21-11-111
XpslnfoÔt!Qspgju!Tibsjoh!Gvoe!)!4-11-111!,!21&!Qsfnjvn* ! 4-41-111 51-91-111
)jj*!Qsfgfsfodf!Tibsfipmefst!;
Frvjuz!Tibsft!)2-11-111!y!!22* 22-11-111
Upubm!Qvsdibtf!Dpotjefsbujpo 62-91-111
Uvupsjbm!Opuf!;!Mjrvjebujpo!fyqfotft!pg!!6-111!xjmm!opu!cf!ublfo!joup!dpotjefsbujpo!gps!dbmdvmbujpo!pg
qvsdibtf!dpotjefsbujpo/
In the books of Y Ltd
3129 Up!Hppexjmm!B0d 9-11-111 3129 Cz!Dsfejupst!B0d 5-11-111
Bqs/!2 Up!Cvjmejoh!B0d 8-11-111 Bqs/!2 Cz!Y!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 62-91-111
Up!Tvoesz!Efcupst!B0d :-11-111
Up!XpslnfoÔt!Qspgju!Tibsjoh!Gvoe!B0d 41-111
Up!Qsfgfsfodf!Tibsfipmesft!B0d 2-11-111
Up!Frvjuz!Tibsfipmefst!B0d!)Qspgju* 4-:1-111
66-91-111 66-91-111
Dr. Equity Shareholders Account Cr.

3129 Up!Frvjuz!Tibsft!jo!Y!Mue!B0d 38-61-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 31-11-111
Bqs/!2 Up!Cbol!B0d 24-41-111 Bqs/!2 Cz!Hfofsbm!Sftfswf!B0d 7-11-111
Cz!XpslnfoÔt!Qspgju!Tibsjoh!Gvoe!B0d 4-41-111
Cz!Qspgju!boe!Mptt!B0d 8-71-111
Cz!Sfbmjtbujpo!B0d!)Qspgju* 4-:1-111
51-91-1111 51-91-111
Dr. Shares in X Ltd Account Cr.
3129 Up!Y!Mue!B0d 49-61-111 3129 Cz!Frvjuz!Tibsfipmefst!B0d 38-61-111
Bqs/!2 Bqs/!2 Cz!Qsfgfsfodf!Tibsfipmefst!B0d 22-11-111
49-61-111 49-61-111
Dr. Workmenŭs Profit Sharing Fund Account Cr.
3129 Up!Frvjuz!Tibsfipmefst!B0d 4-41-111 3129 Cz!Cbmbodf!c0e 4-11-111
Bqs/!2 Bqs/!2 Cz!Sfbmjtbujpo!B0d 41-111
4-41-111 4-41-111
3129 Up!Frvjuz!Tibsft!jo!Y!Mue!B0d 22-11-111 3129 Cz!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 21-11-111
Bqs/!2 Bqs/!2 Cz!Sfbmjtbujpo!B0d!)Fyusb!Qbznfou* 2-11-111
22-11-111 22-11-111
Dr. Bank Account Cr.
3129 Up!Y!Mue!B0d 24-41-111 3129 Cz!Frvjuz!Tibsfipmefst!B0d 24-41-111
Bqs/!2 Bqs/!2
24-41-111 24-41-111
Dr. X Ltd Account Cr.
3129 Up!Sfbmjtbujpo!B0d 62-91-111 3129 Cz!Cbol!B0d 24-41-111
Bqs/!2 )Qvsdibtf!Dpotjefsbujpo* Bqs/!2 Cz!Frvjuz!Tibsft!jo!Y!Mue!B0d 49-61-111
62-91-111 62-91-111
(ii) In the books of X Ltd
Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!Z!Mue!B0d 62-91-111
Cvjmejoh!B0d Es/ 23-11-111
Tvoesz!Efcupst!B0d Es/ :-11-111
Cbol!B0d Es/ 7-71-111
Hppexjmm!B0d!)Cbmbodjoh!gjhvsf* Es/ 22-31-111
)Cfjoh!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs/!Uif!ejggfsfodf!cfuxffo!qvsdibtf!dpotjefsbujpo
boe!ofu!bttfut!ublfo!pwfs!usbotgfssfe!up!Hppexjmm!Bddpvou*
Mjrvjebups!pg!Z!Mue!B0d Es/ 62-91-111

Up!Cbol!B0d 24-41-111
Up!Tfdvsjujft!Qsfnjvn!B0d 4-61-111
)Cfjoh!uif!ejtdibshf!pg!qvsdibtf!dpotjefsbujpo!cz!jttvjoh!4-61-111!frvjuz!tibsft!pg!
!21!fbdi!bu!b!qsfnjvn!pg!!2!qfs!tibsf/!Uif!cbmbodf!bnpvou!qbje!cz!difrvf*
Up!Cbol!B0d 6-111
)Cfjoh!uif!mjrvjebujpo!fyqfotft!qbje!po!cfibmg!pg!Z!Mue*
Illustration 16
Uxp!dpnqbojft!Xfbl!Mue/!boe!Gffcmf!Mue/!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz!Sfdpwfsz!Mue/!Uif!Cbmbodf!Tiffut!pg
uxp!dpnqbojft!bsf!bt!voefs!;
Balance Sheets of Weak Ltd. and Feeble Ltd. as at ...
Opuf Xfbl!Mue/ Gffcmf!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsft!pg!!///!fbdi 9-11-111 6-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt!Bddpvou 2-11-111 3-11-111
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!21&!Efcfouvsft 2-31-111 Ð
)b*!Usbef!Qbzbcmft!Ð!Dsfejupst 2-91-111 2-11-111
UPUBM 23-11-111 9-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Joubohjcmf!Bttfut!Ð!Hppexjmm 2-51-111 Ð
)b*!Usbef!Sfdfjwbcmft!Ð!Efcupst 4-21-111 4-11-111
)c*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!bu!Cbol 8-61-111 6-11-111
UPUBM 23-11-111 9-11-111
Uif!qbtu!bwfsbhf!qspgjut!pg!Xfbl!Mue/!boe!Gffcmf!Mue/!xfsf!!71-111!boe!!51-111!sftqfdujwfmz/
Sfdpwfsz!!!Mue/!!!bhsffe!!up!!ublf!!pwfs!!!uif!!uxp!dpnqbojft!gps!uif!tvn!pg!!26-11-111!boe!up!ejtdibshf!bmm!mjbcjmjujft/
! 4-11-111! pg! uif! qvsdibtf! dpotjefsbujpo! cf! qbje! jo! dbti! boe! cbmbodf! jo! frvjuz! tibsft/! Ju! jt! bhsffe! uibu! cfgpsf! cfjoh
bnbmhbnbufe-!uif!efcupst!pg!uif!uxp!dpnqbojft!xjmm!cf!xsjuufo.epxo!up!uif!fyufou!pg!21&/!Uif!qspgju!po!dpowfstjpo!jt!up
cf!ejwjefe!cfuxffo!uif!uxp!dpnqbojft!jo!uif!tbnf!qspqpsujpo!bt!up!uif!qspgju!qsfwjpvtmz!fbsofe!cz!uifn/
Tipx!Cvtjoftt!Qvsdibtf!Bddpvou!jo!uif!cpplt!pg!Sfdpwfsz!Mue/!Bmtp!tipx!ipx!uif!Frvjuz!Tibsfipmefst!Bddpvou!pg
Xfbl!Mue/!boe!Gffcmf!Mue/!cf!dmptfe/
Solution
Ju!jt!bo!bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf!cfdbvtf!uif!qvsdibtf!dpotjefsbujpo!ibt!opu!cffo!tbujtgjfe!gvmmz!jo!frvjuz!tibsft/!!4-11-111!xbt
qbje!jo!dbti!pvu!pg!upubm!qvsdibtf!dpotjefsbujpo!pg!!26-11-111/
Working Notes : (1) Calculation of Goodwill / Capital Reserve
Qbsujdvmbst Xfbl!Mue/ Gffcmf!Mue/

Bttfut!ublfo!pwfs!;
Jowfoupsjft 4-21-111 4-11-111
Efcupst!)mftt!21&* 7-86-111 :-96-111 5-61-111 8-61-111
Mftt!;!Mjbcjmjujft!ublfo!pwfs!;
! ! 21&!Efcfouvsft 2-31-111 Ð
! ! Dsfejupst 2-91-111 4-11-111 2-11-111 2-11-111
Ofu!Bttfut!ublfo!pwfs 7-96-111 7-61-111
Upubm!ofu!bttfut!ublfo!pwfs!>!!)7-96-111!,!7-61-111*!>!!24-46-111/
Qvsdibtf!dpotjefsbujpo!>!!26-11-111/
Qspgju!po!dpowfstjpo!>!!)26-11-111!Ï!24-46-111*!>!!2-76-111/!Uijt!jt!bmtp!uif!hppexjmm!qbje!cz!Sfdpwfsz!Mue/!
Bhbjo-!qspgju!tibsjoh!sbujp!cfuxffo!Xfbl!Mue!boe!Gffcmf!Mue/!jt!;!!71-111!;!!51-111!>!4!;!3/
Uifsfgpsf-!qspgju!po!dpowfstjpo!pg!!2-76-111!xjmm!cf!tibsfe!cz!uif!uxp!dpnqbojft!bt!voefs!;
Xfbl!Mue/!Ð!!2-76-111!!406!>!!::-111<!Gffcmf!Mue/!Ð!!2-76-111!!306!>!!77-111/
(2) Calculation of Purchase Consideration of each Company

Ofu!Bttfut!ublfo!pwfs!)bt!bcpwf* 7-96-111 7-61-111
Bee!;!Qspgju!po!dpowfstjpo ::-111 77-111
Qvsdibtf!dpotjefsbujpo 8-95-111 8-27-111
(3) Statement Showing Mode of Payment
Uif!bcpwf!qvsdibtf!dpotjefsbujpo!xjmm!cf!tbujtgjfe!bt!voefs!bttvnjoh!uibu!uif!frvjuz!tibsft!pg!Sfdpwfsz!Mue/!jt!ejwjefe!frvbmmz!boe!uif!cbmbodf!cz
dbti!;

Frvjuz!Tibsft!jo!Sfdpwfsz!Mue/!)frvbmmz* 7-11-111 7-11-111
Dbti!)Cbmbodjoh!gjhvsf* 2-95-111 2-27-111
8-95-111 8-27-111
In the books of Recovery Ltd.
Dr. Business Purchase Account Cr.
Up!21&!Efcfouvsft!jo!Xfbl!Mue/!B0d 2-31-111 Cz!Hppexjmm!B0d ::-111
Up!Dsfejupst!B0d! 2-91-111 Cz!Jowfoupsjft!B0d 4-21-111
! ! )Mjbcjmjujft!ublfo!pwfs!gspn!Xfbl!Mue/* Cz!Efcupst!B0d 7-86-111
Up!Dsfejupst!B0d 2-11-111 ! ! )Ofu!bttfut!ublfo!pwfs!gspn!Xfbl!Mue/*
! ! )Mjbcjmjujft!ublfo!pwfs!gspn!Gffcmf!Mue/* Cz!Hppexjmm!B0d 77-111
Up!Frvjuz!Tibsf!Dbqjubm!B0d 23-11-111 Cz!Jowfoupsjft!B0d 4-11-111
Up!Cbol!B0d 4-11-111 Cz!Efcupst!B0d 5-61-111
! ! )Ofu!bttfut!ublfo!pwfs!gspn!Gffcmf!Mue/*
2:-11-111 2:-11-111
In the books of Weak Ltd.
Up!Hppexjmm!B0d!)xsjuufo.pgg* 2-51-111 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 9-11-111
Up!Efcupst!B0d!)xsjuufo.pgg* 86-111 Cz!Qspgju!boe!Mptt!B0d 2-11-111
Up!Frvjuz!Tibsft!jo!Sfdpwfsz!Mue/!B0d 7-11-111 Cz!Sfbmjtbujpo!B0d!)qspgju!po!dpowfstjpo* ::-111
:-::-111 :-::-111
In the books of Feeble Ltd.
Up!Efcupst!B0d!)xsjuufo.pgg* 61-111 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 6-11-111
Up!Frvjuz!Tibsft!jo!Sfdpwfsz!Mue/!B0d 7-11-111 Cz!Qspgju!boe!Mptt!B0d 3-11-111
Up!Cbol!B0d 2-27-111 Cz!Sfbmjtbujpo!B0d!)qspgju!po!dpowfstjpo* 77-111
8-77-111 8-77-111
Illustration 17
Uif!bcsjehfe!Cbmbodf!Tiffu!pg!Q!Mue/!bt!bu!42tu!Nbsdi-!3129!jt!bt!voefs!;
Balance Sheet of PLtd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!6-111!Frvjuz!Tibsft!pg!!211!fbdi 6-11-111
! ! ! ! ! ! ! ! ! ! ! ! ! 3-111-!21&!Qsfgfsfodf!Tibsft!pg!!211!fbdi 3-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt!Bddpvou )3-:6-111*
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!26&!Efcfouvsft 3-11-111
)b*!Tipsu.ufsn!Cpsspxjoht!Ð!Votfdvsfe!Mpbot 2-11-111
)c*!Usbef!Qbzbcmft!Ð!Dsfejupst 2-61-111
)d*!Puifs!Dvssfou!Mjbcjmjujft!Ð!Bddsvfe!Joufsftu!po!Efcupst 41-111
UPUBM 9-96-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! ! ! ! Gsffipme!Qsfnjtft 3-61-111
! ! ! ! ! ! ! ! ! ! Nbdijofsz 2-46-111
! ! ! ! ! )jj*!Joubohjcmf!Bttfut!Ð!Qbufout 81-111
)b*!Dvssfou!Jowftunfout
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 2-91-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Cbol!cbmbodf 61-111
UPUBM 9-96-111
Uif!gpmmpxjoh!tdifnf!pg!sfdpotusvdujpo!xbt!qbttfe!boe!bqqspwfe!cz!uif!dpvsu!;
)j* B!ofx!dpnqboz!QL!Mue/!up!cf!gpsnfe!up!ublf!pwfs!uif!foujsf!cvtjoftt!pg!Q!Mue/
)jj* QL! Mue/! up! jttvf! pof! frvjuz! tibsf! pg! ! 211-! ! 71! qbje.vq! jo! fydibohf! pg! fwfsz! uxp! tibsft! jo! Q! Mue/! up! uif
tibsfipmefst!xip!bhsff!xjui!uif!tdifnf/!Tibsfipmefst-!xip!ep!opu!bhsff!xjui!uif!tdifnf-!up!cf!qbje!A!!31
qfs!tibsf!jo!dbti/!Tvdi!tibsfipmefst!ipme!511!frvjuz!tibsft/
)jjj* Qsfgfsfodf!tibsfipmefst!up!hfu!26-!22&!qsfgfsfodf!tibsft!pg!!21!fbdi!jo!fydibohf!pg!3!qsfgfsfodf!tibsft!pg!Q!Mue/
)jw* Mjbcjmjuz!jo!sftqfdu!pg!26&!efcfouvsft!boe!joufsftu!bddsvfe!uifsfpo!up!cf!ublfo!pwfs!boe!ejtdibshfe!ejsfdumz!cz
QL!Mue/!cz!jttvf!pg!frvjuz!tibsft!pg!!211!fbdi!gvmmz!qbje.vq/
)w* Uif!dsfejupst!pg!Q!Mue/!xjmm!hfu!gspn!QL!Mue/!61&!pg!uifjs!evft!jo!dbti!boe!36&!jo!frvjuz!tibsft!pg!!211!fbdi
boe!uif!cbmbodf!up!cf!gpsfhpof!cz!uifn/
)wj* Uif!gsffipme!qsfnjtft!up!cf!sfwbmvfe!bu!31&!npsf/!Uif!wbmvf!pg!nbdijofsz!up!cf!sfevdfe!cz!44204&!boe!uibu!pg
efcupst!cz!21&/!Uif!wbmvf!pg!tupdl!up!cf!sfevdfe!up!!2-71-111!boe!qbufout!up!ibwf!op!wbmvf/
)wjj* Uif!qsfmjnjobsz!fyqfotft!bnpvoufe!up!!6-111/
Zpv!bsf!sfrvjsfe!up!qsfqbsf!ofdfttbsz!Mfehfs!Bddpvout!jo!uif!cpplt!pg!Q!Mue/!boe!qbtt!pqfojoh!kpvsobm!fousjft!jo!uif
cpplt!pg!QL!Mue/
Solution
Working Note : (1) Calculation of Purchase Consideration
Qbsujdvmbst !
Gps!Frvjuz!Tibsfipmefst!;
Frvjuz!Tibsft!)6-111!Ï!5-111*!0!3!y!!71 2-49-111
Dbti!)511!y!!31* 9-111 2-57-111
Gps!Qsfgfsfodf!Tibsfipmefst!;
22&!Qsfgfsfodf!Tibsft!)3-111!0!3!y!26!y!!21* 2-61-111
Qvsdibtf!Dpotjefsbujpo 3-:7-111
In the books of P Ltd.

3129 Up!Qbufout!B0d 81-111 3129 Cz!26&!Efcfouvsft!B0d 3-11-111
Bqs/!2 Up!Gsffipme!Qsfnjtft!B0d 3-61-111 Bqs/!2 Cz!Votfdvsfe!Mpbo!B0d 2-11-111
Up!Nbdijofsz!B0d 2-46-111 Cz!Dsfejupst!B0d 2-61-111
Up!Jowfoupsjft!B0d 3-11-111 Cz!Bddsvfe!Joufsftu!po!Efcfouvsft!B0d 41-111
Up!Efcupst!B0d 2-91-111 Cz!QL!Mue/!B0d!)Qvsdibtf!dpotjefsbujpo* 3-:7-111
Up!Cbol!B0d 61-111 Cz!Qsfgfsfodf!Tibsfipmefst!B0d 61-111
Cz!Frvjuz!Tibsfipmefst!B0d! 6:-111
! ! ! )Mptt!po!sfbmjtbujpo*
9-96-111 9-96-111
Dr. PK Ltd. Account Cr.

3129 Up!Sfbmjtbujpo!B0d 3-:7-111 3129 Cz!Frvjuz!Tibsft!jo!QL!Mue/!B0d 2-49-111
Bqs/!2 Bqs/!2 Cz!Cbol!B0d 9-111
Cz!22&!Qsfgfsfodf!Tibsft!jo!QL!Mue/!B0d 2-61-111
3-:7-111 3-:7-111

3129 Up!22&!Qsfgfsfodf!Tibsft!jo!QL!Mue/!B0d 2-61-111 3129 Cz!21&!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 3-11-111
Bqs/!2 Up!Sfbmjtbujpo!B0d 61-111 Bqs/!2
3-11-111 3-11-111

3129 Up!Qspgju!boe!Mptt!B0d 3-:6-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 6-11-111
Bqs/!2 Up!Sfbmjtbujpo!B0d!)Mptt* 6:-111 Bqs/!2
Up!Frvjuz!Tibsft!jo!QL!Mue/!B0d 2-49-111
Up!Cbol!B0d 9-111
6-11-111 6-11-111
In the books of PK Ltd.
Journal Dr. Cr.
3129 Cvtjoftt!Qvsdibtf!B0d Es/ 3-:7-111
Bqs/!2 Up!Mjrvjebups!pg!Q!Mue!B0d 3-:7-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Q!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*!
Gsffipme!Qsfnjtft!B0d!)!3-61-111!,!!61-111* Es/ 4-11-111
Nbdijofsz!B0d!)!2-46-111!Ï!!56-111* Es/ :1-111
Efcupst!B0d!)!2-91-111!Ï!!29-111* Es/ 2-73-111

Cbol!B0d Es/ 61-111
Up!26&!Efcfouvsft!jo!Q!Mue/!B0d 3-41-111
Up!Votfdvsfe!Mpbo!B0d 2-11-111
Up!Dsfejupst!B0d!)!2-61-111!Ï!!48-611* 2-23-611
Up!Cvtjoftt!Qvsdibtf!B0d 3-:7-111
Up!Dbqjubm!Sftfswf!B0d 34-611
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs*
Mjrvjebups!pg!Q!Mue/!B0d! Es/ 3-:7-111
Up!Cbol!B0d 9-111
)Cfjoh!uif!ejtdibshf!pg!qvsdibtf!dpotjefsbujpo*
26&!Efcfouvsft!jo!Q!Mue/!B0d! Es/ 3-41-111
)Cfjoh!26&!Efcfouvsft!jo!Q!Mue/!ejtdibshfe!cz!uif!jttvf!pg!3-411!frvjuz!tibsft!pg!!211!fbdi
gvmmz!qbje.vq*
Up!Cbol!B0d 86-111
Up!Frvjuz!Tibsf!Dbqjubm!B0d 48-611
)Cfjoh!uif!dsfejupst!pg!Q!Mue/!qbje.pgg*
Up!Cbol!B0d 6-111
)Cfjoh!uif!qsfmjnjobsz!fyqfotft!qbje.pgg*
Uvupsjbm!Opuf!;
Ju!jt!bo!bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf!cfdbvtf!uif!wbmvf!pg!ejggfsfou!bttfut!boe!mjbcjmjujft!bsf!up!cf!bekvtufe/
Illustration 18
Uif!Cbmbodf!Tiffu!pg!Nppo!Mjnjufe!bt!po!42tu!Nbsdi-!3129!xbt!bt!gpmmpxt!;
Balance Sheet of Moon Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
Sftfswf 21-111
Qspgju!boe!Mptt!Bddpvou )2-76-111*
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!:&!Efcfouvsft 2-11-111
)c*!Usbef!Qbzbcmft!Ð!Dsfejupst :1-111
UPUBM 6-46-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! ! ! ! ! Cvjmejoh 3-11-111
! ! ! ! ! ! ! ! ! ! ! Qmbou 2-71-111
)b*!Jowfoupsjft 41-111
)c*!Usbef!Sfdfjwbcmft!Ð!Efcupst 2-31-111
)d*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Cbol!cbmbodf 36-111
UPUBM 6-46-111
Po!2tu!Bqsjm-!3129!Tvo!Mjnjufe!xbt!gpsnfe!up!ublf!pwfs!uif!cvtjoftt!pg!Nppo!Mjnjufe!po!uif!gpmmpxjoh!ufsnt!;
)j* Efcfouvsft!xjmm!cf!ejtdibshfe!cz!uif!jttvf!pg!tvggjdjfou!ovncfs!pg!23&!Efcfouvsft!pg!Tvo!Mjnjufe!bt!xpvme
csjoh!uif!tbnf!bnpvou!pg!joufsftu/
)jj* Tibsfipmefst!xjmm!cf!jttvfe!3-511!Frvjuz!Tibsft!pg!!211!fbdi!pg!Tvo!Mjnjufe/
)jjj* Mjrvjebujpo!fyqfotft!pg!!3-111!xjmm!cf!qbje!cz!Tvo!Mjnjufe/
Qsfqbsf!uif!ofdfttbsz!Mfehfs!Bddpvout!up!dmptf!uif!cpplt!pg!Nppo!Mjnjufe/
Qbtt!uif!pqfojoh!kpvsobm!fousjft!jo!uif!cpplt!pg!Tvo!Mjnjufe!boe!qsfqbsf!uif!Cbmbodf!Tiffu!pg!Tvo!Mjnjufe!bttvnjoh
uibu!uif!bttfut!pg!Nppo!Mjnjufe!bsf!ublfo!pwfs!bu!36&!ejtdpvou/
Solution
(i) Calculation of Purchase Consinderation (ii) Calculation of Goodwill / Capital Reserve
Frvjuz!Tibsft!;!3-511!y!!211 3-51-111 Bttfut!ublfo!pwfs!;
Jttvf!pg!23&!efcfouvsft!up!qbz.pgg!:&!efcfouvsft!jt!opu!up!cf ! ! Cvjmejoh 2-61-111
jodmvefe!xijmf!dbmdvmbujoh!qvsdibtf!dpotjefsbujpo/!Tvdi ! ! Qmbou 2-31-111
efcfouvsft!xjmm!cf!ublfo!pwfs!cz!Tvo!Mue/!boe!uifo!ejtdibshfe/ ! ! Jowfoupsjft 33-611
Mjlfxjtf-!mjrvjebujpo!fyqfotft!xjmm!bmtp!opu!up!cf!jodmvefe/ ! ! Efcupst :1-111
! ! Cbol!)Opuf!3* 36-111 5-18-611
Mftt;!Mjbcjmjujft!ublfo!pwfs
! ! ! ! ! ! ! :&!Efcfouvsft!)Opuf!2* 86-111
! ! ! ! ! ! ! Dsfejupst :1-111 2-76-111
3-53-611
Mftt;!Qvsdibtf!Dpotjefsbujpo 3-51-111
Dbqjubm!Sftfswf 3-611
In the books of Moon Ltd.
3129 Up!Cvjmejoh!B0d 3-11-111 3129 Cz!:&!Efcfouvsft!B0d 2-11-111
Bqs/!2 Up!Qmbou!B0d 2-71-111 Bqs/!2 Cz!Dsfejupst!B0d :1-111
Up!Jowfoupsjft!B0d 41-111 Cz!Tvo!Mue!B0d!)Qvsdibtf!Dpotjefsbujpo* 3-51-111
Up!Efcupst!B0d 2-31-111 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 2-16-111
Up!Cbol!B0d 36-111 ! ! )Mptt!po!sfbmjtbujpo*
6-46-111 6-46-111
Dr. Sun Ltd. Account Cr.

3129 Up!Sfbmjtbujpo!B0d 3-51-111 3129 Cz!Frvjuz!Tibsft!jo!Tvo!Mue!B0d 3-51-111
Bqs/!2 Bqs/!2
Dr. Equity Shares in Sun Ltd. Account Cr.

3129 Up!Tvo!Mue!B0d 3-51-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 3-51-111
Bqs/!2 Bqs/!2
3129 Up!Qspgju!boe!Mptt!B0d 2-76-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 6-11-111
Bqs/!2 Up!Frvjuz!Tibsft!jo!Tvo!Mue!B0d 3-51-111 Bqs/!2 Cz!Sftfswf!B0d 21-111
Up!Sfbmjtbujpo!B0d!)Mptt* 2-16-111
6-21-111 6-21-111

Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!Nppo!Mue!B0d 3-51-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!Nppo!Mue!bt!qfs!bhsffnfou!ebufe!/!/!/*
Cvjmejoh!B0d Es/ 2-61-111
Qmbou!B0d Es/ 2-31-111
Efcupst!B0d Es/ :1-111
Cbol!B0d Es/ 36-111
Up!:&!Efcfouvsft!jo!Nppo!Mue!B0d!)Opuf!2* 86-111
Up!Dsfejupst!B0d :1-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!bt!qfs!bhsffnfou!ebufe!/!/!/!uif!ejggfsfodf
cfuxffo!uif!ofu!bttfut!ublfo!pwfs!boe!qvsdibtf!dpotjefsbujpo!usbotgfssfe!up!dbqjubm!sftfswf*
Mjrvjebups!pg!Nppo!Mue!B0d Es/ 3-51-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!ejtdibshfe!cz!uif!jttvf!pg!3-511!frvjuz!tibsft!pg!!211!fbdi*
:&!Efcfouvsft!jo!Nppo!Mue!B0d Es/ 86-111

)Cfjoh!:&!efcfouvsft!jo!Nppo!Mue!ejtdibshfe!cz!uif!jttvf!pg!23&!efcfouvsft*
Up!Dbti!B0d 3-111
)Cfjoh!uif!mjrvjebujpo!fyqfotft!qbje.pgg*
Sun Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Sftfswft!boe!Tvsqmvt )3* 611
)b*!Mpoh.ufsn!Cpsspxjoht )4* 86-111
)c*!Usbef!Qbzbcmft )5* :1-111
UPUBM 5-16-611
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! )j*! !Ubohjcmf!Bttfut )6* 3-81-111
)c*!Jowfoupsjft )7* 33-611
)d*!Usbef!Sfdfjwbcmft )8* :1-111
UPUBM 5-16-611
Notes to Accounts :
Bvuipsjtfe!Dbqjubm!; Dsfejupst :1-111
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! )6*!Gjyfe!Bttfut
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Ubohjcmf!Bttfut!;
3-511!Frvjuz!Tibsft!pg!!211!fbdi!gvmmz!qbje 3-51-111 Cvjmejoh 2-61-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo Qmbou 2-31-111
puifs!uibo!dbti* 3-81-111
)3*!Sftfswf!boe!Tvsqmvt )7*!Jowfoupsjft 33-611
Dbqjubm!Sftfswf!!)!3-611!Ï!3-111* 611
)4*!Mpoh.Ufsn!Cpsspxjoht )8*!Usbef!Sfdfjwbcmft
Tfdvsfe!; Efcupst :1-111
23&!Efcfouvsft 86-111 )9*!Dbti!boe!Dbti!Frvjwbmfout
Cbol!)!36-111!Ï!3-111* 34-111
Xpsljoh!Opuft!;
)2* Gbdf!wbmvf!pg!Efcfouvsft!pg!Nppo!Mue!xbt!!2-11-111/!Joufsftu!qbzbcmf!A!:&/!Uifsfgpsf-!uif!efcfouvsfipmefst!xfsf!hfuujoh
joufsftu!pg!!:-111!):&!pg!!2-11-111*/
Tvo!Mue!xjmm!jttvf!23&!Efcfouvsft!pg!tvdi!wbmvf!xijdi!xjmm!sftvmu!jo!tbnf!bnpvou!pg!joufsftu/!Uifsfgpsf-!uif!gbdf!wbmvf!pg!23&
Efcfouvsft!pg!Tvo!Mue!xjmm!cf!;!!:-111!0!23!!211!>!!86-111/
Jo!uif!cpplt!pg!Tvo!Mue/-!efcfouvsft!xjmm!cf!sfdpsefe!bu!!86-111!pomz/
)3* Cbol!xjmm!cf!ublfo!bu!!cppl!wbmvf!tjodf!ju!jt!b!npofubsz!bttfu/
Illustration 19
Gpmmpxjoh!jt!uif!Cbmbodf!Tiffu!pg!Tubs!Mue!bt!po!42tu!Nbsdi-!3129!;
Balance Sheet of Star Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!2-31-111!Frvjuz!Tibsft!pg!!21!fbdi 23-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð Dbqjubm!Sftfswf 31-111
Qspgju!boe!Mptt!Bddpvou )2-21-111*
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!Mpbo 4-71-111
UPUBM 28-81-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! )j*! !Ubohjcmf!Bttfut!;
! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz :-11-111
! ! ! ! ! ! ! Gvsojuvsf!boe!Gjuujoht 2-61-111
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 3-31-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Cbol!Cbmbodf 2-11-111
UPUBM 28-81-111
Po!2tu!Bqsjm-!3129!b!ofx!dpnqboz!Tvsbk!Mue!xbt!jodpsqpsbufe!xijdi!uppl!pwfs!gjyfe!bttfut!boe!tupdl!pg!Tubs!Mue!gps
!23-71-111!qbzbcmf!bt!!:-11-111!jo!uif!gpsn!pg!2-91-111!frvjuz!tibsft!pg!!6!fbdi!boe!!4-71-111!jo!uif!gpsn!pg!4-711-
23&!Npsuhbhf!Efcfouvsft!pg!!211!fbdi/!Mfoefs!bddfqufe!uif!efcfouvsft!jo!Tvsbk!Mue!jo!ejtdibshf!pg!uif!mpbo/!Efcupst
sfbmjtfe! ! 3-16-111/! Fyqfotft! pg! mjrvjebujpo! bnpvoufe! up! ! 9-111! boe! xfsf! nfu! cz! Tubs! Mue/! Uif! bwbjmbcmf! dbti! xbt
ejtusjcvufe!bnpoh!dsfejupst!jo!gvmm!tbujtgbdujpo!pg!uifjs!dmbjn/
Tipx!ofdfttbsz!Mfehfs!Bddpvout!up!dmptf!uif!cpplt!pg!Tubs!Mue!boe!esbx!uif!pqfojoh!Cbmbodf!Tiffu!pg!Tvsbk!Mue/
Solution
(i) Calculation of Purchase Consideration (ii) Calculation of Goodwill / Capital Reserve
Frvjuz!Tibsft!;!2-91-111!y!!6 :-11-111 Bttfut!ublfo!pwfs!;
Jttvf!pg!23&!npsuhbhf!efcfouvsft!up!qbz.pgg!mpbo ! ! Qmbou!boe!Nbdijofsz :-11-111
jt!opu!up!cf!jodmvefe!xijmf!dbmdvmbujoh!qvsdibtf ! ! Gvsojuvsf!boe!Gjyuvsf 2-61-111
dpotjefsbujpo/!Tvdi!mpbo!xjmm!cf!ublfo!pwfs!cz ! ! Jowfoupsjft 5-11-111 25-61-111
Tvsbk!Mue/!boe!uifo!ejtdibshfe/ Mftt;!Mjbcjmjujft!ublfo!pwfs!;
! ! Mpoh.ufsn!Mpbo 4-71-111
Ofu!Bttfut!ublfo!pwfs 21-:1-111
Mftt;!Qvsdibtf!Dpotjefsbujpo :-11-111
Dbqjubm!Sftfswf 2-:1-111
In the books of Star Ltd.
3129 Up!Qmbou!boe!Nbdijofsz!B0d :-11-111 3129 Cz!Mpbo!B0d 4-71-111
Bqsjm!2 Up!Gvsojuvsf!boe!Gjyuvsf!B0d 2-61-111 Bqsjm!2 Cz!Tvsbk!Mue!B0d :-11-111
Up!Jowfoupsjft!B0d 5-11-111 Cz!Dsfejupst!B0d!)Qspgju!po!qbznfou* 4-111
Up!Efcupst!B0d!)Mptt!po!sfbmjtbujpo* 26-111 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 3-21-111
Up!Cbol!B0d!)Sfbmjtbujpo!fyqfotft* 9-111 ! ! )Qspgju!po!sfbmjtbujpo*
25-84-111 25-84-111
Dr. Suraj Ltd. Account Cr.
3129 Up!Sfbmjtbujpo!B0d :-11-111 3129 Cz!Frvjuz!Tibsft!jo!Tvsbk!Mue!B0d :-11-111
Bqsjm!2 Bqsjm!2
Dr. Equity Shares in Suraj Ltd. Account Cr.
3129 Up!Tvsbk!Mue!B0d :-11-111 3129 Cz!Frvjuz!Tibsfipmefst!B0d :-11-111
Bqsjm!2 Bqsjm!2
Dr. Debtors Account Cr.
3129 Up!Cbmbodf!c0e 3-31-111 3129 Cz!Cbol!B0d 3-16-111
Bqsjm!2 Bqsjm!2 Cz!Sfbmjtbujpo!B0d 26-111
3-31-111 3-31-111
Dr. Bank Account Cr.
3129 Up!Cbmbodf!c0e 2-11-111 3129 Cz!Sfbmjtbujpo!B0d!)fyqfotft* 9-111
Bqsjm!2 Up!Efcupst!B0d 3-16-111 Bqsjm!2 Cz!Dsfejupst!B0d 3-:8-111
4-16-111 4-16-111
Dr. Creditors Account Cr.
3129 Up!Cbol!B0d 3-:8-111 3129 Cz!Cbmbodf!d0e 4-11-111
Bqsjm!2 Up!Sfbmjtbujpo!B0d 4-111 Bqsjm!2
4-11-111 4-11-111

3129 Up!Qspgju!boe!Mptt!B0d 2-21-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 23-11-111
Bqsjm!2 Up!Frvjuz!Tibsft!jo!Tvsbk!Mue!B0d :-11-111 Bqsjm!2 Cz!Dbqjubm!Sftfswf!B0d 31-111
23-31-111 23-31-111
Uvupsjbm!Opuf!;!Ju!jt!bo!bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf!cfdbvtf!bmm!uif!bttfut!boe!mjbcjmjujft!bsf!opu!ublfo!pwfs!cz!uif!usbotgfsff
dpnqboz/
Suraj Ltd
Balance Sheet as at . . .
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm )2* :-11-111
)c*!Sftfswft!boe!Tvsqmvt )3* 2-:1-111
)5*!Dvssfou!Mjbcjmjujft!; Ð
UPUBM 25-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
UPUBM 25-61-111
Notes to Accounts :
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! Qmbou!boe!Nbdijofsz :-11-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Gvsojuvsf!boe!Gjyuvsft 2-61-111
2-91-111!Frvjuz!Tibsft!pg!!6!fbdi!gvmmz!qbje :-11-111 21-61-111
)Bmm!uif!bcpwf!tibsft!ibwf!cffo!jttvfe!gps!dpotjefsbujpo )6*!Jowfoupsjft 5-11-111
puifs!uibo!dbti*
)3*!Sftfswf!boe!Tvsqmvt
Dbqjubm!Sftfswf!!)X/O/!2* 2-:1-111
)4*!Mpoh.Ufsn!Cpsspxjoht
Tfdvsfe!;
23&!Npsuhbhf!Efcfouvsft 4-71-111
Illustration 20
Uif!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bt!po!42tu!Nbsdi-!3129!xfsf!bt!gpmmpxt!;
Balance Sheets of A Ltd. and B Ltd. as at 31st March, 2018
Opuf B!Mue/ C!Mue/
Qbsujdvmbst Op/ )!Ô111* )!Ô111*
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm )2* 31-111 5-111
)c*!Sftfswft!boe!Tvsqmvt!Ð Hfofsbm!Sftfswf 9-111 Ð
Qspgju!boe!Mptt!Bddpvou :11 431
)c*!Usbef!Qbzbcmft!Ð!Dsfejupst 611 321
UPUBM 3:-511 5-641
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! )j*! !Ubohjcmf!Bttfut!;
! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoht 7-111 Ð
! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 26-611 Ð
! ! ! ! ! ! ! ! Npups!Wfijdmft Ð 511
! ! ! ! ! ! ! ! Gvsojuvsf Ð 361
! ! )jj*!!Joubohjcmf!Bttfut!;
! ! ! ! ! ! ! ! Hppexjmm Ð 811
! ! ! ! ! ! ! ! Qbufout 3-111 Ð
)b*!Dvssfou!Jowftunfout 2-261 Ð
)c*!Jowfoupsjft 4-611 3-4:1
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 911 731
)e*!Dbti!boe!Dbti!Frvjwbmfout1!Ð!Dbti!bu!Cbol 561 281
UPUBM 3:-511 5-641
Notes to Accounts :
)2*!Tibsf!Dbqjubm
Qbsujdvmbst !)Ô111* !)Ô111*
Jttvfe-!vctdsjcfe!boe!Qbje.vq!Dbqjubm!;
26-11-111!Frvjuz!Tibsft!pg!!21!fbdi 26-111 Ð
\61-111!Qsfgfsfodf!Tibsft!pg!!211!fbdi 6-111 Ð
5-11-111!Frvjuz!Tibsft!pg!!21!fbdi Ð! 5-111
31-111 5-111
B!ofx!dpnqboz-!D!Mue/-!xbt!gpsnfe!up!bdrvjsf!uif!bttfut!boe!mjbcjmjujft!pg!B!Mue!boe!C!Mue/!Uif!ufsnt!pg!bdrvjtjujpo
pg!cvtjoftt!xfsf!bt!voefs!;
)2* D!Mue!up!ibwf!bo!bvuipsjtfe!dbqjubm!pg!!4-61-11-111!ejwjefe!joup!61-111-!24&!qsfgfsfodf!tibsft!pg!!211!fbdi
boe!41-11-111!frvjuz!tibsft!pg!!21!fbdi/
)3* Cvtjoftt!pg!B!Mue!wbmvfe!bu!!4-11-11-111<!tfuumfnfou!cfjoh!!71-11-111!dbti!boe!cbmbodf!cz!jttvf!pg!gvmmz.qbje
frvjuz!tibsft!bu!!23/
)4* Cvtjoftt!pg!C!Mue!wbmvfe!bu!!59-11-111-!up!cf!tbujtgjfe!cz!jttvf!pg!gvmmz.qbje!frvjuz!tibsft!bu!!23/
)5* Qsfgfsfodf!tibsft!pg!B!Mue!xfsf!sfeffnfe/
)6* D!Mue!nbef!b!qvcmjd!jttvf!pg!41-111!qsfgfsfodf!tibsft!bu!qbs!boe!4-11-111!frvjuz!tibsft!bu!!23/!Uif!jttvf!xbt
voefsxsjuufo!bu!b!dpnnjttjpo!pg!!2-76-111!boe!xbt!gvmmz!tvctdsjcfe/!Bmm!pcmjhbujpot!xfsf!nfu/
)7* E-!xip!nppufe!uif!tdifnf-!xbt!bmmpuufe!51-111!frvjuz!tibsft!)gvmmz.qbje*!bu!!23!jo!dpotjefsbujpo!pg!ijt!tfswjdft/
Nblf!kpvsobm!fousjft!jo!uif!cpplt!pg!B!Mue!boe!C!Mue!up!dmptf!uifjs!cpplt!pg!bddpvou!boe!qsfqbsf!uif!Cbmbodf!Tiffu!pg
D!Mue/
Solution In the books of A Ltd.

Journal Dr. Cr.
Ebuf Qbsujdvmbst M/G/ !)Ô111* !)Ô111*
3129 Sfbmjtbujpo!B0d Es/ 3-:5-11
Nbsdi!42 Up!Qbufout!B0d 31-11
Up!Mboe!boe!Cvjmejoh!B0d 71-11
Up!Jowftunfout!B0d 22-61
Up!Efcupst!B0d 9-11
Up!Cbol!B0d 5-61
bnbmhbnbujpo*
)Cfjoh!uif!usbotgfs!pg!dsfejupst!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
D!Mue!B0d Es/ 4-11-11
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!D!Mue*
Sfbmjtbujpo!B0d!)Opuf!2* Es/ 22-11
Up!Frvjuz!Tibsfipmefst!B0d 22-11
)Cfjoh!uif!qspgju!po!sfbmjtbujpo!usbotgfssfe!up!Frvjuz!Tibsfipmefst!Bddpvou*
Frvjuz!Tibsft!jo!D!Mue!B0d Es/ 3-51-11
Cbol!B0d Es/ 71-11
Up!D!Mue!B0d 4-11-11
)Cfjoh!uif!sfdfjqu!pg!qvsdibtf!dpotjefsbujpo*
Qsfgfsfodf!Tibsf!Dbqjubm!B0d Es/ 61-11
Up!Qsfgfsfodf!Tibsfipmefst!B0d 61-11
)Cfjoh!uif!qsfgfsfodf!tibsf!dbqjubm!usbotgfssfe!up!Qsfgfsfodf!Tibsfipmefst!Bddpvou*
Qsfgfsfodf!Tibsfipmefst!B0d Es/ 61-11
Up!Cbol!B0d 61-11
)Cfjoh!uif!qsfgfsfodf!tibsfipmefst!qbje.pgg*
Qspgju!boe!Mptt!B0d Es/ :-11
Up!Frvjuz!Tibsfipmefst!B0d 3-4:-11
)Cfjoh!uif!usbotgfs!pg!frvjuz!tibsf!dbqjubm-!hfofsbm!sftfswf-!boe!Qspgju!boe!Mptt!Bddpvou!up
Frvjuz!Tibsfipmefst!Bddpvou*
Frvjuz!Tibsfipmefst!B0d!)!2-211!,!34-:11* Es/ 3-61-11
Up!Frvjuz!Tibsft!jo!D!Mue!B0d 3-51-11
Up!Cbol!B0d!)!7-111!Ï!6-111* 21-11
)Cfjoh!uif!gjobm!qbznfou!up!frvjuz!tibsfipmefst*

Journal Dr. Cr.
Ebuf Qbsujdvmbst M/G/ !)Ô111* !!)Ô111*
3129 Sfbmjtbujpo!B0d Es/ 56-41
Nbsdi!42 Up!Hppexjmm!B0d 8-11
Up!Npups!Wfijdmft!B0d 5-11
Up!Gvsojuvsf!B0d 3-61
Up!Jowfoupsjft!B0d 34-:1
Up!Efcupst!B0d 7-31
Up!Cbol!B0d 2-81
bnbmhbnbujpo*

)Cfjoh!uif!usbotgfs!pg!dsfejupst!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
D!Mue!B0d Es/ 59-11
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!D!Mue*
Frvjuz!Tibsft!jo!D!Mue!B0d Es/ 59-11
Up!D!Mue!B0d 59-11
)Cfjoh!uif!sfdfjqu!pg!qvsdibtf!dpotjefsbujpo*
Frvjuz!Tibsf!Dbqjubm!B0d Es/ 51-11
Qspgju!boe!Mptt!B0d 4-31
)Cfjoh!uif!usbotgfs!pg!frvjuz!tibsf!dbqjubm!boe-!qspgju!boe!mptt!bddpvou!up!Frvjuz!Tibsfipmefst
Bddpvou*
Frvjuz!Tibsfipmefst!B0d Es/ 59-11
Up!Tibsft!jo!D!Mue!B0d 59-11
)Cfjoh!uif!gjobm!qbznfou!up!frvjuz!tibsfipmefst*
C Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )!Ô111*
)2* )3* )4*
UPUBM 4-6:-56
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)jj*!!Joubohjcmf!Bttfut )6* 53-91
)jjj*!Dbqjubm!Xpsl.jo.qsphsftt Ð
)jw*!Joubohjcmf!Bttfut!voefs!Efwfmpqnfou Ð
)c*!Opo.dvssfou!Jowftunfout )7* 22-61
)b*!Jowfoupsjft )8* 69-:1
)c*!Usbef!Sfdfjwbcmft )9* 25-31
)d*!Dbti!boe!Dbti!Frvjwbmfout ):* 21-66
UPUBM 4-6:-56
Notes to Accounts :
Qbsujdvmbst !Ô111 Qbsujdvmbst !Ô111
Bvuipsjtfe!Dbqjubm!; Dsfejupst 8-21
41-11-111!Frvjuz!Tibsft!pg!!21!fbdi 4-11-11 )5*!Gjyfe!Bttfut
61-111-!24&!Qsfgfsfodf!Tibsft!pg!!211!fbdi 61-11 Ubohjcmf!Bttfut!;
4-61-11 Mboe!boe!Cvjmejoh 71-11
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Qmbou!boe!Nbdijofsz 2-66-11
38-51-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 3-85-11 Gvsojuvsf 3-61
41-111-!24&!Qsfgfsfodf!Tibsft!pg!!211!fbdi 41-11 Npups!Wfijdmft 5-11
)Pg!uif!bcpwf!tibsft!35-51-111!frvjuz!tibsft!ibwf!cffo 3-32-61
jttvfe!gps!dpotjefsbujpo!puifs!uibo!dbti*
4-15-11
)3*!Sftfswf!boe!Tvsqmvt )6*!Joubohjcmf!Bttfut
Tfdvsjujft!Qsfnjvn 65-91 Hppexjmm!)X/O/3* 33-91
Voefsxsjujoh!Dpnnjttjpo )2-76* Qbufout 31-11
Qsfmjnjobsz!Fyqfotft )5-91* 53-91
59-46 )7*!Dvssfou!Jowftunfout 22-61
)8*!Jowfoupsjft 69-:1
)9*!Usbef!Sfdfjwbcmft
Efcupst 25-31
):*!Dbti!boe!Dbti!Frvjwbmfout
Dbti!bu!Cbol!)X/O/!4* 21-611
Uvupsjbm!Opuf!;!Ju!jt!bo!bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf!cfdbvtf!uif!qvsdibtf!dpotjefsbujpo!ibt!opu!cffo!tbujtgjfe!gvmmz!cz
jttvf!pg!tibsft/!Uifsfgpsf-!Hfofsbm!Sftfswf!boe!Qspgju!boe!Mptt!Bddpvou!cbmbodf!pg!usbotgfsps!dpnqbojft!xjmm!opu!cf!jodpsqpsbufe/
Ju!tipvme!cf!opufe!uibu!uif!tibsft!ibwf!cffo!jttvfe!cz!D!Mue!)usbotgfsff!dpnqboz*!bu!b!qsfnjvn!up!uif
mjrvjebups!pg!B!Mue!boe!C!Mue/
Cfdbvtf! pg! uijt-! hppexjmm! bt! xfmm! bt! tfdvsjujft! qsfnjvn! xjmm! bqqfbs! jo! uif! Cbmbodf! Tiffu! pg! D! Mue
tjnvmubofpvtmz!boe!uiftf!dboopu!cf!bekvtufe!cfdbvtf!pg!mfhbm!sftusjdujpot/
Ju!xpvme!cf!b!cfuufs!bddpvoujoh!qsbdujdf!up!jttvf!tibsft!bu!qbs/!Jg!uijt!jt!epof-!fyjtufodf!pg!hppexjmm!boe
tfdvsjujft!qsfnjvn!dbo!cf!bwpjefe/
Working Notes :
Ebuf Qbsujdvmbst B!Mue/ C!Mue/ Ebuf Qbsujdvmbst B!Mue/ C!Mue/
!)Ô111* !)Ô111* !)Ô111* !)Ô111*
Up!Hppexjmm!B0d Ð 8-11 Cz!Dsfejupst!B0d 6-11 3-21
Up!Qbufout!B0d 31-11 Ð Cz!D!Mue/!B0d 4-11-11 59-11
Up!Mboe!boe!Cvjmejoh!B0d 71-11 Ð
Up!Qmbou!boe!Nbdijofsz!B0d 2-66-11 Ð
Up!Npups!Wfijdmft!B0d Ð 5-11
Up!Gvsojuvsf!B0d Ð 3-61
Up!Jowftunfout!B0d 22-61 Ð
Up!Jowfoupsjft!B0d 46-11 34-:1
Up!Efcupst!B0d 9-11 7-31
Up!Dbti!bu!Cbol!B0d 5-61 2-81
Up!Frvjuz!Tibsfipmefst!B0d 2-2-11 5-91
4-16-11 61-21 4-16-11 61-21
(2) Explanatory Journal (without narration) Dr. Cr.

Ebuf Qbsujdvmbst M/G/ !!)Ô111* !!)Ô111*
3129 Hppexjmm!B0d!)Cbmbodjoh!gjhvsf* Es/ 33-91
Nbs/!42 Qbufout!B0d Es/ 31-11
Mboe!boe!Cvjmejoh!B0d Es/ 71-11
Npups!Wfijdmft!B0d Es/ 5-11
Gvsojuvsf!B0d Es/ 3-61
Jowftunfout!B0d Es/ 22-61
Jowfoupsjft!B0d!)!46-11!,!34-:1* Es/ 69-:1
Efcupst!B0d!)!911!,!7-31* Es/ 25-31
Cbol!B0d!)!5-61!,!2-81* Es/ 7-31
Up!Mjrvjebups!pg!B!Mue/!B0d 4-11-11
Up!Mjrvjebups!pg!C!Mue/!B0d 59-11
Mjrvjebups!pg!B!Mue/!B0d Es/ 4-11-11
Mjrvjebups!pg!C!Mue!B0d Es/ 59-11
Up!Tfdvsjujft!Qsfnjvn!B0d 59-11
Up!Cbol!B0d 71-11
Cbol!B0d Es/ 77-11
Up!Tfdvsjujft!Qsfnjvn!B0d 7-11
Up!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 41-11
Voefsxsjujoh!Dpnnjttjpo!B0d Es/ 2-76
Up!Cbol!B0d 2-76
Qsfmjnjobsz!Fyqfotft!B0d Es/ 5-91
Up!Tfdvsjujft!Qsfnjvn!B0d 91
)4*!Dbti!bu!Cbol!;!!5-61-111!,!!2-81-111!,!!77-11-111!Ï!!71-11-111!Ï!!2-76-111!>!!21-66-111/
Illustration 21
Hjwfo!cfmpx!bsf!uif!Cbmbodf!Tiffut!pg!uxp!dpnqbojft!bt!po!42tu!Nbsdi-!3129!;
Balance Sheet of M Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Sftfswft!boe!Tvsqmvt!Ð Hfofsbm!Sftfswf 9-11-111
Qspgju!boe!Mptt!Bddpvou :1-111
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 61-111
UPUBM 3:-51-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! )j*! !Ubohjcmf!Bttfut!;
! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoht 7-11-111
! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 26-61-111
! ! ! ! )jj*!!Joubohjcmf!Bttfut!Ð!Qbufou!Sjhiut 3-11-111
)d*!Usbef!Sfdfjwbcmft!Ð!Tvoesz!Efcupst 91-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!jo!Iboe 2-71-111
UPUBM 3:-51-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm
Qbsujdvmbst
Jttvfe-!Tvctdsjcfe!boe!Qbje.vq!Dbqjubm!;
2-61-111!Frvjuz!Tibsft!pg!!21!fbdi 26-11-111
61-111-!9&!Dvnvmbujwf!Qsfgfsfodf!Tibsft!pg!!21!fbdi 6-11-111!
31-11-111
Balance Sheet of K Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Sftfswft!boe!Tvsqmvt!Ð Qspgju!boe!Mptt!Bddpvou 43-111
)c*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 32-111
UPUBM 5-64-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! )j*! !Ubohjcmf!Bttfut!;
! ! ! ! ! ! ! ! Npups!Wfijdmft 51-111
! ! ! ! ! ! ! ! Gvsojuvsf 36-111
! ! ! ! )jj*!!Joubohjcmf!Bttfut!Ð!Hppexjmm 81-111
)c*!Jowfoupsjft 3-4:-111
)d*!Usbef!Sfdfjwbcmft!Ð!Tvoesz!Efcupst 73-111
)e*!Dbti!boe!Dbti!Frvjwbmfout 28-111
UPUBM 5-64-111
Ju!ibt!cffo!bhsffe!uibu!cpui!uiftf!dpnqbojft!tipvme!cf!xpvoe!vq!boe!b!ofx!dpnqboz!K!L!Mue!tipvme!cf!gpsnfe!up
bdrvjsf!uif!bttfut!pg!cpui!uif!dpnqbojft!po!uif!gpmmpxjoh!ufsnt!;
)j* K!L!Mue!jt!up!ibwf!bo!bvuipsjtfe!dbqjubm!pg!!41-11-111!ejwjefe!joup!61-111-!6&!dvnvmbujwf!qsfgfsfodf!tibsft!pg
!21!fbdi!boe!3-61-111!frvjuz!tibsft!pg!!21!fbdi/
)jj* K!L!Mue!jt!up!qvsdibtf!uif!xipmf!pg!uif!bttfut!pg!N!Mue!)fydfqu!dbti!boe!cbol!cbmbodft*!gps!!38-:6-111!up!cf
tfuumfe!bt!up!!6-56-111!jo!dbti!boe!bt!up!uif!cbmbodf!cz!jttvf!pg!2-91-111!frvjuz!tibsft-!dsfejufe!bt!gvmmz!qbje-!up
cf!usfbufe!bt!wbmvfe!bu!!23/61!fbdi/
)jjj* K!L!Mue!jt!up!qvsdibtf!uif!xipmf!pg!uif!bttfut!pg!L!Mue!)fydfqu!dbti!boe!cbol!cbmbodft*!gps!!4-92-111!up!cf
tfuumfe!bt!up!!7-111!jo!dbti!boe!bt!up!uif!cbmbodf!cz!jttvf!pg!41-111!frvjuz!tibsft-!dsfejufe!bt!gvmmz!qbje-!up!cf
usfbufe!bt!wbmvfe!bu!!23/61!fbdi/
)jw* K!L!Mue!jt!up!nblf!b!qvcmjd!jttvf!pg!61-111-!6&!dvnvmbujwf!qsfgfsfodf!tibsft!bu!qbs!boe!41-111!frvjuz!tibsft!bu
uif!jttvf!qsjdf!pg!!23/61!qfs!tibsf-!bmm!qbzbcmf!jo!gvmm!po!bqqmjdbujpo/
)w* N!Mue!boe!L!Mue!cpui!bsf!up!cf!xpvoe!vq-!uif!uxp!mjrvjebupst!ejtusjcvujoh!uif!tibsft!jo!K!L!Mue!jo!ljoe!bnpoh
uif!frvjuz!tibsfipmefst!pg!uif!sftqfdujwf!dpnqbojft/
)wj* Uif!mjrvjebups!pg!N!Mue!jt!up!qbz!uif!qsfgfsfodf!tibsfipmefst!!!21!jo!dbti!gps!fwfsz!!tibsf!ifme!jo!gvmm!tbujtgbdujpo
pg!uifjs!dmbjnt/
Ju!jt!ftujnbufe!uibu!uif!dptut!pg!mjrvjebujpo!)jodmvejoh!uif!mjrvjebupstÔ!sfnvofsbujpo*!xjmm!cf!!6-111!jo!dbtf!pg!N!Mue
boe!!3-111!jo!uif!dbtf!pg!L!Mue!boe!uibu!uif!qsfmjnjobsz!fyqfotft!pg!K!L!Mue!xjmm!bnpvou!up!!29-111!fydmvtjwf!pg!uif
voefsxsjujoh!dpnnjttjpo!pg!!34-861!qbzbcmf!po!uif!qvcmjd!jttvf/!Uif!tdifnf!ibt!cffo!tbodujpofe!boe!dbssjfe!uispvhi
jo!jut!foujsfuz/
)b* tfu!pvu!uif!dmptjoh!fousjft!jo!uif!cpplt!pg!N!Mue!jo!uif!gpsn!pg!kpvsobm!fousjft!uphfuifs!xjui!uif!dmptjoh!dbti!cppl
fousjft<!boe
)c* esbx!vq!uif!jojujbm!Cbmbodf!Tiffu!pg!K!L!Mue!po!uif!cbtjt!uibu!bmm!bttfut!puifs!uibo!hppexjmm!bsf!ublfo!pwfs!bu!uif
cppl!wbmvf/ \D/T/!)Joufs*!Ð!Bebqufe^
Solution
(a) Calculation of Purchase Consideration
Qbsujdvmbst
Gps!Frvjuz!Tibsfipmefst!;
Dbti 6-56-111
Frvjuz!Tibsft!Ð!2-91-111!y!!23/61 33-61-111
Qvsdibtf!dpotjefsbujpo 38-:6-111
In the books of M Ltd.
Journal Dr. Cr.
Nbs/!42 Up!Qbufou!Sjhiut!B0d 3-11-111
Up!Mboe!boe!Cvjmejoht!B0d 7-11-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!bttfut!up!Sfbmjtbujpo!Bddpvou!bt!qfs!tdifnf!pg!bnbmhbnbujpo*
K!L!Mue/!B0d Es/ 38-:6-111
Up!Sfbmjtbujpo!B0d 38-:6-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!K!L!Mue/*
Frvjuz!Tibsft!jo!K!L!Mue/!B0d Es/ 33-61-111
Up!K!L!Mue/!B0d 33-61-111
)Cfjoh!uif!sfdfjqu!pg!frvjuz!tibsft!bt!qbsu!pg!uif!qvsdibtf!dpotjefsbujpo*
Qsfgfsfodf!Tibsft!Dbqjubm!B0d Es/ 6-11-111
Up!Qsfgfsfodf!Tibsfipmefst!B0d 6-11-111
)Cfjoh!qsfgfsfodf!tibsf!dbqjubm!usbotgfssfe!up!uif!Qsfgfsfodf!Tibsfipmefst!Bddpvou*
Qspgju!boe!Mptt!B0d Es/ :1-111
Up!Frvjuz!Tibsfipmefst!B0d 34-:1-111
)Cfjoh!uif!usbotgfs!pg!frvjuz!tibsf!dbqjubm-!hfofsbm!sftfswf!boe-!qspgju!boe!mptt!cbmbodf!up!Frvjuz
Frvjuz!Tibsfipmefst!B0d Es/ 33-61-111
Up!Frvjuz!Tibsft!jo!K!L!Mue/!B0d 33-61-111
)Cfjoh!uif!frvjuz!tibsft!jo!K!L!Mue/!usbotgfssfe!up!Frvjuz!Tibsfipmefst!Bddpvou*
Dr. Cash Book Cr.

3129 Up!Cbmbodf!c0e 2-71-111 3129 Cz!Tvoesz!Dsfejupst!B0d 61-111
Nbs/!42 Up!K!L!Mue/!B0d 6-56-111 Nbs/!42 Cz!Qsfgfsfodf!Tibsfipmefst!B0d 6-11-111
Cz!Sfbmjtbujpo!B0d!)Mjrvjebujpo!fyqfotft* 6-111
Cz!Frvjuz!Tibsfipmefst!B0d 2-61-111
8-16-111 8-16-111
JK Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm )2* 3:-11-111
UPUBM 45-69-361
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)jj*!!Joubohjcmf!Bttfut )5* 3-41-111
)c*!Jowfoupsjft )6* 6-9:-111
UPUBM 45-69-361
Notes to Accounts :
3-61-111!Frvjuz!Tibsft!pg!!21!fbdi 36-11-111 Mboe!boe!Cvjmejoh 7-11-111
61-111-!6&!!Qsfgfsfodf!Tibsft!pg!!21!fbdi 6-11-111 Qmbou 26-61-111
41-11-111 Gvsojuvsft 36-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; Npups!Wfijdmft 51-111
3-51-111!Frvjuz!Tibsft!pg!!21!fbdi 35-11-111 33-26-111
61-111-!6&!!Qsfgfsfodf!Tibsft!pg!!21!fbdi 6-11-111 )5*!Joubohjcmf!Bttfut
)Pg!uif!bcpwf!tibsft!3-21-111!frvjuz!tibsft!pg!!21!fbdi! Hppexjmm 41-111
gvmmz!qbje!ibwf!cffo!jttvfe!gps!dpotjefsbujpo!puifs! ! Qbufou!Sjhiut 3-11-111
uibo!dbti* 3-41-111
3:-11-111 )6*!Jowfoupsjft
)3*!Sftfswf!boe!Tvsqmvt Jowfoupsjft 6-9:-111
Tfdvsjujft!Qsfnjvn 7-11-111 )7*!Usbef!Sfdfjwbcmft
Qsfmjnjobsz!Fyqfotft!)Opuf!3* )29-111* Tvoesz!Efcupst 2-53-111
Voefsxsjujoh!Dpnnjttjpo!)Opuf!3* )34-861* )8*!Dbti!boe!Dbti!Frvjwbmfou
6-69-361 Dbti!bu!Cbol!)X/O/4* 3-93-361
Working Note :
Up!Tvoesz!Bttfut!B0d 38-91-111 Cz!K!L!Mue/!B0d 38-:6-111
Up!Dbti!boe!Cbol!B0d!)Mjrvjebujpo!Fyqfotft* 6-111
Up!Frvjuz!Tibsfipmefst!B0d!)Qspgju* 21-111
38-:6-111 38-:6-111
Uvupsjbm!Opuf!;!
)2* Op!kpvsobm!fousz!jt!sfrvjsfe!gps!qbznfou!up!qsfgfsfodf!tibsfipmefst!boe!dsfejupst/!Bmm!uiftf!fousjft!bsf!up!cf!nbef!jo!uif!Dbti
Cppl!ejsfdumz/
)3* Qsfmjnjobsz!Fyqfotft!boe!Voefsxsjujoh!Dpnnjttjpo!dbo!cf!bekvtufe!bhbjotu!Tfdvsjujft!Qsfnjvn/
(2) Calculation of Goodwill / Capital Reserve and their Adjustments
Qbsujdvmbst N!Mue/!)* L!Mue/!)*
Ofu!Bttfut!ublfo!pwfs! 38-91-111 5-47-111
Mftt;!Qvsdibtf!Dpotjefsbujpo 38-:6-111 4-92-111
Hppexjmm!0!Dbqjubm!Sftfswf )26-111* 66-111
Dr. Goodwill Account Cr.
Up!Mjrvjebups!pg!L!Mue/!B0d 81-111 Cz!Dbqjubm!Sftfswf!B0d 66-111
Up!Mjrvjebups!pg!N!Mue/!B0d 26-111 Cz!Cbmbodf!d0e 41-111
96-111 96-111
Dr. Capital Reserve Account Cr.
Up!Hppexjmm!B0d!)bekvtufe* 66-111 Cz!Mjrvjebupst!pg!L!Mue/!B0d 66-111
Dr. (3) Cash and Bank Account Cr.
Up!6&!Dvnvmbujwf!Qsfgfsfodf!Tibsf Cz!N!Mue/!B0d 6-56-111
! ! ! Bqqmjdbujpo!boe!Bmmpunfou!B0d 6-11-111 Cz!L!Mue/!B0d 7-111
Up!Frvjuz!Tibsf!Bqqmjdbujpo!boe Cz!Qsfmjnjobsz!Fyqfotft!B0d 29-111
! ! ! Bmmpunfou!B0d 4-86-111 Cz!Voefsxsjujoh!Dpnnjttjpo!B0d 34-861
Cz!Cbmbodf!c0e 3-93-361
9-86-111 9-86-111
(4) Number of Equity Shares Issued by J K Ltd.
Qbsujdvmbst Tibsft
)b*!Up!N!Mue/!)!38-:6-111!Ï!!6-56-111*!0!!23/61 2-91-111
)c*!Up!L!Mue/!)!4-92-111!Ï!!7-111*!0!!23/61 41-111
)d*!Up!Qvcmjd 41-111
3-51-111
Illustration 22
B!Mue!boe!C!Mue!xfsf!bnbmhbnbufe!po!boe!gspn!2tu!Bqsjm-!3129/!B!ofx!dpnqboz!D!Mue!xbt!gpsnfe!up!ublf!pwfs!uif
cvtjoftt!pg!uif!fyjtujoh!dpnqbojft/!Uif!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bt!po!42tu!Nbsdi-!3129!bsf!hjwfo!cfmpx!;
Opuf B!Mue/ C!Mue/
Qbsujdvmbst Op/ )!!Mblit* )!!Mblit*
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm )2* 2-211 :61
)c*!Sftfswft!boe!Tvsqmvt )3* 531 441
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!21&!Efcfouvsft 71 41
)c*!Usbef!Qbzbcmft!;
! ! ! Tvoesz!Dsfejupst 381 231
! ! ! ! ! ! Cjmmt!Qbzbcmf 261 81
UPUBM 3-111 2-611
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! Mboe!boe!Cvjmejoh 661 511
! ! ! ! ! ! Qmbou!boe!Nbdijofsz 461 361
)c*!Opo.dvssfou!jowftunfout 261 61
)c*!Jowfoupsjft 461 361
)d*!Usbef!Sfdfjwbcmft!Ð! Tvoesz!Efcupst 361 411
Cjmmt!Sfdfjwbocmft 61 61
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!boe!Cbol 411 311
UPUBM 3-111 2-611
Notes to Accounts :
)2*!Tibsf!Dbqjubm
)!!Mblit* )!!Mblit*
Frvjuz!Tibsft!pg!!211!fbdi 911 861
23&!Qsfgfsfodf!Tibsft!pg!!211!fbdi 411 311!
2-211 :61
Sfwbmvbujpo!Sftfswf 261 211
Hfofsbm!Sftfswf 281 261
Jowftunfou!Bmmpxbodf!Sftfswf 61 61
Qspgju!boe!Mptt 61 41
531 441
Beejujpobm!jogpsnbujpo!;
)2* 21&!Efcfouvsfipmefst!pg!B!Mue!boe!C!Mue!bsf!ejtdibshfe!cz!D!Mue!jttvjoh!tvdi!ovncfs!pg!jut!26&!Efcfouvsft
pg!!211!fbdi!tp!bt!up!nbjoubjo!uif!tbnf!bnpvou!pg!joufsftu/
)3* Qsfgfsfodf!tibsfipmefst!pg!uif!uxp!dpnqbojft!bsf!jttvfe!frvjwbmfou!ovncfs!pg!26&!qsfgfsfodf!tibsft!pg!D!Mue
bu!b!qsjdf!pg!!261!qfs!tibsf!)gbdf!wbmvf!!211*/
)4* D!Mue!xjmm!jttvf!6!frvjuz!tibsft!gps!fbdi!frvjuz!tibsf!pg!B!Mue!boe!5!frvjuz!tibsft!gps!fbdi!frvjuz!tibsf!pg!C!Mue/
Uif!tibsft!bsf!up!cf!jttvfe!A!!41!fbdi-!ibwjoh!b!gbdf!wbmvf!pg!!21!qfs!tibsf/
)5* Jowftunfou!bmmpxbodf!sftfswf!jt!up!cf!nbjoubjofe!gps!5!npsf!zfbst/
Qsfqbsf!uif!Cbmbodf!Tiffu!pg!D!Mue!bt!po!2tu!Bqsjm-!3129!bgufs!uif!bnbmhbnbujpo!ibt!cffo!dbssjfe!pvu!po!uif!cbtjt!pg
bnbmhbnbujpo!jo!uif!obuvsf!pg!qvsdibtf/
Solution C Ltd
Balance Sheet as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )!!jo!Mblit*
)2* )3* )4*
)b*!Tibsf!Dbqjubm )2* 2-311
)b*!Mpoh.ufsn!Cpsspxjoht )4* 71
)c*!Usbef!Qbzbcmft )5* 721
)d*!Puifs!Dvssfou!Mjbcjmjujft Ð
)e*!Tipsu.ufsn!Qspwjtjpot Ð
UPUBM 4-631
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)j*! !Ubohjcmf!Bttfut )6* 2-661
! ! ! )jj*!!Joubohjcmf!Bttfut )7* 31
)c*!Opo.dvssfou!Jowftunfout 311
)c*!Jowfoupsjft )8* 711
)d*!Usbef!Sfdfjwbcmft )9* 761
)e*!Dbti!boe!Dbti!Frvjwbmfout ):* 611
UPUBM 4-631
Notes to Accounts :
Qbsujdvmbst !jo!Mbdt Qbsujdvmbst !jo!Mbdt
///!Frvjuz!Tibsft!pg!!///!fbdi +++ Mboe!boe!Cvjmejoh :61
///!Qsfgfsfodf!Tibsft!pg!!///!fbdi +++ Qmbou!boe!Nbdijofsz 711
+++ 2-611
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )7*!Joubohjcmf!Bttfut!
81-11-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 811 Hppexjmm!)221!Ï!:1* 31
6-11-111-!26&!Qsfgfsfodf!Tibsft!pg!!211!fbdi 611 )8*!Jowfoupsjft!)461!,!361* 711
2-311 )9*!Usbef!Sfdfjwbcmft
)3*!Sftfswf!boe!Tvsqmvt Tvoesz!Efcupst!)361!,!411* 661
Tfdvsjujft!Qsfnjvn!)Opuf!6* 2-761 Cjmmt!Sfdfjwbcmf!)61!,!61* 211
Jowftunfou!Bmmpxbodf!Sftfswf!)Opuf!5* ! ! !211 761
Mftt;!Bnbmhbnbujpo!Bekvtunfou!Bddpvou!)Opuf!5*! ! 211 Ð
2-761 ):*!Dbti!boe!Dbti!Frvjwbmfout
)4*!Mpoh.ufsn!Cpsspxjoht Dbti!boe!Cbol!)411!,!311* 611
Tfdvsfe!Mpbot!;
26&!Efcfouvsft 71
)5*!Usbef!Qbzbcmft
Tvoesz!Dsfejupst! 4:1
Cjmmt!Qbzbcmf 331
721
Working Notes : (1) Calculation of Purchase Consideration

Qbsujdvmbst B!Mue C!Mue

Qsfgfsfodf!tibsfipmefst!;
B!Mue!Ð!!4-11-11-111!0!!211!y!!261 561
C!Mue!Ð!!3-11-11-111!0!!211!y!!261 411
Frvjuz!tibsfipmefst!;
B!Mue!Ð!!9-11-11-111!0!!211!y!6!y!!41 2-311
C!Mue!Ð!!8-61-11-111!0!!211!y!5!y!!41 :11
Qvsdibtf!Dpotjefsbujpo 2-761 2-311
(2) Calculation of Goodwill / Capital Reserve
Qbsujdvmbst B!Mue C!Mue

Bttfut!ublfo!pwfs!;
Mboe!boe!Cvjmejoh 661 511
Qmbou!boe!Nbdijofsz 461 361
Jowftunfout 261 61
Jowfoupsjft 461 361
Tvoesz!Efcupst 361 411
Cjmmt!Sfdfjwbcmf 61 61
Dbti!boe!Cbol 411 311
3-111 2-611
Mftt;!Mjbcjmjujft!ublfo!pwfs!;
Efcfouvsft!)Opuf!4* 51 31
Tvoesz!Dsfejupst 381 231
Cjmmt!Qbzbcmf 261 571 81 321
Ofu!bttfut!ublfo!pwfs 2-651 2-3:1
Mftt;!Qvsdibtf!Dpotjefsbujpo!)Opuf!2* 2-761 2-311
Hppexjmm!)Ð*!0!Dbqjubm!Sftfswf )Ï*!221 :1
)4* Joufsftu!qbje!po!21&!Efcfouvsft!pg!B!Mue!>!!71-11-111!!21!0!211!>!!7-11-111/!Up!hfu!uif!tbnf!bnpvou!pg!joufsftu!gspn!26&
Efcfouvsft!!uif!!gbdf!!wbmvf!!pg!!Efcfouvsft!!up!!cf!jttvfe!cz!D!Mue!>!!7-11-111!0!26!!!211!>!!51-11-111/
Joufsftu!qbje!po!21&!Efcfouvsft!pg!C!Mue!>!!41-11-111!!21!0!211!>!!4-11-111/!Up!hfu!uif!tbnf!bnpvou!!pg!!joufsftu!!gspn!!26&
Efcfouvsft!!uif!!gbdf!!wbmvf!pg!Efcfouvsft!up!cf!jttvfe!cz!D!Mue!>!!4-11-111!0!26!!211!>!!31-11-111/
)5* Jowftunfou!Bmmpxbodf!Sftfswf!jt!up!cf!nbjoubjofe!gps!5!npsf!zfbst/!Bt!qfs!uif!sfrvjsfnfou!pg!BTÐ25-!ju!jt!up!cf!dbssjfe!gpsxbse
cz!qbttjoh!uif!gpmmpxjoh!fousz!;
! ! ! ! ! ! ! ! ! ! ! Bnbmhbnbujpo!Bekvtunfou!Bddpvou! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Es/
! ! ! ! ! ! ! ! ! ! ! ! ! Up!Jowftunfou!Bmmpxbodf!Sftfswf!Bddpvou
(5) Calculation of Securities Premium
Qbsujdvmbst
Gps!B!Mue!;!)4-11-111!Qsfgfsfodf!Tibsft!y!!61* 2-61-11-111
! ! ! )9-11-111!Frvjuz!Tibsft!y!6!y!!31* 9-11-11-111
:-61-11-111
Gps!C!Mue!;!)3-11-111!Qsfgfsfodf!Tibsft!y!!61* 2-11-11-111
! ! ! )8-61-111!Frvjuz!Tibsft!y!5!y!!31* 7-11-11-111
8-11-11-111
Upubm!Qsfnjvn!>!!:61!mblit!,!811!mblit!>!!2-761!mblit/
Inter Company Investments
Bnbmhbnbujpo!ublft!qmbdf!cfuxffo!lopxo!dpnqbojft/!Ju!nbz!cf!opufe!uibu!pof!dpnqboz!nbz!ipme!tpnf!tibsft
pg!bopuifs!dpnqboz/!Bu!uif!ujnf!pg!bnbmhbnbujpo!tpnf!qspcmfnt!nbz!bsjtf!bddpsejoh!up!tjuvbujpo/
Tjuvbujpo!2!;!Xifo!pof!pg!uif!usbotgfsps!dpnqboz!ipmejoh!tpnf!tibsft!pg!bopuifs!usbotgfsps!dpnqboz/
Tjuvbujpo!3!;!Xifo!uif!usbotgfsff!dpnqboz!ipmejoh!tpnf!tibsft!pg!usbotgfsps!dpnqboz/
Tjuvbujpo!4!;!Xifo!uif!usbotgfsps!dpnqboz!ipmejoh!tpnf!tibsft!pg!usbotgfsff!dpnqboz/
Xf!xjmm!ejtdvtt!uif!bcpwf!tjuvbujpot!pof!cz!pof/
Situation 1 : One of the transferor company holding shares of other transferor company
Jo!uijt!dbtf-!xf!tipvme!gjstu!dmptf!uif!cpplt!pg!bddpvou!pg!uibu!usbotgfsps!dpnqboz!xiptf!tibsft!bsf!ifme!cz
bopuifs!usbotgfsps!dpnqboz/!Gps!fybnqmf-!Y!Mue!boe!Z!Mue!efdjef!up!bnbmhbnbuf!joup!YZ!Mue/!Y!Mue!ipmet
311!frvjuz!tibsft!pg!!21!fbdi!gvmmz!qbje!pg!Z!Mue/
Bu!uif!ujnf!pg!bnbmhbnbujpo-!uif!cpplt!pg!bddpvou!pg!Z!Mue!bsf!up!cf!dmptfe!gjstu!jo!uif!vtvbm!nboofs/!Uif
mjrvjebups!pg!Z!Mue!xjmm!qbz.pgg!jut!tibsfipmefst!)jodmvejoh!Y!Mue!gps!311!tibsft*!jo!uif!vtvbm!nboofs/
Ipxfwfs-!bu!uif!ujnf!pg!dmptjoh!uif!cpplt!pg!bddpvou!pg!Y!Mue/-!Jowftunfou!jo!Tibsft!pg!Z!Mue!Bddpvou!xjmm
opu!cf!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou/!
Ipxfwfs-!uijt!bddpvou!xjmm!cf!dmptfe!cz!qbttjoh!uif!gpmmpxjoh!fousz;
Tibsft!jo!YZ!Mue!Bddpvou Es/ \Tibsft!sfdfjwfe!gspn!mjrvjebups!pg!Z!Mue^
! ! ! Up!Jowftunfou!jo!Tibsft!pg!Z!Mue!Bddpvou
Boz!cbmbodf!pg!Jowftunfou!jo!Tibsft!pg!Z!Mue!Bddpvou!xjmm!cf!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou
cfjoh!qspgju0mptt!po!sfbmjtbujpo!pg!Jowftunfou!jo!Tibsft!pg!Z!Mue/
Illustration 23
Y!Mue/!boe!Z!Mue/!bsf!uxp!dpnqbojft!dbsszjoh!po!cvtjoftt!jo!uif!tbnf!mjof!pg!bdujwjuz/!Uifjs!Cbmbodf!Tiffut!bt!po!42/14/3129
bsf!hjwfo!cfmpx!;
Opuf Y!Mue/ Z!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 7-11-111 3-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Hfofsbm!Sftfswf 5-11-111 3-11-111
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!Tfdvsfe!Mpbot 7-11-111 2-11-111
)b*!Puifs!Dvssfou!Mjbcjmjujft 7-11-111 5-11-111
UPUBM 33-11-111 :-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! )j*!Ubohjcmf!bttfut!;
! ! ! ! ! ! ! Mboe!boe!Cvjmejoht 2-11-111 Ð
! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 8-11-111 4-11-111
)c*!Opo.dvssfou!jowftunfout 2-11-111 Ð
)c*!Jowfoupsjft :-11-111 5-11-111
)d*!Usbef!Sfdfjwbcmft!Ð!Efcupst 4-11-111 2-11-111
)e*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!bu!Cbol 2-11-111 2-11-111
UPUBM 33-11-111 :-11-111
Uif!uxp!dpnqbojft!efdjef!up!bnbmhbnbuf!joup!YZ!Mue/!Uif!gpmmpxjoh!gvsuifs!jogpsnbujpo!jt!hjwfo!;
)2* Y!Mue/!ipmet!9-111!tibsft!jo!Z!Mue/!A!!23/61!fbdi/
)3* Bmm!bttfut!boe!mjbcjmjujft!pg!uif!uxp!dpnqbojft-!fydfqu!jowftunfout!bsf!ublfo!pwfs!cz!YZ!Mue/
)4* Fbdi!tibsf!jo!Z!Mue/!jt!wbmvfe!A!!36!gps!uif!qvsqptf!pg!uif!bnbmhbnbujpo/
)5* Tibsfipmefst!jo!Y!Mue/!boe!Z!Mue/!bsf!qbje.pgg!cz!jttvjoh!up!uifn!tvggjdjfou!ovncfs!pg!Frvjuz!Tibsft!pg!!21
fbdi!jo!YZ!Mue/!bt!gvmmz!qbje.vq!bu!qbs/
)6* Fbdi!tibsf!jo!Y!Mue/!jt!wbmvfe!A!!26!gps!uif!qvsqptf!pg!uif!bnbmhbnbujpo/
Tipx!Kpvsobm!Fousjft!up!dmptf!uif!cpplt!pg!cpui!uif!dpnqbojft/
Solution Purchase Consideration
! ! Y!Mue/!Ð!71-111!tibsft!A!!26!fbdi!>!!:-11-111/
! ! Z!Mue/!Ð!31-111!tibsft!A!!36!fbdi!>!!6-11-111/
Jo!uijt!qspcmfn-!Y!Mue/!ipmejoh!51&!)9-111!tibsft!pvu!pg!31-111!tibsft*!pg!uif!tibsf!dbqjubm!pg!Z!Mue/!Bu!uif!ujnf!pg!mjrvjebujpo!pg!Z!Mue/-!Y!Mue/!xjmm!hfu
51&!pg!uif!bnpvou!qbzbcmf!up!Tvoesz!Tibsfipmefst!pg!Z!Mue/!Uifsfgpsf-!ju!jt!cfuufs!up!dmptf!uif!cpplt!pg!bddpvout!pg!Z!Mue/!gjstu/
Journal Dr. Cr.
3129 Sfbmjtbujpo!B0d Es/ :-11-111
Nbs/!42 Up!Qmbou!boe!Nbdijofsz!B0d 4-11-111
Up!Dbti!B0d 2-11-111
Puifs!Dvssfou!Mjbcjmjujft!B0d Es/ 5-11-111
Tfdvsfe!Mpbot!B0d Es/ 2-11-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!mjbcjmjujft!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!Tdi/!pg!bnbmhbnbujpo*
YZ!Mue/!B0d Es/ 6-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!YZ!Mue/!A!!36!qfs!tibsf!po!31-111!tibsft*
)Cfjoh!uif!usbotgfs!pg!tibsf!dbqjubm!boe!hfofsbm!sftfswf!up!Tvoesz!Tibsfipmefst!Bddpvou*
Sfbmjtbujpo!B0d Es/ 2-11-111
)Cfjoh!qspgju!po!sfbmjtbujpo!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
Up!YZ!Mue/!B0d 6-11-111
)Cfjoh!tibsft!sfdfjwfe!gspn!YZ!Mue/!bhbjotu!qvsdibtf!dpotjefsbujpo*
)Cfjoh!uif!ejtusjcvujpo!pg!tibsft!jo!YZ!Mue/!bnpoh!uif!fyjtujoh!tibsfipmefst*
Working Note :
Up!Qmbou!boe!Nbdijofsz!B0d 4-11-111 Cz!Puifs!Dvssfou!Mjbcjmjujft!B0d 5-11-111
Up!Jowfoupsjft!B0d 5-11-111 Cz!Tfdvsfe!Mpbot!B0d 2-11-111
Up!Efcupst!B0d 2-11-111 Cz!YZ!Mue/!B0d 6-11-111
Up!Dbti!B0d 2-11-111
21-11-111 21-11-111
In the books of X Ltd.

Journal Dr. Cr.
Nbs/!42 Up!Mboe!boe!Cvjmejoh!B0d 2-11-111
Up!Jowfoupsjft!B0d :-11-111
Up!Dbti!bu!Cbol!B0d 2--11-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!bttfut!up!Sfbmjtbujpo!Bddpvou!po!bnbmhbnbujpo!xjui!YZ!Mue/!bt
qfs!uif!Tdifnf!ebufe!////!*
Puifs!Dvssfou!Mjbcjmjujft!B0d Es/ 7-11-111
Tfdvsfe!Mpbot!B0d Es/ 7-11-111
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!mjbcjmjujft!up!Sfbmjtbujpo!Bddpvou!po!bnbmhbnbujpo!xjui!YZ!Mue/!bt
qfs!uif!Tdifnf!ebufe!////!*
YZ!Mue/!B0d Es/ :-11-111
Up!Sfbmjtbujpo!B0d :-11-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!YZ!Mue/!A!!26!qfs!tibsf!po!71-111!tibsft*
Tibsft!jo!YZ!Mue/!B0d Es/ :-11-111
Up!YZ!Mue/!B0d :-11-111
)Cfjoh!tibsft!sfdfjwfe!gspn!YZ!Mue/!bhbjotu!qvsdibtf!dpotjefsbujpo*
)Cfjoh!uif!usbotgfs!pg!tibsf!dbqjubm!boe!hfofsbm!sftfswf!up!Tvoesz!Tibsfipmefst!Bddpvou*
Tibsft!jo!YZ!Mue/!B0d!)Opuf!3* Es/ 3-11-111
Up!Jowftunfout!B0d 2-11-111
Up!Tvoesz!Tibsfipmefst!B0d!)Uvupsjbm!Opuf* 2-11-111
)Cfjoh!uif!sfdfjqu!pg!tibsft!jo!YZ!Mue/!gspn!uif!mjrvjebups!pg!Z!Mue/!bhbjotu!9-111!tibsft!ifme!jo
Z!Mue/<!qspgju!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
)Cfjoh!uif!ejtusjcvujpo!pg!tibsft!jo!YZ!Mue/!bnpoh!uif!fyjtujoh!tibsfipmefst*
Working Notes :
Up!Mboe!boe!Cvjmejoh!B0d 2-11-111 Cz!Puifs!Dvssfou!Mjbcjmjujft!B0d 7-11-111
Up!Qmbou!boe!Nbdijofsz!B0d 8-11-111 Cz!Tfdvsfe!Mpbot!B0d 7-11-111
Up!Jowfoupsjft!B0d :-11-111 Cz!YZ!Mue/!B0d :-11-111
Up!Dbti!boe!Cbol!B0d 2-11-111
32-11-111 32-11-111
)3* Y!Mue/!ipmejoh!9-111!tibsft!pg!Z!Mue/!Gspn!uif!mjrvjebups!pg!Z!Mue/-!Y!Mue/!xjmm!hfu!!6-11-111!0!31-111!!9-111!>!!3-11-111/
Jo!uif!cpplt!pg!Y!Mue/!dptu!pg!jowftunfou!jt!!2-11-111/!Uifsfgpsf-!qspgju!pg!!2-11-111!)!3-11-111!Ï!!2-11-111*!jt!up!cf!usbotgfssfe
up!Tvoesz!Tibsfipmefst!Bddpvou/
Uvupsjbm!Opuf!;!Qspgju!po!sfbmjtbujpo!pg!jowftunfou!jo!Z!Mue/!dbo!cf!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!jo!qmbdf!pg!Tvoesz!Tibsfipmefst
Bddpvou/
Illustration 24
Uif!gpmmpxjoh!bsf!uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!N!Mue/!boe!O!Mue/
Balance Sheets of M Ltd. and N Ltd. as at . . .
Opuf N!Mue/ O!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsft!pg!!21!fbdi 51-111 31-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt!Bddpvou 6-111 )2-111*
)b*!Mpoh.ufsn!Cpsspxjoht!;
Mpbo!!I!Mue/ 21-111 Ð
Mpbo!Ð!N!Mue/ Ð 9-111
UPUBM 81-111 44-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)j*! !Ubohjcmf!Bttfut!Ð!Tvoesz!Bttfut 53-111 44-111
)c*!Opo.dvssfou!jowftunfout!Ð!Tibsft!jo!O!mue/ 31-111 Ð
)f*!Tipsu.ufsn!Mpbot!boe!Bewbodft!Ð!Mpbot!Ð!O!Mue/ 9-111 Ð
UPUBM 81-111 44-111
Uif!xipmf!pg!uif!tibsft!pg!N!Mue/!bsf!ifme!cz!I!Mue/!boe!uif!foujsf!tibsf!dbqjubm!pg!O!Mue/!jt!ifme!cz!N!Mue/
B!ofx!dpnqboz!N!O!Mue/!jt!gpsnfe!up!bdrvjsf!uif!tvoesz!bttfut!boe!dsfejupst!pg!N!Mue/!boe!O!Mue/!boe!gps!uijt!qvsqptf-
uif!tvoesz!bttfut!pg!N!Mue/!bsf!sfwbmvfe!bu!!41-111!boe!uiptf!pg!O!Mue/!bu!!31-111/!Uif!bnpvou!pg!uif!mpbo!evf!up!I!Mue/
jt!bmtp!up!cf!ejtdibshfe!jo!tibsf!jo!uif!ofx!dpnqboz<!uif!efcu!evf!up!N!Mue/!jt!bmtp!up!cf!tjnjmbsmz!ejtdibshfe/
Tipx!uif!Kpvsobm!Fousjft!ofdfttbsz!up!dmptf!uif!cpplt!pg!N!Mue/!boe!O!Mue/ \D/B/!)Joufs*!Ð!Bebqufe^
Solution In the books of N Ltd.

Journal Dr. Cr.
Up!Tvoesz!Bttfut!B0d 44-111
)Cfjoh!uif!usbotgfs!pg!tvoesz!bttfut!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
)Cfjoh!uif!usbotgfs!pg!dsfejufst!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
Tibsf!Dbqjubm!B0d Es/ 31-111
Up!Tvoesz!Tibsfipmefst!)N!Mue/*!B0d 31-111
)Cfjoh!uif!usbotgfs!pg!tibsf!dbqjubm!up!Tvoesz!Tibsfipmefst!Bddpvou*
NO!Mue/!B0d!)Opuf!2* Es/ 25-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!NO!Mue/*
Tvoesz!Tibsfipmefst!)N!Mue/*!B0d Es/ 2-111
)Cfjoh!uif!efcju!cbmbodf!pg!Qspgju!boe!Mptt!Bddpvou!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
Tibsft!jo!NO!Mue/!B0d Es/ 25-111

Up!NO!Mue/!B0d 25-111
)Cfjoh!uif!bnpvou!pg!qvsdibtf!dpotjefsbujpo!sfdfjwfe!jo!tibsft!pg!NO!Mue/*
Mpbo!)N!Mue/*!B0d Es/ 9-111
Up!Tibsft!jo!NO!Mue/!B0d 25-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!tibsfipmefst!boe!mpbo!gspn!N!Mue/!ejtdibshfe!cz!jttvf!pg!
tibsft!jo!NO!Mue/*
Xpsljoh!Opuft!;!)2*!Qvsdibtf!dpotjefsbujpo!pg!O!Mue!>!Tvoesz!bttfut!Ï!Dsfejupst!>!!31-111!Ï!!7-111!>!!25-111/
Up!Tvoesz!Bttfut!B0d 44-111 Cz!Dsfejupst!B0d 7-111
Cz!NO!Mue/!B0d 25-111
Cz!Tvoesz!Tibsfipmefst!B0d!)Mptt* 24-111
44-111 44-111
Dr. (3) Sundry Shareholders (M Ltd.) Account Cr.

Up!Qspgju!boe!Mptt!B0d 2-111 Cz!Tibsf!Dbqjubm!B0d 31-111
Up!Tibsft!jo!NO!Mue/!B0d 7-111
31-111 31-111
Dr. (4) Loan ū M Account Cr.

Up!Tibsft!jo!NO!Mue/!B0d 9-111 Cz!Cbmbodf!c0e 9-111
9-111 9-111
In the books of M Ltd.
Journal Dr. Cr.
Up!Tvoesz!Bttfut!B0d 53-111
)Cfjoh!uif!usbotgfs!pg!tvoesz!bttfut!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
)Cfjoh!uif!usbotgfs!pg!dsfejufst!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
NO!Mue/!B0d!)Opuf!2* Es/ 26-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!NO!Mue/*
Up!NO!Mue/!B0d 26-111
)Cfjoh!uif!bnpvou!pg!qvsdibtf!dpotjefsbujpo!sfdfjwfe!jo!tibsft!pg!NO!Mue/*
Up!Tibsft!jo!O!Mue/!B0d 31-111
Up!Mpbo!Ð!O!Mue/!B0d 9-111
)Cfjoh!uif!tibsft!jo!NO!Mue/!sfdfjwfe!bhbjotu!jowftunfout!jo!O!Mue/!boe!mpbo!up!O!Mue/!pg!
!7-111!boe!!9-111!sftqfdujwfmz*
Tibsf!Dbqjubm!B0d Es/ 51-111

Up!Tvoesz!Tibsfipmefst!)I!Mue/*!B0d 56-111
)Cfjoh!uif!tibsf!dbqjubm!boe!Qspgju!'!Mptt!Bddpvou!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou!*
Tvoesz!Tibsfipmefst!)I!Mue/*!B0d Es/ 37-111
Tvoesz!Tibsfipmefst!)I!Mue/*!B0d Es/ 2:-111
Mpbo!Ð!I!Mue/!B0d Es/ 21-111
Up!Tibsft!jo!NO!Mue/!B0d 3:-111
)Cfjoh!uif!ejtusjcvujpo!pg!uif!tibsft!sfdfjwfe!gspn!NO!Mue/!boe!mjrvjebups!pg!O!Mue/*
Xpsljoh!Opuft!;
)2* Qvsdibtf!dpotjefsbujpo!pg!N!Mue/!>!Tvoesz!Bttfut!Ï!Dsfejupst!>!!41-111!Ï!!26-111!>!!26-111/
)3* Mptt! po! sfbmjtbujpo! pg! jowftunfou! jo! tibsft! pg! O! Mue/! ! 25-111! dbo! cf! usbotgfssfe! up! Tvoesz! Tibsfipmefst! Bddpvou! xjuipvu
usbotgfssjoh!up!Sfbmjtbujpo!Bddpvou/!Jo!uibu!dbtf-!sfbmjtbujpo!mptt!xjmm!cf!!23-111!pomz/
Up!Tvoesz!Bttfut!B0d 53-111 Cz!Dsfejupst!B0d 26-111
Up!Tibsft!jo!O!Mue/!B0d 25-111 Cz!NO!Mue/!B0d!)Qvsdibtf!Dpotjefsbujpo* 26-111
! !)Mptt!po!jowftunfou!!31-111!Ï!!7-111* Cz!Tibsfipmefst!B0d!)Mptt!po!sfbmjtbujpo* 37-111
67-111 67-111
Dr. (4) Sundry Shareholders Account Cr.
Up!Sfbmjtbujpo!B0d 37-111 Cz!Tibsf!Dbqjubm!B0d 51-111
Up!Tibsft!jo!NO!Mue/!B0d 2:-111 Cz!Qspgju!boe!Mptt!B0d 6-111
56-111 56-111
Dr. (5) Shares in MN Ltd. Account Cr.
Up!NO!Mue/!B0d!)Qvsdibtf!Dpotjefsbujpo* 26-111 Cz!Tibsfipmefst!B0d 2:-111
Up!Tibsft!jo!O!Mue/!B0d 7-111 Cz!Mpbo!Ð!I!Mue/!B0d 21-111
Up!Mpbo!Ð!O!Mue/!B0d 9-111
3:-111 3:-111
Dr. (6) Shares in N Ltd. Account Cr.
Up!Cbmbodf!c0e 31-111 Cz!Tibsft!jo!NO!Mue/!B0d 7-111
Cz!Sfbmjtbujpo!B0d!)Mptt* 25-111
31-111 31-111
Dr. (7) Loan ū N Ltd. Account Cr.
Up!Cbmbodf!c0e 9-111 Cz!Tibsft!jo!NO!Mue/!B0d 9-111
9-111 9-111
Dr. (8) Loan ū H Ltd. Account Cr.
Up!Tibsft!jo!NO!Mue/!B0d 21-111 Cz!Cbmbodf!c0e 21-111
21-111 21-111
Situation 2 : Transferee company holding shares of transferor company

Uif!usbotgfsff!dpnqboz!nbz!ipme!tpnf!tibsft!pg!uif!usbotgfsps!dpnqboz/!Bu!uif!ujnf!pg!mjrvjebujpo!pg!uif
usbotgfsps!dpnqboz-!uif!usbotgfsff!dpnqboz!xjmm!hfu!b!qpsujpo!pg!uif!ofuxpsui!pg!usbotgfsps!dpnqboz!bt!b
tibsfipmefs!pg!uibu!dpnqboz/
Hfofsbmmz-!qvsdibtf!dpotjefsbujpo!jt!tbujtgjfe!cz!uif!jttvf!pg!tibsft!pg!uif!usbotgfsff!dpnqboz/!Cvu!uif
usbotgfsff! dpnqboz! dboopu! cf! qbje! jo! jut! pxo! tibsft/! Jo! uijt! dbtf-! pomz! tibsft! up! cf! hjwfo! up! uif! pvutjef
tibsfipmefst!xjmm!cf!jttvfe!cz!uif!usbotgfsff!dpnqboz!up!uif!mjrvjebups!pg!uif!usbotgfsps!dpnqboz/
Bddpvoujoh!bekvtunfout!bsf!epof!jo!uif!gpmmpxjoh!nboofs!;
In the books of the Transferor Company
2/!Usbotgfsff!Dpnqboz!Bddpvou Es/ \Gvmm!qvsdibtf!dpotjefsbujpo^
3/!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou Es/ \Bnpvou!qbzbcmf!up!pvutjef!tibsfipmefst^
4/!Tvoesz!Tibsfipmefst!Bddpvou Es/ \Bnpvou!qbzbcmf!up!pvutjef!tibsfipmefst^
! ! ! Up!Tibsft!jo!Usbotgfsff!Dpnqboz!Bddpvou
Bgufs!qbttjoh!uif!bcpwf!fousjft!xibufwfs!cbmbodf!jt!evf!gspn!uif!usbotgfsff!dpnqboz!jt!uif!fybdu!bnpvou
qbzbcmf!up!uif!usbotgfsff!dpnqboz!bt!uif!sfnbjojoh!tibsfipmefst!cz!uif!mjrvjebupst!pg!uif!usbotgfsps!dpnqboz/
Opx-!uif!bnpvou!jt!ofjuifs!hjwfo!cz!uif!usbotgfsff!dpnqboz!bt!b!qvsdibtf!dpotjefsbujpo!up!uif!mjrvjebups
pg!uif!usbotgfsps!dpnqboz!ops!uif!mjrvjebups!pg!uif!usbotgfsps!dpnqboz!xjmm!qbz!uif!usbotgfsff!dpnqboz!bt!b
tibsfipmefs/!Ipxfwfs-!uif!gpmmpxjoh!bekvtunfou!fousz!jt!up!cf!qbttfe!;
Tvoesz!Tibsfipmefst!Bddpvou Es/ \Cbmbodf!bnpvou^
In the books of the Transferee Company
(a) In case of Amalgamation in the Nature of Merger
)j*!Cvtjoftt!Qvsdibtft!Bddpvou Es/ \Ofu!bnpvou!qbzbcmf!up!pvutjef!tibsfipmefst^
)jj*!Tvoesz!Bttfut!Bddpvou Es/
! ! ! Up!Tvoesz!Mjbcjmjujft!Bddpvou
! ! ! Up!Sftfswf!Bddpvou \Bekvtufe^
! ! ! Up!Qspgju!boe!Mptt!Bddpvou
! ! ! Up!Cvtjoftt!Qvsdibtft!Bddpvou \Ofu!bnpvou!qbzbcmf!up!pvutjef!tibsfipmefst^
)jjj*!Mjrvjebups!pg!Usbotgfsps!Dpnqboz!Bddpvou Es/
! ! ! Up!Frvjuz!Tibsf!Dbqjubm!Bddpvou \Ofu!tibsft!jttvfe!up!pvutjef!tibsfipmefst^
)jw*!Sftfswf!Bddpvou Es/ \Dptu!pg!jowftunfou^
! ! ! Up!Jowftunfou!jo!Tibsft!pg!Usbotgfsps!Dpnqboz!Bddpvou
Illustration 25
Uif!gpmmpxjoh!bsf!uif!Cbmbodf!Tiffut!pg!B!Mue!boe!C!Mue!bt!po!2/5/3129!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsft!pg!!21!fbdi 3-11-111 2-31-111
)c*!Sftfswft!boe!Tvsqmvt!;
Sftfswf 51-111 41-111
)b*!Puifs!Dvssfou!Mjbcjmjujft! 21-111 26-111
UPUBM 3-71-111 2-81-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Mboe!boe!Cvjmejoh 2-51-111 2-11-111
)c*!Opo.dvssfou!jowftunfout!Ï!3-111!Tibsft!jo!C!Mue/ 35-111 Ð
)b*!Puifs!Dvssfou!Bttfut :7-111 81-111
UPUBM 3-71-111 2-81-111
C!Mue!jt!bctpscfe!cz!B!Mue!cz!ubljoh!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!bu!cppl!wbmvf/!Qvsdibtf!dpotjefsbujpo!cfjoh!5
frvjuz!tibsft!pg!B!Mue!pg!!21!fbdi!gps!fwfsz!6!tibsft!ifme!jo!C!Mue/
Tipx!uif!ofdfttbsz!Mfehfs!Bddpvout!up!dmptf!uif!cpplt!pg!C!Mue/!Bmtp!tipx!uif!kpvsobm!fousjft!boe!Cbmbodf!Tiffu!pg
B!Mue!bgufs!bctpsqujpo/
Solution
Qvsdibtf!dpotjefsbujpo!>!23-111!!506!!!21!>!!:7-111/!B!Mue!ipmet!3-111!tibsft!pg!C!Mue!)pvu!pg!upubm!23-111!tibsft*/!Po!mjrvjebujpo!pg!C!Mue/-!
B!Mue!xjmm!hfu!207ui!pg!uif!bnpvou!hjwfo!up!C!Mue/-!j/f/-!207ui!pg!!:7-111!>!!27-111/!Bu!uif!ujnf!pg!qbznfou!pg!qvsdibtf!dpotjefsbujpo!cz!B!Mue/-!
ju!xjmm!qbz!bgufs!efevdujoh!!27-111/!B!Mue!xjmm!jttvf!tibsft!gps!!91-111!)!:7-111!Ï!!27-111*-!j/f/-!9-111!tibsft!pg!!21!fbdi/

3129 Up!Mboe!boe!Cvjmejoh!B0d 2-11-111 3129 Cz!Puifs!Dvssfou!Mjbcjmjujft!B0d 26-111
Bqs/!2 Up!Dvssfou!B0d 81-111 Bqs/!2 Cz!B!Mue/!B0d :7-111
!!# Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 6:-111
2-81-111 2-81-111

3129 Up!B!Mue/!B0d!)tfu!pgg* 27-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 2-31-111
Bqs/!2 Up!Sfbmjtbujpo!B0d 6:-111 Bqs/!2 Cz!Sftfswf!B0d 41-111
Up!Tibsft!jo!B!Mue/!B0d 91-111 ! ! # Cz!Qspgju!boe!Mptt!B0d 6-111
2-66-111 2-66-111
Dr. A Ltd. Account Cr.

3129 Up!Sfbmjtbujpo!B0d :7-111 3129 Cz!Tibsft!jo!B!Mue/!B0d 91-111
Bqs/!2 Bqs/!2 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)tfu!pgg* 27-111
:7-111 :7-111
Dr. Shares in A Ltd. Account Cr.
3129 Up!B!Mue/!B0d 91-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 91-111
Bqs/!2 Bqs/!2
Journal Dr. Cr.
3129 Cvtjoftt!Qvsdibtf!B0d Es/ 91-111
Bqs/!2 Up!Mjrvjebups!pg!C!Mue/!B0d 91-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!C!Mue/!bt!qfs!bhsffnfou!ebufe!/!/!/*
Puifs!Dvssfou!Bttfut!B0d Es/ 81-111
Up!Sftfswf!B0d!\!41-111!Ï!)91-111!Ï!2-31-111*^ 81-111
Up!Puifs!Dvssfou!Mjbcjmjujft!B0d 26-111
Up!Cvtjoftt!Qvsdibtf!B0d 91-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfopwfs!boe!uif!ejggfsfodf!cfuxffo!uif!tibsf!dbqjubm
jttvfe!boe!tibsf!dbqjubm!pg!C!Mue/!bekvtufe!bhbjotu!sftfswft*
Up!Jowftunfou!B0d 35-111
)Cfjoh!uif!dptu!pg!jowftunfou!jo!uif!tibsft!pg!C!Mue/!bekvtufe!bhbjotu!uif!sftfswf*
Mjrvjebups!pg!C!Mue/!B0d Es/ 91-111
)Cfjoh!uif!jttvf!pg!ofdfttbsz!tibsft!up!pvutjef!tibsfipmefst*
Ju!jt!bo!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Nfshfs!cfdbvtf!bmm!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!bu!cppl
wbmvf!boe!foujsf!qvsdibtf!dpotjefsbujpo!xjmm!cf!tbujtgjfe!cz!jttvf!pg!frvjuz!tibsft!pg!B!Mue/!Uifsfgpsf-
qppmjoh!pg!joufsftut!nfuipe!pg!bddpvoujoh!gps!bnbmhbnbujpo!ibt!up!cf!bepqufe/
A Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Puifs!Dvssfou!Mjbcjmjujft )4* 36-111
UPUBM 5-17-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
)b*!Puifs!Dvssfou!Bttfut )6* 2-77-111
UPUBM 5-17-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )4*!Puifs!Dvssfou!Mjbcjmjujft
Bvuipsjtfe!Dbqjubm!; Puifs!Dvssfou!Mjbcjmjujft!)!21-111!,!!26-111* 36-111
39-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 3-91-111 Cvjmejoh 3-51-111
)Pg!uif!bcpwf!tibsft!9-111!frvjuz!tibsft!ibwf!cffo )6*!Puifs!Dvssfou!Bttfut
jttvfe!gps!dpotjefsbujpo!puifs!uibo!dbti* Puifs!Dvssfou!Bttfut!)!:7-111!,!81-111* 2-77-111
Sftfswf 97-111
Qspgju!boe!Mptt!Bddpvou 26-111
2-12-111
Illustration 26
Uif!gpmmpxjoh!bsf!uif!Cbmbodf!Tiffut!pg!Zft!Mue/!boe!Op!Mue/!bt!po!42tu!Nbsdi-!3129!;!)bmm!gjhvsft!jo!!dspsft*
Qbsujdvmbst Zft!Mue/ Op!Mue/!
Tpvsdft!pg!gvoet!;
Tibsf!Dbqjubm!;
Bvuipsjtfe 36 6
Jttvfe!boe!Tvctdsjcfe!;!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 23 6
Sftfswf!boe!Tvsqmvt 99 21
211 26
Tibsfipmefst!Gvoet
Votfdvsfe!Gvoe!gspn!Zft!Mue/ Ð 21
211 36
Gvoet!fnqmpzfe!jo!;
Gjyfe!Bttfut!;!Dptu 81 41
Mftt;!Efqsfdjbujpo 61 35
Xsjuufo!epxo!wbmvf 31 7
Jowftunfout!bu!dptu!;!41!Mblit!Frvjuz!Tibsft!pg!!21!fbdi!pg!Op!Mue/ 4
Mpoh.ufsn!mpbo!up!Op!Mue/ 21 Ð
Dvssfou!Bttfut 211 45
Mftt;!Dvssfou!Mjbcjmjujft 44 78 26 2:
211 36
Po!uibu!ebz-!Zft!Mue/!bctpscfe!Op!Mue/!Uif!nfncfst!pg!Op!Mue/!bsf!up!hfu!pof!frvjuz!tibsf!pg!Zft!Mue/!jttvfe!bu!b
qsfnjvn!pg!!3!qfs!tibsf!gps!fwfsz!gjwf!frvjuz!tibsft!ifme!cz!uifn!jo!Op!Mue/!Uif!ofdfttbsz!bqqspwbmt!bsf!pcubjofe/
Zpv!bsf!btlfe!up!qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!uif!uxp!dpnqbojft!up!hjwf!fggfdu!up!uif!bcpwf/
\D/B/!)Joufs*!Ð!Bebqufe^
Solution
Qvsdibtf!dpotjefsbujpo!>!6-11-11-111!0!6!y!2!y!!23!>!!2-31-11-111/!Zft!Mue/!ibe!41!mblit!frvjuz!tibsft!pg!Op!Mue/!)pvu!pg!upubm!61!mblit!frvjuz
tibsft*/!Po!mjrvjebujpo!pg!Op!Mue/-!Zft!Mue/!xjmm!hfu!406ui!pg!!2-31-11-111!>!!83-11-111/!Bu!uif!ujnf!pg!qbznfou!pg!qvsdibtf!dpotjefsbujpo!cz!Zft
Mue/-!ju!xjmm!qbz!bgufs!efevdujoh!!83-11-111/!Zft!Mue/!xjmm!jttvf!tibsft!gps!!59-11-111!)!2-31-11-111!Ï!!83-11-111*-!j/f/-!!59-11-111!0!23!>!5-11-111
tibsft!pg!!21!fbdi!bu!qsfnjvn!pg!!3!qfs!tibsf/
In the books of No Ltd.
Journal Dr. Cr.
Ebuf Qbsujdvmbst M/G/ !)Dspsf* !)Dspsf*
3129 Sfbmjtbujpo!B0d Es/ 75/11
Nbs/!42 Up!Gjyfe!Bttfut!B0d 41/11
Up!Dvssfou!Bttfut!B0d 45/11
)Cfjoh!ejggfsfou!bttfut!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg!bnbmhbnbujpo*
Votfdvsfe!Mpbot!gspn!Zft!Mue/!B0d Es/ 21/11
Dvssfou!Mjbcjmjujft!B0d Es/ 26/11
Qspwjtjpo!gps!Efqsfdjbujpo!B0d Es/ 35/11
Up!Sfbmjtbujpo!B0d 5:/11
)Cfjoh!ejggfsfou!mjbcjmjujft!boe!qspwjtjpot!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg
bnbmhbnbujpo*
Zft!Mue/!B0d Es/ 2/31
Up!Sfbmjtbujpo!B0d 2/31
)Cfjoh!uif!bnpvou!evf!gspn!Zft!Mue/!jo!sftqfdu!pg!qvsdibtf!dpotjefsbujpo*
Frvjuz!Tibsf!Dbqjubm!B0d Es/ 6/11
Sftfswf!boe!Tvsqmvt!B0d Es/ 21/11
Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d 26/11
)Cfjoh!uif!usbotgfs!pg!frvjuz!tibsf!dbqjubm!boe!sftfswf!boe!tvsqmvt!up!Tvoesz!Frvjuz
31/:1!!!Bnbmhbnbujpo
Tvoesz!Frvjuz!Tibsfipmefst!B0d Es/ 24/91

Up!Sfbmjtbujpo!B0d!)Opuf!2* 24/91
Frvjuz!Tibsft!jo!Zft!Mue/!B0d Es/ 1/59
Up!Zft!Mue/!B0d 1/59
)Cfjoh!5-11-111!frvjuz!tibsft!pg!!21!fbdi!gvmmz!jttvfe!bu!b!qsfnjvn!pg!!3!qfs!tibsf!sfdfjwfe
gspn!Zft!Mue/*
Up!Frvjuz!Tibsft!jo!Zft!Mue/!B0d 1/59
)Cfjoh!uif!tibsft!pg!Zft!Mue/!ejtusjcvufe!bnpohtu!uif!pvutjef!tibsfipmefst*
Up!Zft!Mue/!B0d 1/83
)Cfjoh!uif!tfu.pgg!gps!41!mblit!tibsft!ifme!cz!Zft!Mue/!jo!Op!Mue/*
Working Note :
Ebuf Qbsujdvmbst !)Dspsf* Ebuf Qbsujdvmbst !)Dspsf*
3129 Up!Gjyfe!Bttfut!B0d 41/11 3129 Cz!Votfdvsfe!Mpbo!gspn!Zft!Mue/!B0d 21/11
Nbs!42 Up!dvssfou!Bttfut!B0d 45/11 Nbs!42 Cz!Dvssfou!Mjbcjmjujft!B0d 26/11
Cz!Qspwjtjpo!gps!Efqsfdjbujpo!B0d 35/11
Cz!Zft!Mue/!B0d!)qvsdibtf!dpotjefsbujpo* 2/31
Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 24/91
75/11 75/11
Ju!jt!bo!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Nfshfs!cfdbvtf!bmm!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!bu!cppl
wbmvf!boe!foujsf!qvsdibtf!dpotjefsbujpo!xjmm!cf!tbujtgjfe!cz!jttvf!pg!frvjuz!tibsft!pg!B!Mue/!Uifsfgpsf-
qppmjoh!pg!joufsftut!nfuipe!pg!bddpvoujoh!gps!bnbmhbnbujpo!ibt!up!cf!bepqufe/
In the books of Yes Ltd.
Journal Dr. Cr.
3129 Gjyfe!Bttfut!B0d Es/ 41/11
Nbs/!42 Dvssfou!Bttfut!B0d Es/ 45/11
Up!Votfdvsfe!Mpbo!gspn!Zft!Mue/!B0d 21/11
Up!Dvssfou!Mjbcjmjujft!B0d 26/11
Up!Qspwjtjpo!gps!Efqsfdjbujpo!B0d 35/11
Up!Cvtjoftt!Qvsdibtf!B0d 1/59
Up!Sftfswf!boe!Tvsqmvt!\21!Ï!)1/59!Ï!6*^ 25/63
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs/!Uif!ejggfsfodf!cfuxffo!uif!tibsf!dbqjubm
jttvfe!jodmvejoh!qsfnjvn!boe!tibsf!dbqjubm!pg!Op!Mue/!bekvtufe!jo!sftfswf!boe!tvsqmvt*
Cvtjoftt!Qvsdibtf!B0d Es/ 1/59
Up!Mjrvjebups!pg!Op!Mue/!B0d 1/59
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Op!Mue/!bt!qfs!bhsffnfou!ebufe!/!/!/*
Mjrvjebups!pg!Op!Mue/!B0d Es/ 1/59
Up!Frvjuz!Tibsf!Dbqjubm!B0d 1/51
Up!Tfdvsjujft!Qsfnjvn!B0d 1/19
)Cfjoh!uif!jttvf!pg!5-11-111!frvjuz!tibsft!pg!!21!fbdi!gvmmz!qbje!vq!bu!b!qsfnjvn!pg!!3!qfs
tibsf!up!tbujtgz!uif!qvsdibtf!dpotjefsbujpo*
Sftfswf!boe!Tvsqmvt!B0d Es/ 4/11
Up!Jowftunfou!jo!Tibsft!pg!Op!Mue/!B0d 4/11
)Cfjoh!uif!dptu!pg!jowftunfou!jo!tibsft!pg!Op!Mue/!bekvtufe!bhbjotu!sftfswf!boe!tvsqmvt*
Votfdvsfe!Mpbo!gspn!Zft!Mue/!B0d Es/ 21/11
Up!Mpoh.ufsn!Mpbo!up!Op!Mue/!B0d 21/11
)Cfjoh!uif!tfu.pgg!pg!mpbo!up!Op!Mue/*
Npefso!Bddpvoubodz - II!!!31/:2
(b) In case of Amalgamation in the Nature of Purchase

)j*!Cvtjoftt!Qvsdibtf!Bddpvou Es/ \Upubm!qvsdibtf!dpotjefsbujpo^
)jj*!Tvoesz!Bttfut!Bddpvou Es/ \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! Up!Tvoesz!Mjbcjmjujft!Bddpvou \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! Up!Cvtjoftt!Qvsdibtft!Bddpvou \Upubm!qvsdibtf!dpotjefsbujpo^
! ! ! Up!Dbqjubm!Sftfswf!Bddpvou \Cbmbodjoh!gjhvsf^
! ! ! Ps
! ! ! Tvoesz!Bttfut!Bddpvou Es/ \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! Hppexjmm!Bddpvou Es/ \Cbmbodjoh!gjhvsf^
! ! ! Up!Cvtjoftt!Qvsdibtft!Bddpvou \Upubm!Qvsdibtf!Dpotjefsbujpo^
! ! ! Up!Frvjuz!Tibsf!Dbqjubm!Bddpvou \Ofu!tibsft!jttvfe^
)jw*!Mjrvjebups!pg!Usbotgfsps!Bddpvou Es/ \Ejggfsfodf!cfuxffo!upubm!qvsdibtf!
!dpotjefsbujpo!Ï!Tibsf!dbqjubm!jttvfe^
Cbmbodf!pg!Jowftunfou!jo!Tibsft!pg!Usbotgfsps!Dpnqboz!Bddpvou!xjmm!cf!dmptfe!cz!usbotgfssjoh!up!Hppe.
xjmm!Bddpvou!ps!Dbqjubm!Sftfswf!Bddpvou/
Bmufsobujwf!Fousjft
)j*!Cvtjoftt!Qvsdibtf!Bddpvou Es/ \Ofu!bnpvou!qbzbcmf!up!pvutjef!tibsfipmefst^
)jj*!Tvoesz!Bttfut!Bddpvout Es/ \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! Up!Cvtjoftt!Qvsdibtft!Bddpvou \Ofu!qvsdibtf!dpotjefsbujpo^
! ! ! Up!Dbqjubm!Sftfswf!Bddpvou \Cbmbodjoh!gjhvsf^
! ! ! Ps
! ! ! Tvoesz!Bttfut!Bddpvou Es/ \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! Hppexjmm!Bddpvou! Es/ \Cbmbodjoh!gjhvsf^
! ! ! ! ! ! Up!Tvoesz!Mjbcjmjujft!Bddpvou \Joejwjevbmmz-!bu!bhsffe!wbmvf^
! ! ! ! ! ! Up!Cvtjoftt!Qvsdibtft!Bddpvou \Ofu!bnpvou!qbzbcmf!up!pvutjef!tibsfipmefst^
! ! ! Up!Frvjuz!Tibsf!Dbqjubm!Bddpvou \Ofu!tibsft!jttvfe^
)jw*!Hppexjmm!0!Dbqjubm!Sftfswf!Bddpvou Es/ \Dptu!pg!jowftunfou^
Illustration 27
Uif!Cbmbodf!Tiffut!pg!Tvo!Mue/!boe!Nppo!Mue/!bt!po!42/14/3129!bsf!bt!cfmpx!;
Balance Sheets of Sun. Ltd. and Moon Ltd. as at 31st March, 2018
)2* )3* )4* )5*
! ! ! ! ! ! ! ! ! ! ! ! ! 9&!Qsfgfsfodf!Tibsf!pg!!211!fbdi 6-11-111 2-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Sftfswf 2-51-111 2-11-111
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!8&!Efcfouvsft!pg!!211!fbdi Ð 2-11-111
)b*!Tipsu.ufsn!Cpsspxjoht!Ð!Mpbo!gspn!Tvo!Mue/ Ð 41-111
)c*!Puifs!Dvssfou!Mjbcjmjujftt! 3-61-111 81-111
UPUBM 24-:1-111 9-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! )j*! !Ubohjcmf!Bttfut
! ! ! ! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoh 9-11-111 7-11-111
)c*!Opo.dvssfou!jowftunfout!Ð!6-111!Frvjuz!Tibsft!pg!Nppo!Mue/ 71-111 Ð
)b*!Tipsu.ufsn!Mpbot!boe!Bewbodft!Ð!Mpbo!up!Nppo!Mue/ 41-111 Ð
)c*!Puifs!Dvssfou!Bttfut 6-11-111 3-11-111
UPUBM 24-:1-111 9-11-111
Tvo!Mue/!efdjeft!up!ublf!pwfs!Nppo!Mue/!po!uif!gpmmpxjoh!ufsnt!;
)b* Tvo!Mue/!xjmm!jttvf!8!frvjuz!tibsft!pg!!21!bu!b!qsfnjvn!pg!31&!boe!!6!dbti!gps!6!frvjuz!tibsft!pg!Nppo!Mue/
tvssfoefsfe/
)c* Qsfgfsfodf!tibsfipmefst!pg!Nppo!Mue/!bsf!up!cf!hjwfo!pof!7&!qsfgfsfodf!tibsf!pg!!211!jo!Tvo!Mue/!gps!fwfsz
tibsf!ifme/!Uiftf!tibsft!bsf!up!cf!jttvfe!bu!b!qsfnjvn!pg!6&/
)d* 8&!Efcfouvsft!pg!Nppo!Mue/!bsf!up!cf!sfeffnfe!bu!9&!qsfnjvn!cz!jttvf!pg!8&!Efcfouvsft!pg!Tvo!Mue/!bu!21&
ejtdpvou/
)e* Mjrvjebujpo!fyqfotft!bnpvoujoh!up!!21-111!bsf!up!cf!qbje!cz!Tvo!Mue/
)f* Tvo!Mue/!sfwbmvft!uif!gjyfe!bttfut!pg!Nppo!Mue/!bu!!9-11-111!po!ublf!pwfs/
Dmptf!uif!cpplt!pg!Nppo!Mue/-!qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!Tvo!Mue/!boe!qsfqbsf!uif!Cbmbodf!Tiffu!bgufs!uif
ublfpwfs/
Qbsujdvmbst
)j*!Qsfgfsfodf!Tibsfipmefst!; 2-16-111
7&!Qsfgfsfodf!Tibsft!jo!Tvo!Mue/!)2-111!y!!216*
)jj*!Frvjuz!Tibsfipmefst!;
)b*!Frvjuz!Tibsft!\51-111!0!6!y!8!y!!23^ 7-83-111
)c*!Dbti!\51-111!0!6!y!!6^ 51-111 8-23-111
Qvsdibtf!Dpotjefsbujpo!xjmm!cf!qbje!cz!Tvo!Mue/
)j*!Jo!7&!Qsfgfsfodf!Tibsft!pg!Tvo!Mue/ 2-16-111
)jj*!Jo!Frvjuz!Tibsft!)809!pg!!7-83-111* 6-99-111
)jjj*!Jo!Dbti!)809!pg!!51-111* 46-111
8-39-111
In the books of Moon Ltd.
3129 Up!Mboe!boe!Cvjmejoh!B0d 7-11-111 3129 Cz!8&!Efcfouvsft!B0d 2-11-111
Nbs/!42 Up!Dvssfou!Bttfut!B0d 3-11-111 Nbs/!42 Cz!Mpbo!gspn!Tvo!Mue/!B0d 41-111
!!!# Up!Tvoesz!Qsfgfsfodf!Tibsfipmefst!B0d 6-111 !!!# Cz!Puifs!Mjbcjmjujft!B0d 81-111
!!!# Up!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)Qspgju* 3-23-111 !!!# Cz!Tvo!Mue/!B0d!)qvsdibtf!dpotjefsbujpo* 9-28-111
21-28-111 21-28-111

3129 Up!Frvjuz!Tibsft!jo!Tvo!Mue/!B0d 6-99-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 5-11-111
Nbs/!42 Up!Cbol!B0d 46-111 Nbs/!42 Cz!Sftfswft!B0d 2-11-111
!!!# Up!Tvo!Mue/!B0d!)tfu.pgg* 9:-111 ! ! ! # Cz!Sfbmjtbujpo!B0d!)Qspgju* 3-23-111
8-23-111 8-23-111
Dr. Sun Ltd. Account Cr.

3129 Up!Sfbmjtbujpo!B0d 9-28-111 3129 Cz!7&!Qsfgfsfodf!Tibsft!jo!Tvo!Mue/ 2-16-111
Nbs/!42 Nbs/!42 Cz!Frvjuz!Tibsft!jo!Tvo!Mue/!B0d 6-99-111
!!!# Cz!Cbol!B0d 46-111
!!!# Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d!)tfu.pgg* 9:-111
9-28-111 9-28-111
Dr. Sundry Preference Shareholders Account Cr.

3129 Up!7&!Qsfgfsfodf!Tibsft!jo!Tvo!Mue/!B0d 2-16-111 3129 Cz!8&!Qsfgfsfodf!Tibsf!Dbqjubm!B0d 2-11-111
Nbs/!42 Nbs/!42 Cz!Sfbmjtbujpo!B0d!)Fyusb!bnpvou!qbje* 6-111
2-16-111 2-16-111

Journal Dr. Cr.
Nbs/!42 Up!Mjrvjebups!pg!Nppo!Mue/!B0d 9-28-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Nppo!Mue/!bt!qfs!bhsffnfou*
Dvssfou!Bttfut!B0d Es/ 3-11-111
Hppexjmm!B0d!)Cbmbodjoh!gjhvsf* Es/ 28-111
Up!8&!Efcfouvsft!jo!Tvo!Mue/!B0d 2-11-111
Up!Mpbo!gspn!Tvo!Mue/!B0d 41-111
Up!Puifs!Mjbcjmjujft!B0d 81-111
)Cfjoh!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs/!Uif!ejggfsfodf!cfuxffo!uif!ofu!bttfut!ublfo
pwfs!boe!qvsdibtf!dpotjefsbujpo!qbje!usbotgfssfe!up!Hppexjmm!Bddpvou*
Mjrvjebups!pg!Nppo!Mue/!B0d Es/ 8-39-111
Up!Frvjuz!Tibsf!Dbqjubm!B0d 5-:1-111
Up!Tfdvsjujft!Qsfnjvn!B0d!)!:9-111!,!6-111* 2-14-111
Up!Cbol!B0d 46-111
)Cfjoh!uif!jttvf!pg!5:-111!frvjuz!tibsft!pg!!21!fbdi!bu!b!qsfnjvn!pg!31&!boe!jttvf!pg!2-111-
7&!qsfgfsfodf!tibsft!pg!!211!fbdi!bu!b!qsfnjvn!pg!6&!boe!qbznfou!pg!dbti!up!uif!mjrvjebups
pg!Nppo!Mue/!up!tbujtgz!uif!qvsdibtf!dpotjefsbujpo*
Up!Cbol!B0d 21-111
)Cfjoh!uif!mjrvjebujpo!fyqfotft!pg!Nppo!Mue/!qbje*
Mjrvjebups!pg!Nppo!Mue/!B0d Es/ 9:-111
Up!Jowftunfou!B0d!)Tibsft!jo!Nppo!Mue/* 71-111
Up!Hppexjmm!B0d!)!28-111!,!21-111* 38-111
)Cfjoh!uif!jowftunfou!jo!uif!tibsft!pg!Nppo!Mue/!tfu.pgg!boe!uif!ejggfsfodf!cfuxffo!uif!cppl
wbmvf!pg!jowftunfou!boe!tfu.pgg!wbmvf!bekvtufe!bhbjotu!hppexjmm*
8&!Efcfouvsft!jo!Nppo!Mue/!B0d Es/ 2-11-111

Qsfnjvn!po!Sfefnqujpo!pg!Efcfouvsft!B0d Es/ 9-111
Up!Efcfouvsfipmefst!pg!Nppo!Mue/!B0d 2-19-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!efcfouvsfipmefst!pg!Nppo!Mue/*
Efcfouvsfipmefst!pg!Nppo!Mue/!B0d Es/ 2-19-111
Ejtdpvou!po!Jttvf!pg!Efcfouvsft!B0d Es/ 23-111
)Cfjoh!uif!jttvf!pg!2-311-!8&!efcfouvsft!pg!!211!fbdi!bu!b!ejtdpvou!pg!21&*
Tfdvsjujft!Qsfnjvn!B0d!)Opuf!2* Es/ 31-111
Up!Qsfnjvn!po!Sfefnqujpo!pg!Efcfouvsft!B0d 9-111
Up!Ejtdpvou!po!Jttvf!pg!Efcfouvsft!B0d 23-111
)Cfjoh!uif!bekvtunfou!pg!qsfnjvn!qbje!po!sfefnqujpo!pg!efcfouvsft!boe!ejtdpvou!po!jttvf!pg
efcfouvsft!bhbjotu!Tfdvsjujft!Qsfnjvn!Bddpvou*
Mpbo!gspn!Tvo!Mue/!B0d Es/ 41-111
Up!Mpbo!up!Nppo!Mue/!B0d 41-111
)Cfjoh!bekvtunfou!gps!nvuvbm!joefcufeoftt*
Xpsljoh!Opuf!;!)2*!Qsfnjvn!po!sfefnqujpo!pg!efcfouvsft!boe!ejtdpvou!po!jttvf!pg!efcfouvsft!ibwf!cffo!bekvtufe!bhbjotu!Tfdvsjujft
Qsfnjvn!Bddpvou!bt!qfs!uif!Qspwjtjpo!pg!Tfdujpo!63!pg!uif!Dpnqbojft!Bdu-!3124/
Sun Ltd
Balance Sheet as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm )2* 26-:1-111
)b*!Usbef!Qbzbcmft )5* 4-31-111
UPUBM 33-66-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
UPUBM 33-66-611
Notes to Accounts :
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! 8&!Efcfouvsft 2-31-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )5*!Puifs!Dvssfou!Mjbcjmjujft 4-31-111
::-111!Frvjuz!Tibsft!pg!!211!fbdi!gvmmz!qbje :-:1-111 )6*!Gjyfe!Bttfut
7-111-!7&!Qsfgfsfodf!Tibsft!pg!!211!fbdi 7-11-111 Ubohjcmf!Bttfut!;
)Pg!uif!bcpwf!tibsft!5:-111!frvjuz!tibsft!boe Mboe!boe!Cvjmejoh 27-11-111
2-111!qsfgfsfodf!tibsft!ibwf!cffo!jttvfe!gps! )7*!Puifs!Dvssfou!Bttfut 7-66-111
dpotjefsbujpo!puifs!uibo!dbti*
26-:1-111
Dbqjubm!Sftfswf! 3-111
Tfdvsjujft!Qsfnjvn!)!2-14-111!Ï!31-111* 94-111
Jowftunfou!Bmmpxbodf!Sftfswf 2-51-111
3-36-111
Illustration 28
Uif!gpmmpxjoh!jt!uif!tvnnbsjtfe!Cbmbodf!Tiffu!pg!B!Mue/!bt!po!42/4/3129!;
Balance Sheet of A Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Sftfswft!boe!Tvsqmvt!Ð Sftfswf 6-11-111
)b*!Fyufsobm!Mjbcjmjujft 23-11-111
UPUBM 2:-91-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut 2:-91-111
UPUBM 2:-91-111
Bu!42/4/3127-!bttfut!pg!C!Mue/!bnpvou!up!!51-11-111!)jodmvejoh!4-111!frvjuz!tibsft!jttvfe!cz!B!Mue/!bu!b!qsfnjvn!pg
261&*!boe!fyufsobm!mjbcjmjujft!bhhsfhbuf!up!!26-11-111!boe!hfofsbm!sftfswf!!6-11-111/
Po!2/5/3129-!C!Mue/!bctpsct!B!Mue/!Gps!uif!qvsqptf!pg!bctpsqujpo!uif!wbmvf!pg!fbdi!tibsf!pg!B!Mue/!xjmm!cf!!4:!fbdi/
Qbtt!uif!ofdfttbsz!kpvsobm!fousjft!jo!uif!cpplt!pg!C!Mue/!boe!tipx!uif!tvnnbsjtfe!qptu.bdrvjtjujpo!Cbmbodf!Tiffu/
Bttvnf!uibu!C!Mue/!jnnfejbufmz!tfuumft!B!Mue/Ôt!bddpvou!cz!jttvjoh!26&!efcfouvsft/
Solution
Jo!uijt!qspcmfn-!uif!Cbmbodf!Tiffu!pg!C!Mue/!cfgpsf!bctpsqujpo!jt!opu!hjwfo/!Uifsfgpsf-!ju!jt!ofdfttbsz!up!qsfqbsf!uif!Cbmbodf!Tiffu!gspn!uif!hjwfo
jogpsnbujpo/
Balance Sheet of B Ltd.
Mjbcjmjujft Bttfut
Tibsf!Dbqjubm!)Cbmbodjoh!gjhvsf* 31-11-111 Tvoesz!Bttfut!)!51-11-111!Ï!!86-111* 4:-36-111
Hfofsbm!Sftfswf 6-11-111 Jowftunfout!Ð!Tibsft!jo!B!Mue/!\4-111!y!!)21!Ï!!26*^ 86-111
Fyufsobm!Mjbcjmjujft 26-11-111
51-11-111 51-11-111
Calculation of Purchase Consideration

Upubm!qvsdibtf!dpotjefsbujpo!>!31-111!y!!4:!>!!8-91-111/!C!Mue/!ipmet!4-111!tibsft!pg!B!Mue/!)pvu!pg!31-111!tibsft*/!Po!mjrvjebujpo!pg!B!Mue/-!uif
bnpvou!pg!qvsdibtf!dpotjefsbujpo!qbzbcmf!up!pvutjef!tibsfipmefst!>!!8-91-111!y!28-111!0!31-111!>!!7-74-111/
Ju!jt!bo!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf!cfdbvtf!uif!qvsdibtf!dpotjefsbujpo!xjmm!opu!cf!tbujtgjfe!cz!jttvf!pg!tibsft!cvu!cz
jttvf!pg!26&!efcfouvsft/!Uifsfgpsf-!qvsdibtf!nfuipe!pg!bddpvoujoh!gps!bnbmhbnbujpo!ibt!up!cf!bepqufe/

Journal Dr. Cr.
Bqsjm!2 Up!Mjrvjebups!pg!B!Mue/!B0d 8-91-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!B!Mue/!bt!qfs!bhsffnfou!ebufe!/!/!/*
Tvoesz!Bttfut!B0d Es/ 2:-91-111
Up!Fyufsobm!Mjbcjmjujft!B0d 23-11-111
Up!Cvtjoftt!Qvsdibtf/!B0d 8-91-111
)Cfjoh!ejggfsfou!bttfut!ublfo!pwfs!gspn!B!Mue/*
Mjrvjebups!pg!B!Mue/!B0d!)!8-91-111!Ï!7-74-111* Es/ 2-28-111
Up!Jowftunfout!B0d 86-111
)Cfjoh!uif!tibsft!jo!B!Mue/!tvssfoefsfe!up!uif!mjrvjebups!pg!B!Mue/!Ð!uif!ejggfsfodf!jt!usbotgfssfe
up!Dbqjubm!Sftfswf*
Mjrvjebups!pg!B!Mue/B0d Es/ 7-741511
)Cfjoh!uif!jttvf!pg!efcfouvsft!up!uif!mjrvjebups!pg!B!Mue/!gps!qbznfou!up!pvutjef!tibsfipmefst*
B Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Puifs!Dvssfou!Mjbcjmjujft!Ð!Fyufsobm!Mjbcjmjujft )5* 38-11-111
UPUBM 6:-16-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut Ð
! ! ! ! ! )j*! !Ubohjcmf!Bttfut )6* 6:-16-111
UPUBM 6:-16-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm )4*!Mpoh.Ufsn!Cpsspxjoht
///!Frvjuz!Tibsft!pg!!///!fbdi @! ! ! ! ! 26&!Efcfouvsft 7-74-111
Jttvfe!boe!Tvctdsjcfe!Dbqjubm!; )5*!Puifs!Dvssfou!Mjbcjmjujft
3-11-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 31-11-111 Fyufsobm!Mjbcjmjujft 38-11-111
)3*!Sftfswf!boe!Tvsqmvt )6*!Gjyfe!Bttfut
Dbqjubm!Sftfswf!! 53-111 Ubohjcmf!Bttfut!;
Hfofsbm!Sftfswf 6-11-111 Tvoesz!Bttfut!)!4:-36-111!,!2:-91-111* 6:-16-111
6-53-111
Illustration 29
Y!Mue/!ibe!bdrvjsfe-!bt!b!dvssfou!bttfu-!:-111!tibsft!jo!Z!Mue/-!gps!!:1-111!po!2tu!Opwfncfs-!3121/!Po!2tu!Bqsjm-!3129!ju
bhsffe!up!bctpsc!Z!Mue/-!uif!dpotjefsbujpo!cfjoh!Ð
)j* Uif!bttvnqujpo!pg!jut!mjbcjmjujft/
)jj* Uif! ejtdibshf! pg! ! 71-111! efcfouvsft! ifme! pvutjef! uif! dpnqboz! bu! b! qsfnjvn! pg! 21&! cz! uif!jttvf!pg!26&
efcfouvsft!jo!Y!Mue/!dbsszjoh!b!gvmm!tjy!npouitÔ!joufsftu!qbzbcmf!po!2tu!Pdupcfs-!3129/!
)jjj* B!qbznfou!jo!dbti!pg!!6!qfs!tibsf!jo!Z!Mue/
)jw* Uif!jttvf!pg!tibsft!pg!!21!fbdi!jo!Y!Mue/-!dsfejufe!bt!gvmmz!qbje<!up!uif!nfncfst!pg!Z!Mue/-!po!uif!cbtjt!pg!uxp
frvjuz!tibsft!)wbmvfe!bu!!27!fbdi*!boe!pof!26&!sfeffnbcmf!qsfgfsfodf!tibsf!)wbmvfe!bu!!22!fbdi*!gps!gjwf!tibsft
ifme!jo!Z!Mue/
Uif!tvnnbsjtfe!Cbmbodf!Tiffu!pg!Z!Mue/!bt!po!42tu!Nbsdi-!3129!xbt!bt!gpmmpxt!;
Balance Sheet of Y Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!35-111!Frvjuz!Tibsft!pg!!21!fbdi-!!8/61!qfs!tibsf!qbje 2-91-111
)c*!Sftfswft!boe!Tvsqmvt!; 2-23-611
Hfofsbm!Sftfswf 56-111
Jotvsbodf!Gvoe!)Tff!Opuf*
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!23&!Efcfouvsft 78-611
)c*!Usbef!Qbzbcmft!Ð!Dsfejupst 31-111
UPUBM 5-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!;
Mboe 2-16-111
Cvjmejoh 61-111
Qmbou 71-111
! ! ! ! ! ! )jj*!!!Joubohjcmf!bttfut!Ð!Hppexjmm 39-111
)c*!Opo.dvssfou!jowftunfout!;
Jotvsbodf!Gvoe! 36-111
HfofsbÐ23&!Efcfouvsft!jo!Z!Mue/m!)!8-611*! 8-111
)c*!Usbef!Sfdfjwbcmft!Ð!Efcupst 61-111
)d*!Dbti!boe!Dbti!Frvjwbmfout!Ð!Dbti!bu!Cbol 36-111
UPUBM 5-61-111
Opuf!;!Uif!dpnqboz!ibe!cffo!dbsszjoh!jut!pxo!jotvsbodf!sjtl!dsfejujoh!bnpvou!frvjwbmfou!up!qsfnjvn!up!uif!Gvoe!boe!dibshjoh!mpttft
uifsfup/
Ju!xbt!bhsffe!uibu!gps!bctpsqujpo!qvsqptft-!6&!tipvme!cf!xsjuufo!pgg!tupdl!boe!6&!qspwjtjpo!gps!epvcugvm!efcut/!Uif
sfnbjojoh!bttfut-!puifs!uibo!hppexjmm-!bsf!dpotjefsfe!up!cf!qspqfsmz!wbmvfe!gps!uif!qvsqptf!pg!bctpsqujpo/
Uif!bctpsqujpo!xbt!dpnqmfufe!po!2tu!Kvof-!3129!cz!uif!jttvf!pg!ofdfttbsz!tibsft!boe!efcfouvsft!jo!Y!Mue/!boe!qbznfou
pg!dbti/!Z!Mue/!xbt!uifsfpo!xpvoe!vq!boe!ejtusjcvujpo!pg!jut!bttfut!nbef!up!jut!nfncfst/!Fyqfotft!!3-111!jo!uijt!dpoofdujpo
qbje!cz!Y!Mue/
Zpv!bsf!sfrvjsfe!up!esbgu!uif!kpvsobm!fousjft!)jodmvejoh!dbti!jufnt*!jo!uif!cpplt!pg!Z!Mue/!boe!jo!uif!cpplt!pg!Y!Mue/

Qbsujdvmbst
Frvjuz!Tibsfipmefst!;
)b*!Dbti!\35-111!y!!6^ 2-31-111
)c*!Frvjuz!Tibsft!\35-111!y!306!y!!27^ 2-64-711
)d*!Qsfgfsfodf!Tibsft!\35-111!y!206!y!!22^ 63-911
Qvsdibtf!Dpotjefsbujpo!up!cf!qbje!cz!Y!Mue/
)b*!Jo!dbti!\26035!pg!!2-31-111^ 86-111
)c*!Jo!Frvjuz!Tibsft!\26035!pg!!2-64-711^ :7-111
)d*!Jo!26&!Sfeffnbcmf!Qsfgfsfodf!Tibsft!\26035!pg!!63-911^ 44-111
3-15-111
Journal Dr. Cr.
Bqsjm!2 Up!Mboe!B0d 2-16-111
Up!Cvjmejoh!B0d 61-111
Up!Qmbou!B0d 71-111
Up!Cbol!B0d 36-111
Up!Jowftunfout!B0d!)Jotvsbodf!Gvoe* 36-111
Up!Hppexjmm!B0d 39-111
)Cfjoh!ejggfsfou!bttfut!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!bt!qfs!tdifnf!pg!bctpsqujpo*
23&!Efcfouvsft!B0d!)!78-611!Ï!8-611* Es/ 71-111
)Cfjoh!ejggfsfou!mjbcjmjujft!usbotgfssfe!up!Sfbmjtbujpo!Bddpvou!bt!qfs!tdifnf!pg!sfdpotusvdujpo*
Y!Mue/!B0d Es/ 4-37-511
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!Y!Mue/!bt!qfs!bhsffnfou*
23&!Efcfouvsft!B0d Es/ 8-611
Up!Jowftunfou!jo!Pxo!Efcfouvsft!B0d 8-111
Up!Sfbmjtbujpo!B0d 611
)Cfjoh!uif!dbodfmmbujpo!pg!pxo!efcfouvsft/!Uif!qspgju!po!dbodfmmbujpo!usbotgfssfe!up!Sfbmjtbujpo
Bddpvou*
Frvjuz!Tibsft!jo!Y!Mue/!B0d Es/ :7-111
26&!Sfeffnbcmf!Qsfgfsfodf!Tibsft!jo!Y!Mue/!B0d Es/ 44-111
Dbti!B0d Es/ 86-111
Up!Y!Mue/!B0d 3-15-111
)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!sfdfjwfe!gspn!Y!Mue/!jo!uif!gpsn!pg!7-111!frvjuz!tibsft!pg!
!21!fbdi!gvmmz!qbje!jttvfe!bu!b!qsfnjvn!pg!!7!qfs!tibsf!boe!4-111-!26&!sfeffnbcmf
qsfgfsfodf!tibsft!pg!!21!fbdi!gvmmz!qbje!jttvfe!bu!b!qsfnjvn!pg!Sf!2!qfs!tibsf!boe!dbti!
!86-111*
Npefso!Bddpvoubodz - II!!!31/::

Jotvsbodf!Gvoe!B0d Es/ 36-111
)Cfjoh!uif!bnpvou!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
Up!Frvjuz!Tibsft!jo!Y!Mue/!B0d :7-111
Up!26&!Sfeffnbcmf!Qsfgfsfodf!Tibsft!jo!Y!Mue/!B0d 44-111
Up!Dbti!B0d 86-111
)Cfjoh!uif!ejtusjcvujpo!pg!tibsft!boe!dbti!bnpohtu!uif!pvutjef!tibsfipmefst*
Up!Y!Mue/!B0d 2-33-511
)Cfjoh!uif!tfu.pgg!gps!:-111!tibsft!ifme!cz!Y!Mue/!jo!Z!Mue/*
Working Note :
Up!Mboe!B0d 2-16-111 Cz!23&!Efcfouvsft!B0d 71-111
Up!Cvjmejoh!B0d 61-111 Cz!Dsfejupst!B0d 31-111
Up!Qmbou!B0d 71-111 Cz!Y!Mue/!B0d 4-37-511
Up!Jowfoupsjft!B0d 2-11-111 Cz!23&!Efcfouvsft!B0d 611
Up!Efcupst!B0d 61-111 Cz!Tvoesz!Tibsfipmefst!B0d 47-211
Up!Cbol!B0d 36-111
Up!Jowftunfout!B0d!)Jotvsbodf!Gvoe* 36-111
Up!Hppexjmm!Bd 39-111
5-54-111 5-54-111
Ju!jt!bo!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf!cfdbvtf!bmm!bttfut!boe!mjbcjmjujft!xjmm!opu!cf!ublfo!pwfs
bu! cppl! wbmvf! boe! qvsdibtf! dpotjefsbujpo! xjmm! opu! cf! tbujtgjfe! upubmmz! cz! jttvf! pg! tibsft/! Uifsfgpsf-
qvsdibtf!nfuipe!pg!bddpvoujoh!gps!bnbmhbnbujpo!jt!up!cf!bepqufe/
In the books of X Ltd.
Journal Dr. Cr.
Bqsjm!2 Up!Mjrvjebups!pg!Z!Mue/!B0d 4-37-511
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Z!Mue/!bt!qfs!bhsffnfou!ebufe!/!/!/*
Mboe!B0d Es/ 2-16-111
Cvjmejoh!B0d Es/ 61-111
Qmbou!B0d Es/ 71-111
Jowfoupsjft!B0d Es/ :6-111
Jowftunfou!B0d!)Jotvsbodf!Gvoe* Es/ 36-111
Hppexjmm!B0d!)Cbmbodjoh!gjhvsf* Es/ 34-:11
Up!23&!Efcfouvsft!jo!Z!Mue/!B0d 71-111
Up!Qspwjtjpo!gps!Cbe!Efcut!B0d 3-611
)Cfjoh!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!bu!bhsffe!wbmvf!bt!qfs!uif!tdifnf!pg
bnbmhbnbujpo/!Uif!ejggfsfou!cfuxffo!uif!ofu!bttfut!ublfo!pwfs!boe!qvsdibtf!dpotjefsbujpo
qbje!usbotgfssfe!up!Hppexjmm!Bddpvou*
Up!Cbol!B0d 3-111
)Cfjoh!mjrvjebujpo!fyqfotft!qbje*
Kvof!2 23&!Efcfouvsft!jo!Z!Mue/!B0d Es/ 71-111

Qsfnjvn!po!Sfefnqujpo!pg!Efcfouvsft!B0d Es/ 7-111
Up!Efcfouvsfipmefst!B0d 77-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!efcfouvsfipmefst!pg!Z!Mue/*
Efcfouvsfipmefst!B0d Es/ 77-111
)Cfjoh!uif!jttvf!pg!ofdfttbsz!efcfouvsft!jo!Y!Mue/*
Up!26&!Sfeffnbcmf!Qsfgfsfodf!Dbqjubm!B0d 41-111
Up!Tfdvsjujft!Qsfnjvn!B0d!)!47-111!,!4-111* 4:-111
Up!Dbti!B0d 86-111
)Cfjoh!uif!jttvf!pg!7-111!frvjuz!tibsft!pg!!21!fbdi!gvmmz!qbje!bu!b!qsfnjvn!pg!!7!qfs!tibsf
boe!jttvf!pg!4-111-!26&!sfeffnbcmf!qsfgfsfodf!tibsft!pg!!21!fbdi!gvmmz!qbje!bu!b!qsfnjvn!pg
!2!fbdi!boe!cbmbodf!qbje!jo!dbti*
Tfdvsjujft!Qsfnjvn!B0d Es/ 7-111
Up!Qsfnjvn!po!Sfefnqujpo!pg!Efcfouvsft!B0d 7-111
)Cfjoh!uif!qsfnjvn!po!sfefnqujpo!pg!efcfouvsft!bekvtufe!bhbjotu!uif!Tfdvsjujft!Qsfnjvn!Bddpvou*
Up!Jowftunfou!jo!Z!Mue/!B0d :1-111
Up!Hppexjmm!B0d 36-:11
)Cfjoh!uif!jowftunfou!jo!uif!tibsft!pg!Z!Mue/!tfu.pgg!boe!uif!ejggfsfodf!cfuxffo!uif!cppl!wbmvf
pg!jowftunfou!boe!tfu.pgg!wbmvf!bekvtufe!bhbjotu!hppexjmm!boe!dbqjubm!!sftfswf*
Situation 3 : Transferor Company holding some Shares of Transferee Company

Uif!usbotgfsps!dpnqboz!nbz!ipme!tpnf!tibsft!pg!uif!usbotgfsff!dpnqboz/!Bu!uif!ujnf!pg!bnbmhbnbujpo-!uiftf
tibsft!dboopu!cf!ublfo!pwfs!bmpoh!xjui!puifs!bttfut!cz!uif!usbotgfsff!dpnqboz/!Uiftf!tibsft!xjmm!sfnbjo!jo!uif
iboet!pg!uif!mjrvjebups!pg!uif!usbotgfsps!dpnqboz/!Xifo!uif!usbotgfsff!dpnqboz!xjmm!jttvf!jut!pxo!tibsf!bhbjotu
qvsdibtf!dpotjefsbujpo-!uif!tibsft!bmsfbez!ifme!cz!uif!mjrvjebups!xjmm!cf!efevdufe!gspn!uif!upubm!ovncfs!pg
tibsft! up! cf! jttvfe/! Ofx! tibsft! jttvfe! qmvt! tibsft! bmsfbez! jo! iboe! bsf! ejtusjcvufe! bnpohtu! tibsfipmefst/
Efcfouvsft!ifme!cz!uif!usbotgfsps!dpnqboz!jo!uif!usbotgfsff!dpnqboz!bsf!bmtp!tjnjmbsmz!usfbufe/
Uif!dptu!pg!tibsft!ifme!cz!uif!usbotgfsps!dpnqboz!cz!xbz!pg!jowftunfou!nbz!cf!ejggfsfou!gspn!uif!wbmvbujpot
bu!xijdi!uifz!bsf!opx!cfjoh!jttvfe/!Jo!tvdi!b!tjuvbujpo-!uif!fyjtujoh!tibsft!bsf!up!cf!bekvtufe!cz!sfwbmvbujpo!up
tbnf!wbmvft!bu!xijdi!uifz!bsf!jttvfe!bu!qsftfou/!
Uif!fousz!xjmm!cf!;
(i) If revalued at a higher price
Jowftunfou!jo!Tibsft!pg!Usbotgfsff!Dpnqboz!Bddpvou Es/
(ii) If revalued at a lower price
! ! ! Up!Jowftunfou!jo!Tibsft!pg!Usbotgfsff!Dpnqboz!Bddpvou
Illustration 30
B!Mue/!bctpsct!C!Mue/!po!2tu!Bqsjm-!3129!cz!qbznfou!pg!7!tibsft!pg!!21!fbdi!gps!fwfsz!6!tibsft!pg!C!Mue/!Uifjs!Cbmbodf
Tiffut!bt!bu!42tu!Nbsdi-!3129-!bsf!bt!gpmmpxt!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)c*!Sftfswft!boe!Tvsqmvt!Ð!Sftfswf 91-111 51-111
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 7-11-111 71-111
UPUBM 8-51-111 4-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou!boe!Nbdijofsz 7-11-111 3-11-111
)c*!Opo.dvssfou!jowftunfout!Ð!5-111!Frvjuz!Tibsft!pg!B!Mue/ Ð 51-111
)b*!Puifs!Dvssfou!Bttfut 2-51-111 71-111
UPUBM 8-51-111 4-11-111
Tipx!Mfehfs!Bddpvout!jo!uif!cpplt!pg!C!Mue/!Qbtt!kpvsobm!fousjft!jo!uif!cpplt!pg!B!Mue/!boe!qsfqbsf!uif!Cbmbodf!Tiffu
bgufs!bnbmhbnbujpo/!)Bttvnf!bnbmhbnbujpo!jo!uif!obuvsf!pg!qvsdibtf/*
Qbsujdvmbst
Ovncfs!pg!tibsft!sfrvjsfe!)31-111!0!6!y!7* 35-111
Mftt;!Bmsfbez!jo!iboe 5-111
Ofx!tibsft!up!cf!jttvfe 31-111
31-111!tibsft!A!!21!fbdi!>!!3-11-111*

3129 Up!Qmbou!boe!Nbdijofsz!B0d 3-11-111 3129 Cz!Tvoesz!Dsfejupst!B0d 71-111
Bqs/!2 Up!Dvssfou!Bttfut!B0d 71-111 Bqs/!2 Cz!B!Mue/!B0d 3-11-111
3-71-111 3-71-111
Dr. Investment Account (Shares in A Ltd.) Cr.

3129 Up!Cbmbodf!c0e!;!5-111!tibsft 51-111 3129 Cz!Tvoesz!Frvjuz!Tibsfipmefst!B0d 3-51-111
Bqs/!2 Up!B!Mue/!B0d!;!31-111!tibsft 3-11-111 Bqs/!2
3-51-111 3-51-111

3129 Up!Jowftunfou!B0d 3-51-111 3129 Cz!Frvjuz!Tibsf!Dbqjubm!B0d 3-11-111
Bqs/!2 Bqs/!2 Cz!Sftfswf!B0d 51-111
3-51-111 3-51-111
Bt!ju!jt!bo!Bnbmhbnbujpo!jo!uif!Obuvsf!pg!Qvsdibtf-!!uif!qvsdibtf!nfuipe!pg!bddpvoujoh!gps!bnbmhbnb.
ujpo!jt!up!cf!bepqufe/
Journal Dr. Cr.
Bqs/!2 Up!Mjrvjebups!pg!C!Mue/!B0d 3-11-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!C!Mue/!bt!qfs!bhsffnfou!ebufe!/!/!/*
Qmbou!boe!Nbdijofsz!!B0d Es/ 3-11-111

Dvssfou!Bttfut!B0d Es/ 71-111
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs*
Mjrvjebups!pg!C!Mue/!B0d Es/ 3-11-111
)Cfjoh!uif!jttvf!pg!31-111!tibsft!up!uif!mjrvjebups!pg!C!Mue/!jo!tbujtgbdujpo!pg!qvsdibtf!dpotjefsbujpo*
A Ltd
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
UPUBM 21-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
UPUBM 21-11-111
Notes to Accounts :
Bvuipsjtfe!Dbqjubm!; Tvoesz!Dsfejupst 2-31-111
91-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 9-11-111 Qmbou!boe!Nbdijofsz 9-11-111
)Pg!uif!bcpwf!tibsft!31-111!frvjuz!tibsft!ibwf!cffo )6*!Puifs!Dvssfou!Bttfut 3-11-111
jttvfe!gps!dpotjefsbujpo!puifs!uibo!dbti*
Sftfswf! 91-111
Illustration 31
Tbe!Mjnjufe!qsftfout!uif!gpmmpxjoh!tvnnbsjtfe!Cbmbodf!Tiffu!bt!po!42tu!Nbsdi-!3129!;
Balance Sheet of Sad Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!21!fbdi 23-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt!Bddpvou )4-86-111*
)b*!Mpoh.ufsn!Cpsspxjoht!Ð!6&!Efcfouvsft 8-61-111
)d*!Puifs!Dvssfou!Mjbcjmjujft!Ð!Bddsvfe!Joufsftu 48-611
UPUBM 31-51-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut! 23-86-111
)b*!Puifs!Dvssfou!Bttfut 8-76-111
UPUBM 31-51-111
Uif!dpnqboz!jt!bctpscfe!cz!Qpps!Mue/!xip!ipmet!36&!pg!tibsf!dbqjubm!)qvsdibtfe!cz!uifn!gps!!3-11-111*/!Bmm!bttfut
boe!mjbcjmjujft!bsf!ublfo!pwfs!bu!cppl!wbmvf-!tvckfdu!up!Gjyfe!Bttfut!sfwbmvfe!bu!!21-61-111/!
Uif!qbznfout!up!puifs!tibsfipmefst!up!cf!nbef!cz!uif!jttvf!pg!frvjuz!tibsft!pg!!26!fbdi!bu!qbs!pg!Qpps!Mue/!Gps!uif
qvsqptf!pg!bctpsqujpo!fbdi!tibsf!pg!Tbe!Mue/!fbdi!xpsui!!6/!
Tipx!uif!fousjft!jo!uif!cpplt!pg!Tbe!Mue/!boe!bdrvjtjujpo!fousjft!jo!uif!cpplt!pg!Qpps!Mue/
Solution Purchase Consideration
Wbmvf!pg!tibsft!pg!Tbe!Mue/!>!!23-11-111!0!!21!y!!6 7-11-111
Wbmvf!pg!tibsft!ifme!cz!Qpps!Mue/!)205* 2-61-111
Wbmvft!pg!tibsft!ifme!cz!pvutjefst 5-61-111
Ovncfs!pg!tibsft!up!cf!jttvfe!cz!Qpps!Mue/!>!!5-61-111!0!!26!>!41-111!tibsft
In the books of Sad Ltd.
Journal Dr. Cr.
Nbs/!42 Up!Gjyfe!Bttfut!B0d 23-86-111
Up!Dvssfou!Bttfut!B0d 8-76-111
bnbmhbnbujpo*
6&!Efcfouvsft!B0d Es/ 8-61-111
Bddsvfe!Joufsftu!B0d Es/ 48-611
)Cfjoh!uif!usbotgfs!pg!ejggfsfou!mjbcjmjujft!up!Sfbmjtbujpo!Bddpvou!bt!qfs!uif!tdifnf!pg
bnbmhbnbujpo*
Qpps!Mue/!B0d Es/ 7-11-111

)Cfjoh!uif!qvsdibtf!dpotjefsbujpo!evf!gspn!Qpps!Mue/*
)Cfjoh!uif!usbotgfs!pg!tibsf!dbqjubm!up!Tvoesz!Tibsfipmefst!Bddpvou*
)Cfjoh!uif!efcju!cbmbodf!pg!Qspgju!boe!Mptt!Bddpvou!usbotgfssfe!up!Tvoesz!Tibsfipmefst!Bddpvou*
Tvoesz!Tibsfipmefst!B0d!)Opuf!2* Es/ 3-36-111
Tibsft!jo!Qpps!Mue/!B0d Es/ 5-61-111
Up!Qpps!Mue/!B0d 5-61-111
)Cfjoh!uif!sfdfjqu!pg!41-111!tibsft!A!!26!fbdi!gps!qbznfou!up!pvutjef!tibsfipmefst*
Up!Tibsft!jo!Qpps!Mue/!B0d 5-61-111
)Cfjoh!uif!qbznfou!pg!tibsft!up!uif!pvutjef!tibsfipmefst*
Up!Qpps!Mue/!B0d 2-61-111
)Cfjoh!uif!bekvtunfou!pg!36&!tibsft!ifme!cz!Qpps!Mue/*
In the books of Poor Ltd.
Journal Dr. Cr.
Nbs/!42 Up!Mjrvjebups!pg!Tbe!Mue/!B0d 7-11-111
)Cfjoh!uif!bnpvou!qbzbcmf!up!uif!mjrvjebups!pg!Tbe!Mue/!bt!qfs!bhsffnfou!ebufe!/!/!/*
Gjyfe!Bttfut!B0d Es/ 21-61-111
Dvssfou!Bttfut!B0d Es/ 8-76-111
Up!Bddsvfe!Joufsftu!B0d 48-611
)Cfjoh!uif!ejggfsfou!bttfut!boe!mjbcjmjujft!ublfo!pwfs!bu!bhsffe!wbmvf*
Mjrvjebups!pg!Tbe!Mue/!B0d Es/ 5-61-111
)Cfjoh!uif!jttvf!pg!ofdfttbsz!tibsft!up!qbz!pgg!uif!pvutjef!tibsfipmefst*
Mjrvjebups!pg!Tbe!Mue/!B0d Es/ 2-61-111
Hppexjmm!B0d!)Cbmbodjoh!gjhvsf*! Es/ 61-111
Up!Jowftunfou!jo!Tbe!Mue/!B0d 3-11-111
)Cfjoh!uif!tibsft!jo!Tbe!Mue/!tvssfoefsfe!up!uif!mjrvjebups!pg!Tbe!Mue/!Uif!ejggfsfodf!jt
usbotgfssfe!up!Hppexjmm!Bddpvou*
Uvupsjbm!Opuf!;!Ju!jt!bo!bnbmhbnbujpo!jo!uif!obuvsf!pg!qvsdibtf!cfdbvtf!bmm!bttfut!bsf!opu!ublfo!pwfs!bu!cppl!wbmvf/!Uifsfgpsf-!qvsdibtf
nfuipe!pg!bddpvoujoh!gps!bnbmhbnbujpo!jt!up!cf!bepqufe/
Working Note :
Up!Gjyfe!Bttfut!B0d 23-86-111 Cz!6&!Efcfouvsft!B0d 8-61-111
Up!Dvssfou!Bttfut!B0d 8-76-111 Cz!Bddsvfe!Joufsftu!B0d 48-611
Cz!Dsfejupst!B0d 5-38-611
Cz!Qpps!Mue/!B0d 7-11-111
Cz!Tvoesz!Tibsfipmefst!B0d 3-36-111
31-51-111 31-51-111
Key Points
Bnbmhbnbujpo!jt!bo!fwfou!ps!usbotbdujpo!jo!xijdi!uxp!ps!npsf!dpnqbojft-!ps!uifjs!ofu!bttfut-!bsf!cspvhiu!voefs
dpnnpo!dpouspm!jo!b!tjohmf!mfhbm!foujuz/!Uif!dpodfqu!pg!dpouspm!sfmbuft!up!uif!bcjmjuz!up!ejdubuf!pqfsbujoh!boe!gjobodjbm
qpmjdjft/
Uif!nbjo!npujwft!gps!bnbmhbnbujpot!bsf!;
!)2*!Fdpopnjft!pg!Tdbmf!Ð!Uif!bnbmhbnbufe!dpnqboz!dbo!ibwf!pqfsbujoh!dptu!bewboubhf-!jo!fggfdu-!mpxfs!bwfsbhf
dptu!pg!qspevdujpo/!
)3*!Gjobodjbm!Fdpopnjft!Ð!Gjobodjbm!fdpopnjft!dbo!cf!jo!uif!gpsn!pg!uby.bewboubhf-!ijhifs!efcu!dbqbdjuz!boe!mpxfs
sbuft!pg!cpsspxjoh-!mftt!gmpubujpo!pg!tibsft!boe!efcfouvsft-!fud/!
)4*!Hspxui!Ð!Joufsobm!hspxui!jt!ujnf!dpotvnjoh/!Ju!dbo!bmtp!qsfwfou!b!dpnqfujups!gspn!ftubcmjtijoh!b!tjnjmbs!qptjujpo
jo!uibu!joevtusz/!Jo!b!tbuvsbufe!nbslfu-!bnbmhbnbujpo!nblft!npsf!tfotf!uibo!dsfbujpo!pg!beejujpobm!qspevdujpo!dbqbdjuz
uispvhi!joufsobm!fyqbotjpo/!
)5*! Ejwfstjgjdbujpo! Ð! Jo! bo! bnbmhbnbujpo-! sjtl! pg! uif! dpnqboz! dbo! cf! mpxfsfe! cz! ejwfstjgzjoh! joup! uxp! ps! npsf
joevtusjft/!Ejwfstjgjdbujpo!jt!b!tjuvbujpo!jo!xijdi!b!dpnqboz!ublft!po!ofx!mjoft!pg!cvtjoftt-!up!sfevdf!uif!efhsff!pg!sjtl/
)6*!Nbobhfsjbm!Fggfdujwfoftt!Ð!Fggfdujwfoftt!jt!uif!efhsff!pg!buubjonfou!pg!b!qsfefufsnjofe!hpbm/!Nbobhfnfou
fggfdujwfoftt!dbo!cf!bwbjmfe!pg!uispvhi!tvqfsjps!nbobhfnfou!ubmfou!ps!b!sftfbsdi!dbqbcjmjuz/
Uif!qvsdibtf!dpotjefsbujpo!jt!efufsnjofe!bt!qfs!uif!bhsffnfou!cfuxffo!uif!dpnqbojft/!Xijmf!dbmdvmbujoh!qvsdibtf
dpotjefsbujpo-!!uif!!qspwjtjpo!!pg!!BTÐ25-!!Qbsb!4)h*!!nvtu!!cf!!ublfo!joup!dpotjefsbujpo/!Ju!efgjoft!uif!fyqsfttjpo
ÓQvsdibtf!DpotjefsbujpoÔ!bt!#uif!bhhsfhbuf!pg!uif!tibsft!boe!puifs!tfdvsjujft!jttvfe!boe!uif!qbznfou!nbef!jo!uif
gpsn!pg!dbti!ps!puifs!bttfut!cz!uif!usbotgfsff!dpnqboz!up!uif!tibsfipmefst!pg!uif!usbotgfsps!dpnqboz/#
Uifsf!bsf!uxp!nbjo!nfuipet!pg!bddpvoujoh!gps!bnbmhbnbujpot!;!)b*!Uif!Qppmjoh!pg!Joufsftut!Nfuipe<!boe!)c*!Uif
Qvsdibtf!Nfuipe/
Dibsbdufsjtujdt!pg!Qppmjoh!pg!Joufsftut!Nfuipe!;
2/ Qppmjoh!pg!joufsftut!bddpvoujoh!usfbut!bo!bnbmhbnbujpo!bt!b!Óopo.fwfouÔ-!jo!uibu!uif!dpncjojoh!dpnqbojft!bsf
wjfxfe!bt!jg!uifz!bmxbzt!ibe!cffo!uphfuifs/
3/ Uif!vojrvf!buusjcvuft!pg!qppmjoh!pg!joufsftut!bddpvoujoh!bsf!uif!dbsszgpsxbse!pg!bttfut!boe!mjbcjmjujft!bu!cppl!wbmvft
boe!uif!dbsszgpsxbse!pg!sfubjofe!fbsojoht/
4/ Voefs!qppmjoh!pg!joufsftut!bddpvoujoh-!op!hppexjmm!jt!sfdpsefe!bt!bsjtjoh!gspn!uif!bnbmhbnbujpo/
5/ Bmm!dptut!bttpdjbufe!xjui!uif!bnbmhbnbujpo!ps!xjui!jttvjoh!uif!tibsft!vtfe!jo!uif!bnbmhbnbujpo!bsf!fyqfoefe!bt
jodvssfe<!opof!pg!uif!dptut!pg!csjohjoh!bcpvu!uif!bnbmhbnbujpo!bsf!dbqjubmjtfe/
6/ Voefs!qppmjoh!pg!joufsftut!bddpvoujoh-!uif!dbsszgpsxbse!pg!sfubjofe!fbsojoht!pg!uif!bdrvjsfe!dpnqboz!nbz!hjwf
nbobhfnfou!npsf!gmfyjcjmjuz!xjui!sftqfdu!up!ejwjefoet!tvctfrvfou!up!uif!bnbmhbnbujpo/
THEORETICAL QUESTIONS
2/ Xibu!ep!zpv!nfbo!cz!bnbmhbnbujpo!@!Xibu!bsf!uif!ejggfsfou!uzqft!pg!bnbmhbnbujpo!@
3/ Xibu!bsf!uif!ejggfsfou!dpoejujpot!xijdi!nvtu!cf!tbujtgjfe!gps!usfbujoh!bo!bnbmhbnbujpo!jo!uif!obuvsf!pg!nfshfs!@
4/ Ipx!qvsdibtf!dpotjefsbujpo!jt!dbmdvmbufe!bddpsejoh!up!BTÐ25!@
5/ Ejtujohvjti!cfuxffo!qppmjoh!pg!joufsftut!nfuipe!boe!qvsdibtf!nfuipe/
6/ Xibu!bsf!uif!mjnjubujpot!pg!qppmjoh!pg!joufsftut!nfuipe!@
OBJECTIVE QUESTIONS
Multiple Choice
Tfmfdu!uif!cftu!dipjdf!up!dpnqmfuf!fbdi!tfoufodf!ps!botxfs!fbdi!rvftujpo!cfmpx;
2/ Bnbmhbnbujpo!Bekvtunfou!Bddpvou!jt!vtfe!gps!sfdpsejoh
B! ! dbqjubm!sftfswf!jo!uif!cpplt!pg!uif!usbotgfsff!dpnqboz
C! ! hfofsbm!sftfswf!jo!uif!cpplt!pg!uif!usbotgfsff!dpnqboz
D! ! tubuvupsz!sftfswf!jo!uif!cpplt!pg!uif!usbotgfsff!dpnqboz/
3/ Jowftunfou!Bmmpxbodf!Sftfswf!jt!b
B! ! dbqjubm!sftfswf
C! ! tubuvupsz!sftfswf
D! ! opof!pg!B!ps!C/
4/ Gps!dbmdvmbujoh!qvsdibtf!dpotjefsbujpo!bt!qfs!BTÐ25-
B! ! pomz!qbznfou!up!frvjuz!tibsfipmefst!bsf!up!cf!ublfo!joup!dpotjefsbujpo
C! ! pomz!qbznfou!up!tibsfipmefst!bsf!up!cf!ublfo!joup!dpotjefsbujpo
D!! ! qbznfout!up!tibsfipmefst!bt!xfmm!bt!efcfouvsfipmefst!bsf!up!cf!ublfo!joup!dpotjefsbujpo/
5/ Voefs!qppmjoh!pg!joufsftut!nfuipe-!bmm!dptut!bttpdjbufe!xjui!uif!bnbmhbnbujpo!bsf
B! ! dbqjubmjtfe
C!! ! fyqfoefe!bt!jodvssfe
D! ! opof!pg!uif!bcpwf/
6/ Jo!bo!bnbmhbnbujpo!jo!uif!obuvsf!pg!nfshfs
B! ! bmm!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!cz!uif!usbotgfsff!dpnqboz!bu!bhsffe!wbmvf
C! ! bmm!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!cz!uif!usbotgfsff!dpnqboz!bu!cppl!wbmvf
D! ! opof!pg!uif!bcpwf/
PRACTICAL QUESTIONS
Calculation of Purchase Consideration as per ASū 14
2/ B!Mue/!jt!bctpscfe!cz!C!Mue/-!uif!dpotjefsbujpo!cfjoh!uif!ublfpwfs!pg!mjbcjmjujft-!uif!qbznfou!pg!dptu!pg!bctpsqujpo!bt
qbsu!pg!qvsdibtf!dpotjefsbujpo!opu!fydffejoh!!21-111<!uif!qbznfou!pg!uif!efcfouvsft!pg!!26!mbli!bu!b!qsfnjvn!pg
21&!boe!uif!qbznfou!pg!!26!qfs!tibsf!jo!dbti!boe!bmmpunfou!pg!pof!21&!qsfgfsfodf!tibsf!pg!!21!fbdi!boe!gjwf!frvjuz
tibsft!!pg!!!21!fbdi!gvmmz!qbje!gps!fwfsz!gpvs!tibsft!jo!B!Mue/!Uif!ovncfs!pg!tibsft!pg!B!Mue/!bsf!3!mbli!pg!!21!fbdi
gvmmz!qbje/!!Dpnqvuf!uif!bnpvou!pg!dpotjefsbujpo/
3/ Po!2/5/3129-!B!Mue/!ibe!uif!gpmmpxjoh!dbqjubm!tusvduvsf!;! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
2-11-111!Frvjuz!Tibsft!pg!!21!fbdi! !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 21-11-111
21-111-!23&!Qsfgfsfodf!Tibsft!pg!!21!fbdi! !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 2-11-111
61-111-!21&!Efcfouvsft!pg!!21!fbdi! !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 6-11-111
!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 27-11-111
Po!uif!bcpwf!ebuf-!C!Mue/!bctpscfe!B!Mue/!voefs!uif!gpmmpxjoh!ufsnt!boe!dpoejujpot!;
)2* C!Mue/!xjmm!ublf!pwfs!bmm!uif!bttfut!boe!mjbcjmjujft!pg!B!Mue/!bu!cppl!wbmvf/
)3* C!Mue/!xjmm!qbz!gps!Ð
Frvjuz!tibsfipmefst!Ð!61-111!frvjuz!tibsft!pg!!21!fbdi!boe!6-111-!23&!efcfouvsft!pg!!211!fbdi/
Qsfgfsfodf!tibsfipmefst!Ð!24&!qsfgfsfodf!tibsft!pg!bo!frvbm!bnpvou/
Efcfouvsfipmefst!Ð!up!cf!sfeffnfe!cz!C!Mue/!bu!qbs/
Mjrvjebujpo!fyqfotft!Ð!!36-111/
Zpv!bsf!sfrvjsfe!up!dbmdvmbuf!qvsdibtf!dpotjefsbujpo/
4/ Cfmpx!jt!hjwfo!uif!Cbmbodf!Tiffu!pg!C!Dp!Mue/!bt!po!2/5/3129!;
Balance Sheet of B Co. Ltd. as at 1st April, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!41-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 4-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð! Hfofsbm!Sftfswf 41-111
)b*!Mpoh.ufsn!cpsspxjoht!Ð!21&!Efcfouvsft 2-61-111
)b*!Usbef!Qbzbcmft 31-111
)c*!Puifs!Dvssfou!Mjbcjmjujft!Ð!Qspwjefou!Gvoe 6-111
UPUBM 6-31-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!;!!Mboe!boe!Cvjmejoh :6-111
! ! ! ! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz 3-11-111
! ! ! ! ! ! ! )jj*!!!Joubohjcmf!bttfut!;
Hppexjmm 36-111
Qbufout 8-611
)b*!Dvssfou!jowftunfout 21-111
)d*!Usbef!sfdfjwbcmft 51-111
)e*!Dbti!boe!dbti!frvjwbmfout 47-611
UPUBM 6-31-111
B!Dp!Mue/!bctpscfe!uif!bcpwf!dpnqboz!po!uif!tbnf!ebuf!po!uif!cbtjt!pg!uif!Cbmbodf!Tiffu!hjwfo!boe!po!uif!gpmmpxjoh
ufsnt!boe!dpoejujpot!;
)2* Ju!xpvme!jttvf!23&!efcfouvsft!jo!B!Dp!Mue/!up!ejtdibshf!uif!efcfouvsf!efcu!bu!b!qsfnjvn!pg!6&/
)3* Ju!xpvme!qbz!!21-111!bt!dptu!pg!mjrvjebujpo/
)4* Ju!xpvme!qbz!dbti!A!!4!qfs!tibsf!boe!fydibohf!4!tibsft!pg!!21!fbdi!)nbslfu!wbmvf!!26*!gps!fwfsz!6!tibsft
jo!C!Dp!Mue/
Zpv!bsf!sfrvjsfe!up!dbmdvmbuf!uif!qvsdibtf!dpotjefsbujpo/
5/ Uif!bctusbdu!pg!uif!Cbmbodf!Tiffu!pg!uif!BYF!Mue!bt!bu!42tu!Nbsdi-!3129!bsf!bt!gpmmpxt!;
Mjbtcjmjujft !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! ! ! !
Frvjuz!tibsf!dbqjubm!)!211!fbdi* !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 26-11-111
23&!Qsfgfsfodf!tibsf!dbqjubm!)!211!fbdi* !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 9-11-111
24&!Efcfouvsft !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 4-11-111
Po!42tu!Nbsdi-!3129!CYF!Mue!bhsffe!up!ublf!pwfs!BYF!Mue!po!uif!gpmmpxjoh!ufsnt!;
)2* Gps!fbdi!qsfgfsfodf!tibsf!jo!BYF!Mue!!21!jo!dbti!boe!pof!:&!qsfgfsfodf!tibsf!pg!!211!jo!CYF!Mue/
)3* Gps!fbdi!frvjuz!tibsf!BYF!Mue!!31!jo!dbti!boe!pof!frvjuz!tibsf!jo!CYF!Mue!pg!!211!fbdi/!Ju!xbt!efdjefe!uibu
uif!tibsf!jo!CYF!Mue!xjmm!cf!jttvfe!bu!nbslfu!qsjdf!pg!!251!qfs!tibsf/
)4* Mjrvjebujpo!fyqfotft!pg!BYF!Mue!bsf!up!cf!sfjncvstfe!cz!CYF!Mue!up!uif!fyufou!pg!!21-111/!Bduvb!fyqfotft
bnpvoufe!up!!23-611/
Zpv!bsf!sfrvjsfe!up!dpnqvuf!uif!bnpvou!pg!qvsdibtf!dpotjefsbujpo/
Closing of Books of Account of Transferor Company
6/ Uif!gpmmpxjoh!bsf!uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!Y!Mue/!boe!Z!Mue/
Balance Sheets of X Ltd. and Y Ltd. as at . . .
Opuf Y!Mue/ Z!Mue/
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!21!fbdi 2-11-111 61-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt 21-111 )21-111*
)b*!Tipsu.ufsn!cpsspxjoht!Ð!Mpbo!gspn!Y!Mue/ Ð 26-111
UPUBM 2-46-111 71-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou!boe!Nbdijofsz 2-31-111 71-111
)b*!Tipsu.ufsn!mpbot!boe!bewbodft!Ð!Mpbo!up!Z!Mue/ 26-111 Ð
UPUBM 2-46-111 71-111
B!ofx!dpnqboz!YZ!Mue/!jt!gpsnfe!up!bdrvjsf!uif!tvoesz!bttfut!boe!dsfejupst!pg!Y!Mue/!boe!Z!Mue/!boe!gps!uijt!qvsqptf-
uif!tvoesz!bttfut!pg!Y!Mue/!bsf!sfwbmvfe!bu!!2-11-111/!Uif!efcu!evf!up!Y!Mue/!jt!bmtp!up!cf!ejtdibshfe!jo!tibsft!pg
YZ!Mue/
Tipx!uif!Mfehfs!Bddpvout!up!dmptf!uif!cpplt!pg!Y!Mue/ \D/B/!)Joufs*!Ð!Bebqufe^
7/ Uif!gpmmpxjoh!jt!uif!Cbmbodf!Tiffu!pg!B!Dp!Mue/!bt!po!2tu!Bqsjm-!3129!;
Balance Sheet of A Co. Ltd. as at 1st April, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)c*!Sftfswft!boe!Tvsqmvt!Ð! Hfofsbm!Sftfswf 61-111
)4*!Opo.dvssfou!Mjbcjmjujft!; 2-11-111
)b*!Mpoh.ufsn!cpsspxjoht!Ð!23&!Efcfouvsft
)b*!Usbef!Qbzbcmft 41-111
UPUBM 5-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!;
Mboe!boe!Cvjmejoh 2-61-111
Qmbou!boe!Nbdijofsz 94-111
! ! ! ! ! ! ! )jj*!!!Joubohjcmf!bttfut!Ð!Hppexjmm 61-111
)c*!Usbef!sfdfjwbcmft!Ð!Efcupst 43-111
)d*!Dbti!boe!dbti!frvjwbmfout!Ð!Dbti!bu!Cbol 61-111
UPUBM 5-11-111
C!!Dp!!Mue/!!bhsffe!!up!!ublf!!pwfs!!uif!!bttfut!)fydmvtjwf!pg!dbti!boe!hppexjmm!bu!21&!mftt!!uibo!cppl!wbmvft-!up!qbz
!86-111!gps!hppexjmm*!boe!up!ublf!pwfs!uif!efcfouvsft/
Uif!qvsdibtf!dpotjefsbujpo!xbt!up!cf!ejtdibshfe!cz!uif!jttvf!pg!2-761!frvjuz!tibsft!pg!!211!fbdi!boe!uif!cbmbodf
jo!dbti/!Uif!dptu!pg!mjrvjebujpo!bnpvoufe!up!!4-111/
Zpv!bsf!sfrvjsfe!up!dmptf!uif!cpplt!pg!B!Dp!Mue/
8/ Fyf!Mjnjufe!xbt!xpvoe!vq!po!42/4/3129!boe!jut!Cbmbodf!Tiffu!bt!po!uibu!ebuf!jt!hjwfo!cfmpx!;
Balance Sheet of Exe Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!2-31-111!Frvjuz!Tibsft!pg!!21!fbdi 23-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð! Qspgjut!qsjps!up!Jodpsqpsbujpo 53-111
Dpoujohfodz!Sftfswf 3-81-111
)b*!Usbef!qbzbcmft!;!
! ! ! ! ! Cjmmt!Qbzbcmf 51-111
! ! ! ! ! Tvoesz!Dsfejupst 3-37-111
)c*!Tipsu.ufsn!qspwjtjpot!Ð!Jodpnf!uby 3-31-111
UPUBM 33-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou :-75-111
)c*!Usbef!sfdfjwbcmft!;
! ! ! ! ! ! Tvoesz!Efcupst 2-63-111
! ! ! ! ! ! Cjmmt!Sfdfjwbcmft 41-111
)d*!Dbti!boe!dbti!frvjwbmfout!Ð!Dbti!bu!Cbol 4-3:-111
UPUBM 33-61-111
Xzf!Mjnjufe!uppl!pwfs!uif!gpmmpxjoh!bttfut!bu!wbmvft!tipxo!bt!voefs!;
Qmbou!!23-91-111<!Jowfoupsjft!!8-81-111<!boe!Cjmmt!Sfdfjwbcmf!!41-111/
Qvsdibtf!dpotjefsbujpo!xbt!tfuumfe!cz!Xzf!Mjnjufe!bt!voefs!;
!6-21-111!!pg!!uif!!dpotjefsbujpo!!xbt!!tbujtgjfe!cz!uif!bmmpunfou!pg!gvmmz!qbje!21&!Qsfgfsfodf!Tibsft!pg!!211!fbdi/
Uif!cbmbodf!xbt!tfuumfe!cz!jttvjoh!frvjuz!tibsft!pg!!21!fbdi!pg!!9!qfs!tibsf!qbje!vq/
Tvoesz!Efcupst!sfbmjtfe!!2-61-111/!Cjmmt!qbzbcmf!xbt!tfuumfe!gps!!49-111/
Jodpnf.uby!bvuipsjtfe!gjyfe!uif!ubybujpo!mjbcjmjuz!bu!!3-33-111/
Dsfejupst!!xfsf!!gjobmmz!!tfuumfe!xjui!uif!dbti!sfnbjojoch!bgufs!nffujoh!mjrvjebujpo!fyqfotft!bnpvoujoh!up!!9-111/
)j* Dbmdvmbuf! uif! ovncfs! pg! frvjuz! tibsft! boe! qsfgfsfodf! tibsft! up! cf! bmmpuufe! cz! Xzf! Mjnjufe! jo!ejtdibshf!pg
)jj* Qsfqbsf!uif!Sfbmjtbujpo!Bddpvou-!Dbti!0!Cbol!Bddpvou-!Frvjuz!Tibsfipmefst!Bddpvou!boe!Xzf!Mjnjufe!Bddpvou
jo!uif!cpplt!pg!Fyf!Mjnjufe/
9/ Uif!Cbmbodf!Tiffu!pg!Nbst!Mjnjufe!bt!po!42tu!Nbsdi-!3129!xbt!bt!gpmmpxt!;
Balance Sheets of Mars Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!2-11-111!Frvjuz!Tibsft!pg!!21!fbdi!gvmmz!qbje 21-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð! Dbqjubm!Sftfswf 53-111
Dpoujohfodz!Sftfswf 3-81-111
)b*!Usbef!Qbzbcmft!;
! ! ! ! ! ! ! ! Cjmmt!Qbzbcmf 51-111
! ! ! ! ! ! ! ! Tvoesz!Dsfejupst 3/37/111
)c*!Tipsu.ufsn!Qspwjtjpot!Ð!Qspwjtjpo!gps!Jodpnf!uby 3-31-111
UPUBM 31-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Mboe!boe!Cvjmejoh 8-75-111
)c*!Usbef!sfdfjwbcmft!;
! ! ! ! ! ! ! ! Tvoesz!Efcupst 2-63-111
! ! ! ! ! ! ! ! Cjmmt!sfdfjwbcmft 41-111
)d*!Dbti!boe!dbti!frvjwbmfout!Ð!Dbti!bu!Cbol 4-3:-111
UPUBM 31-61-111
Po!2tu!Bqsjm-!3129!Kvqjufs!Mjnjufe!bhsffe!up!bctpsc!Nbst!Mjnjufe!po!uif!gpmmpxjoh!ufsnt!boe!dpoejujpot!;
)2* Kvqjufs!Mjnjufe!xjmm!ublf!pwfs!uif!bttfut!bu!uif!gpmmpxjoh!wbmvft!;! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
! ! ! ! ! ! ! Mboe!boe!Cvjmejoh !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 21-91-111
! ! ! ! ! ! ! Jowfoupsjft !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 8-81-111
! ! ! ! ! ! ! Cjmmt!Sfdfjwbcmf !!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!!!!/!! 41-111
)3* Qvsdibtf!dpotjefsbujpo!xjmm!cf!tfuumfe!cz!Kvqjufs!Mue!bt!voefs!;
5-211!gvmmz!qbje!21&!qsfgfsfodf!tibsft!pg!!211!xjmm!cf!jttvfe!boe!uif!cbmbodf!xjmm!cf!tfuumfe!cz!jttvjoh!frvjuz
tibsft!pg!!21!fbdi!bu!!9!qbje.vq/
)4* Mjrvjebujpo!fyqfotft!bsf!up!cf!sfjncvstfe!cz!Kvqjufs!Mue!up!uif!fyufou!pg!!6-111/
)5* Tvoesz!Efcupst!sfbmjtfe!!2-61-111-!Cjmmt!Qbzbcmf!xfsf!tfuumfe!gps!!49-111/!Jodpnf!uby!bvuipsjujft!gjyfe!uif
ubybujpo!mjbcjmjuz!bu!!3-33-111!boe!uif!tbnf!xbt!qbje/
)6* Dsfejupst!xfsf!gjobmmz!tfuumfe!xjui!dbti!sfnbjojoh!bgufs!nffujoh!mjrvjebujpo!fyqfotft!bnpvoujoh!up!!9-111/
)j* Dbmdvmbuf!uif!ovncfs!pg!frvjuz!tibsft!boe!qsfgfsfodf!tibsft!up!cf!bmmpuufe!cz!Kvqjufs!Mjnjufe!jo!ejtdibshf!pg
)jj* Qsfqbsf!uif!Sfbmjtbujpo!Bddpvou-!Cbol!Bddpvou-!Frvjuz!Tibsfipmefst!Bddpvou!boe!Kvqjufs!MjnjufeÔt!bddpvou!jo
uif!cpplt!pg!Nbst!Mue/ \D/B/!JQDD!Ð!Bebqufe^
Amalgamation in the Nature of Merger
:/ Uif!gpmmpxjoh!bsf!uif!Cbmbodf!Tiffut!pg!B!Mue/!boe!C!Mue/!bt!po!42/4/3129!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)b*!Usbef!Qbzbcmft!Ð!Dsfejupst 5-61-111 3-11-111
UPUBM 28-11-111 9-61-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
Mboe!boe!Cvjmejoh 5-11-111 2-11-111
Qmbou!boe!Nbdijofsz 6-11-111 5-11-111
)c*!Opo.dvssfou!jowftunfout!; 2-11-111 2-11-111
)b*!Jowfoupsjft 4-11-111 2-11-111
)c*!Usbef!sfdfjwbcmft 4-61-111 2-61-111
)d*!Dbti!boe!dbti!frvjwbmfout!Ð!Dbti!bu!Cbol 61-111 Ð
UPUBM 28-11-111 9-61-111
B!ofx!dpnqboz!D!Mue/!xbt!gpsnfe!up!ublf!pwfs!uif!cvtjoftt!pg!B!Mue/!boe!C!Mue/!Ð!uif!qvsdibtf!dpotjefsbujpo!cfjoh
!23-11-111!gps!B!Mue/!boe!!7-11-111!gps!C!Mue/-!qbzbcmf!jo!frvjuz!tibsft!pg!!21!fbdi!jo!D!Mue/
Efcupst!pg!B!Mue/!jodmvefe!!61-111!evf!gspn!C!Mue/!Uif!tupdl!pg!C!Mue/!jodmvefe!!36-111!xpsui!pg!hppet!qvsdibtfe
gspn!B!Mue/-!po!xijdi!B!Mue/!nbef!b!qspgju!pg!31&!po!tbmft/
Tipx!uif!kpvsobm!fousjft!jo!uif!cpplt!pg!B!Mue/-!C!Mue/!boe!D!Mue/!Bmtp-!qsfqbsf!uif!Cbmbodf!Tiffu!pg!D!Mue/!bt!po
4/4/3129-!bttvnjoh!uibu!uif!bnbmhbnbujpo!jt!jo!uif!obuvsf!pg!nfshfs/
21/ Gpmmpxjoh!bsf!uif!Cbmbodf!Tiffut!pg!B!Mue/!boe!C!Mue/!bt!po!2/5/3129!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)c*!Sftfswft!boe!Tvsqmvt!Ð! Hfofsbm!Sftfswf 46-111 41-111
)b*!Usbef!Qbzbcmft 61-111 46-111
UPUBM 3-61-111 2-86-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
Mboe!boe!Cvjmejoh 86-111 71-111
Qmbou!boe!Nbdijofsz 61-111 51-111
Gvsojuvsf!boe!Gjyuvsft 51-111 36-111
)b*!Jowfoupsjft 46-111 26-111
)c*!Usbef!sfdfjwbcmft 36-111 31-111
)d*!Dbti!boe!dbti!frvjwbmfout 36-111 26-111
UPUBM 3-61-111 2-86-111
Uxp!dpnqbojft!efdjefe!up!bnbmhbnbuf!jo!uif!obuvsf!pg!nfshfs/!B!ofx!dpnqboz-!BC!Mue/!jt!gpsnfe!up!ublf!pwfs!bmm
uif!bttfut!boe!mjbcjmjujft/!Uif!bvuipsjtfe!tibsf!dbqjubm!pg!BC!Mue/!jt!51-111!frvjuz!tibsft!pg!!21!fbdi!Ð!pvu!pg!xijdi
41-111!tibsft!xjmm!cf!jttvfe!up!B!Mue/!boe!C!Mue/!Uif!nbslfu!wbmvft!pg!uif!mboe!boe!cvjmejoh-!boe!qmbou!boe!nbdijofsz
pg!uif!uxp!dpnqbojft!bsf!ejggfsfou!gspn!cppl!wbmvft/!Gps!uif!qvsqptf!pg!dbmdvmbujoh!qvsdibtf!dpotjefsbujpo-!bttfut
boe!mjbcjmjujft!ublfo!pwfs!bu!cppl!wbmvft-!tvckfdu!up!uif!gpmmpxjoh!dibohft!Ð! ! ! ! ! ! B!Mue/!)*! ! ! ! ! ! ! C!Mue/!)*
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Mboe!boe!Cvjmejoh! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! :1-111! ! ! ! ! ! ! ! ! 76-111
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Qmbou!boe!Nbdijofsz! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !71-111! ! ! ! ! ! ! ! ! 56-111
Zpv!bsf!sfrvjsfe!up!;!)j*!dbmdvmbuf!qvsdibtf!dpotjefsbujpo<!)jj*!dmptf!uif!cpplt!pg!cpui!uif!dpnqbojft<!)jjj*!qbtt
pqfojoh!kpvsobm!fousjft!jo!uif!cpplt!pg!BC!Mue/<!boe!)jw*!qsfqbsf!uif!Cbmbodf!Tiffu!pg!BC!Mue/
Amalgamation in the Nature of Purchase
22/ Uif!Cbmbodf!Tiffu!pg!Nppo!Mue/!bt!po!42/4/3129!xbt!bt!gpmmpxt!;
Balance Sheet of Moon Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!6-111!Frvjuz!Tibsf!pg!!211!fbdi 6-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð! Qspgju!boe!Mptt!Bddpvou )2-76-111*
)b*!Mpoh.ufsn!cpsspxjoht!Ð!:&!Efcfouvsft 2-11-111
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst :1-111
UPUBM 6-36-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
Cvjmejoh 3-11-111
Qmbou 2-71-111
)c*!Usbef!sfdfjwbcmft!Ð!Efcupst 2-31-111
UPUBM 6-36-111
Tvo!Mue/!xbt!gpsnfe!up!ublf!pwfs!uif!cvtjoftt!pg!Nppo!Mue/!po!uif!gpmmpxjoh!ufsnt!;
)j* Qsfgfsfoujbm!dsfejupst!up!cf!qbje!!21-111!jo!gvmm/
)jj* Psejobsz!dsfejupst!cf!hjwfo!uif!pqujpo!up!fjuifs!bddfqu!61&!pg!uifjs!dmbjnt!jo!dbti!ps!dpowfsu!uifjs!dmbjnt!joup
23&!Efcfouvsft!pg!Tvo!Mue/!)ibmg!uif!psejobsz!dsfejupst!pqufe!gps!dbti*/
)jjj* Efcfouvsft!cf!ejtdibshfe!cz!uif!jttvf!pg!tvggjdjfou!ovncfs!pg!23&!Efcfouvsft!pg!Tvo!Mue/!bt!xpvme!csjoh!uif
tbnf!bnpvou!pg!joufsftu/
)jw* Tibsfipmefst!cf!jttvfe!3-111!Frvjuz!Tibsft!pg!!211!fbdi!pg!Tvo!Mue/!bu!b!qsfnjvn!pg!31&/
)w* Mjrvjebujpo!fyqfotft!!6-111!cf!qbje/
Qsfqbsf!uif!ofdfttbsz!bddpvout!up!dmptf!uif!cpplt!pg!Nppo!Mue/!boe!qsfqbsf!uif!Cbmbodf!Tiffu!pg!Tvo!Mue/!bttvnjoh
uibu!uif!bttfut!pg!Nppo!Mue/!bsf!ublfo!pwfs!bu!36&!ejtdpvou/!
23/ Qsptqfspvt!Mue/!ibt!jodvssfe!fydfqujpobm!mpttft!boe!b!tdifnf!pg!sfdpotusvdujpo!xbt!bqqspwfe!cz!bmm!uif!dpodfsofe
qbsujft/!Uif!Cbmbodf!Tiffu!bt!bu!42tu!Nbsdi-!3129!tipxfe!;
Balance Sheet of Prosperous Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð! )2* 27-91-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt!Bddpvou ):-11-111*
)4*!Opo.dvssfou!Mjbcjmjujft!; 23-11-111
)b*!Mpoh.ufsn!cpsspxjoht!Ï!Cbol!Mpbo!)Tfdvsfe*
)b*!Usbef!Qbzbcmft!Ð
! ! ! ! ! ! Qsfgfsfoujbm!Dsfejupst 71-111
! ! ! ! ! ! Puifs!Dsfejupst 25-51-111
UPUBM 45-91-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou!boe!Nbdijofsz 29-11-111
)b*!Jowfoupsjft!bu!dptu 8-31-111
)c*!Usbef!sfdfjwbcmft!Ð!Tvoesz!Efcupst :-71-111
UPUBM 45-91-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm
Qbsujdvmbst Qsptqfspvt!Mue/
)*
23-111!Frvjuz!Tibsft!pg!!211!fbdi 23-11-111
5-911!Dvnvmbujwf!Qsfgfsfodf!Tibsft!pg!!211!fbdi 5-91-111
27-91-111
Uif!tdifnf!pg!sfdpotusvdujpo!qspwjefe!;
)b* b!ofx!dpnqboz!Ð!Csjhiu!Mue/!Ð!xjmm!cf!gpsnfe!up!ublf!pwfs!uif!bttfut!boe!mjbcjmjujft!pg!Qsptqfspvt!Mue/!bt!bu
42tu!Nbsdi-!3129/
)c* 3-511!frvjuz!tibsft!pg!!211!fbdi!jo!Csjhiu!Mue/-!dsfejufe!bt!!61!qfs!tibsf!qbje!vq-!up!cf!jttvfe!up!uif!mjrvjebups
pg!Qsptqfspvt!Mue/!gps!uif!cfofgju!pg!uibu!dpnqbozÔt!frvjuz!tibsfipmefst!xip!ibe!bhsffe!up!qbz!vq!uif!cbmbodf
pg!!61!qfs!tibsf!jnnfejbufmz/
)d* 5-911!qsfgfsfodf!tibsft!pg!Csjhiu!Mue/-!dsfejufe!bt!!86!qfs!tibsf!qbje!vq!up!cf!jttvfe!up!mjrvjebujpo!pg!Qsptqfspvt
Mue/!gps!uif!cfofgju!pg!uibu!dpnqbozÔt!qsfgfsfodf!tibsfipmefst-!xip!ibe!bhsffe!up!qbz!uif!cbmbodf!pg!!36!qfs
tibsf!jnnfejbufmz/!Jo!beejujpo-!!68-711!jo!25&!efcfouvsft!)sfeffnbcmf!bgufs!6!zfbst*!bsf!up!cf!jttvfe!bt
dpnqfotbujpo!gps!bssfbst!pg!qsfgfsfodf!ejwjefoet/
)e* Csjhiu!Mue/!up!sfjncvstf!mjrvjebujpo!fyqfotft!pg!Qsptqfspvt!Mue/!gps!!23-111/
)f* Csjhiu!Mue/!efdjefe!up!bepqu!uif!gpmmpxjoh!wbmvft!gps!ubohjcmf!bttfut!bdrvjsfe-!wj{/-!
!27-91-111!gps!Qmbou!boe!Nbdijofsz<!!7-11-111!gps!tupdl<!!:-71-111!gps!usbef!efcupst/
)g* Csjhiu!Mue/!jnnfejbufmz!up!ejtdibshf!qsfgfsfoujbm!dsfejupst!jo!dbti/
)h* Csjhiu!Mue/!up!gvmmz!tbujtgz!Ópuifs!dsfejupstÔ!mjbcjmjuz!bt!voefs!;
!8-31-111!jo!dbti<!!4-71-111!jo!bddfqubodf!pg!b!cjmm!pg!fydibohf!qbzbcmf!bgufs!231!ebzt<!!4-71-111!jo!jttvf
pg!25&!efcfouvsft!)sfeffnbcmf!bgufs!6!zfbst*/
)i* Uif!bvuipsjtfe!dbqjubm!pg!Csjhiu!Mue/!xjmm!cf!!41-11-111!ejwjefe!joup!26-111-!23&!dvnvmbujwf!qsfgfsfodf!tibsft
pg!!211!fbdi!boe!26-111!frvjuz!tibsft!pg!!211!fbdi/
)j* Uif!ejsfdupst!pg!Csjhiu!Mue/!ibwf!bhsffe!up!tvctdsjcf!gps!9-511!frvjuz!tibsft!pg!!211!fbdi!qbzbcmf!jo!gvmm!xjui
bqqmjdbujpo/
)k* Csjhiu!Mue/!efdjefe!up!qbz.pgg!cbol!mpbo!up!uif!fyufou!pg!!3-51-111!boe!uif!cbmbodf!xjmm!cf!tfdvsfe!po!gjyfe
bttfut/
)l* Qsfmjnjobsz!fyqfotft!pg!Csjhiu!Mue/!bnpvoufe!up!!35-111/
Bttvnjoh!uibu!bmm!uif!bcpwf!qspwjtjpot!pg!uif!tdifnf!bsf!gvmgjmmfe-!zpv!bsf!sfrvjsfe!up!tipx!;
)b* Jo!uif!cpplt!pg!Qsptqfspvt!Mue/;!)j*!Sfbmjtbujpo!Bddpvou<!boe!)jj*!Tvoesz!Nfncfst!Bddpvou<!boe!
)c* )j*!Kpvsobm!fousjft!)jodmvejoh!gps!dbti!jufnt*!jo!uif!cpplt!pg!Csjhiu!Mue/-!boe!
)jj*!Pqfojoh!Cbmbodf!Tiffu!pg!Csjhiu!Mue/ \J/D/X/B/!)Gjobm*!Ð!Bebqufe^
24/ Uif!gpmmpxjoh!bcsjehfe!Cbmbodf!Tiffu!pg!T!Dp!Mue/!bt!po!42/4/3129!jt!hjwfo!cfmpx!;
Balance Sheet of S Co. Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm! )2* 22-:1-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt )5-:1-111*
)b*!Mpoh.ufsn!cpsspxjoht!Ð!21&!Efcfouvsft 2-11-111
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 2-11-111
)c*!Puifs!dvssfou!mjbcjmjujft!Ð!Joufsftu!bddsvfe!po!Efcfouvsft 21-111
UPUBM :-21-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou!boe!Nbdijofsz 7-11-111
! ! ! ! ! ! ! )jj*!!!Joubohjcmf!bttfut!Ð!Hppexjmm 61-111
)c*!Usbef!sfdfjwbcmft 2-31-111
)d*!Dbti!boe!dbti!frvjwbmfout 51-111
UPUBM :-21-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm
Qbsujdvmbst Qsptqfspvt!Mue/
)*
7:-111!Frvjuz!Tibsft!pg!!21!fbdi 7-:1-111
61-111-!23&!Qsfgfsfodf!Tibsft!Dbqjubm!pg!pg!!21!fbdi 6-11-111
22-:1-111
Uif!gpmmpxjoh!tdifnf!pg!sfdpotusvdujpo!ibt!cffo!tbodujpofe!cz!uif!dpvsu!;
)2* B!ofx!dpnqboz!T!T!Dp!Mue/!jt!gpsnfe!xjui!2-11-111!frvjuz!tibsft!pg!!21!fbdi/
)3* Uif!ofx!dpnqboz!xjmm!bdrvjsf!bmm!uif!bttfut!boe!mjbcjmjujft!pg!T!Dp!Mue/!po!uif!gpmmpxjoh!ufsnt!;
)b*!Pme!dpnqbozÔt!efcfouvsft!bsf!qbje!cz!tjnjmbs!efcfouvsft!jo!uif!ofx!dpnqboz/!Uif!pvutuboejoh!joufsftu!po
! ! ! efcfouvsft!bsf!qbje!cz!uif!ofx!dpnqboz!cz!jttvjoh!frvbm!bnpvou!pg!frvjuz!tibsft!bu!qbs/
)c*!Uif!dsfejupst!bsf!qbje!gps!fwfsz!!211!evft!!26!jo!dbti!boe!21!frvjuz!tibsft!jttvfe!bu!qbs/
)d*!Qsfgfsfodf!tibsfipmefst!bsf!up!hfu!frvbm!ovncfs!pg!frvjuz!tibsft-!boe!gps!2!zfbsÔt!bssfbs!ejwjefoe-!uiftf
! ! ! tibsfipmefst!xjmm!hfu!6!frvjuz!tibsft!bu!qbs!gps!fbdi!!211!evf/
)e*!Uif!frvjuz!tibsfipmefst!xjmm!hfu!2!frvjuz!tibsf!jo!uif!ofx!dpnqboz!jo!fydibohf!pg!4!tibsft!ifme/
)f*!Uif!ofx!dpnqboz!xjmm!cfbs!uif!sfdpotusvdujpo!fyqfotft!pg!!21-111/
)4* Dvssfou!bttfut!bsf!up!cf!ublfo!bu!uifjs!cppl!wbmvft!)fydfqu!jowfoupsjft!xijdi!jt!up!cf!sfevdfe!cz!!41-111*/
)5* Sfnbjojoh!tibsft!pg!uif!ofx!dpnqboz!bsf!up!cf!jttvfe!bu!qbs!boe!cf!gvmmz!qbje/
Bttvnjoh!uif!bcpwf!tdifnf!ibt!cffo!jnqmfnfoufe-!zpv!bsf!up!tipx!;
)b*!Jo!uif!cpplt!pg!T!Dp!Mue/!;!)j*!Ofx!DpnqbozÔt!Bddpvou<!)jj*!Sfbmjtbujpo!boe!Sfdpotusvdujpo!)dpncjofe*!Bddpvou<
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !)jjj*!Frvjuz!Tibsfipmefst!Bddpvou/
)c*!Jo!uif!cpplt!pg!T!T!Dp!Mue/!;!)j*!Kpvsobm!fousjft!sfdpsejoh!uif!bdrvjtjujpo!boe!puifs!usbotbdujpot<!boe!
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! )jj*!Tvnnbsjtfe!Cbmbodf!Tiffu/
25/ Tubs!boe!Nppo!ibe!cffo!dbsszjoh!po!cvtjoftt!joefqfoefoumz/!Uifz!bhsffe!up!bnbmhbnbuf!boe!gpsn!b!ofx!dpnqboz
Ofquvof!Mue/!xjui!bo!bvuipsjtfe!tibsf!dbqjubm!pg!!3-11-111!ejwjefe!joup!51-111!frvjuz!tibsft!pg!!6!fbdi/
Po!42tu!Nbsdi-!3129-!uif!sftqfdujwf!Cbmbodf!Tiffut!pg!Tubs!boe!Nppo!xfsf!bt!gpmmpxt!;
Qbsujdvmbst Tubs!)* Nppo!)*
Gjyfe!Bttfut 4-28-611 2-93-611
Dvssfou!Bttfut 2-74-611 94-986
5-92-111 3-77-486
Mftt;!Dvssfou!Mjbcjmjujft 3-:9-611 :1-236
Sfqsftfoujoh!Dbqjubm 2-93-611 2-87-361
Beejujpobm!jogpsnbujpo!;!
)b*!Sfwbmvfe!gjhvsft!pg!Gjyfe!boe!Dvssfou!Bttfut!xfsf!bt!gpmmpxt!;
Gjyfe!Bttfut 4-66-111 2-:6-111
Dvssfou!Bttfut 2-5:-861 89-986
)c* Uif!efcupst!boe!dsfejupst!jodmvef!!32-786!pxfe!cz!Tubs!up!Nppo/!Uif!qvsdibtf!dpotjefsbujpo!jt!tbujtgjfe!cz
jttvf!pg!uif!gpmmpxjoh!tibsft!boe!efcfouvsft!;
)j* 41-111!frvjuz!tibsft!pg!Ofquvof!Mue/-!up!Tubs!boe!Nppo!jo!uif!qspqpsujpo!jo!uif!qspgjubcjmjuz!pg!uifjs!sftqfdujwf
cvtjoftt!cbtfe!po!uif!bwfsbhf!ofu!qspgju!evsjoh!uif!mbtu!uisff!zfbst!xijdi!xfsf!bt!gpmmpxt!;
3126.26!Qspgju 3-35-899 2-47-:61
3126.27!)Mptt*!0!Qspgju )2-361* 2-82-161
3127.28!Qspgju 2-99-:73 2-8:-611
)jj* 26&!efcfouvsft!jo!Ofquvof!Mue/-!bu!qbs!up!qspwjef!bo!jodpnf!frvjwbmfou!up!9&!sfuvso!po!dbqjubm!fnqmpzfe!jo
uifjs!sftqfdujwf!cvtjoftt!bt!po!42tu!Nbsdi-!3129!bgufs!sfwbmvbujpo!pg!bttfut/
Zpv!bsf!sfrvjsfe!up!;!)2*!Dpnqvuf!uif!bnpvou!pg!efcfouvsft!boe!tibsft!up!cf!jttvfe!up!Tubs!boe!Nppo<!boe!)3*!B
Cbmbodf!Tiffu!pg!Ofquvof!Mue/-!tipxjoh!uif!qptjujpo!jnnfejbufmz!bgufs!bnbmhbnbujpo/
26/ Tbhbs!Mue/!xbt!gpsnfe!po!2!Kbovbsz-!3129!xjui!bo!bvuipsjtfe!tibsf!dbqjubm!pg!6-11-111!frvjuz!tibsft!pg!!21!fbdi/
2-11-111!frvjuz!tibsft!xfsf!jttvfe!gps!dbti!bu!b!qsfnjvn!pg!!3/61!qfs!tibsf/!Op!puifs!usbotbdujpot!uppl!qmbdf!voujm
2!Bqsjm!3129!xifo!Tbhbs!Mue/!bhsffe!up!cvz!uif!bttfut-!jodmvejoh!hppexjmm!boe!bttvnf!uif!mjbcjmjujft!pg!Sjwfs!Mue/
boe!Dbobm!Mue/!gps!b!upubm!pg!5-11-111!pg!jut!tibsft/
Gps!uif!qvsqptf!pg!efufsnjojoh!uif!qsfnjvn!bu!xijdi!uif!tibsft!pg!Tbhbs!Mue/!xfsf!up!cf!jttvfe-!gjyfe!bttfut-!dvssfou
bttfut!boe!mjbcjmjujft!bsf!up!cf!ublfo!bu!uifjs!cppl!wbmvft-!hppexjmm!jt!up!cf!efufsnjofe!po!uif!cbtjt!pg!uxp!boe!ibmg
ujnft!uif!bwfsbhf!qspgju!pg!uif!qbtu!uisff!zfbst!bgufs!efevdujoh!b!tuboebse!qspgju!bu!21&!po!dbqjubm!fnqmpzfe!bt!po!42
Nbsdi-!3129/!Uif!tvnnbsjtfe!Cbmbodf!Tiffu!pg!Sjwfs!Mue/!boe!Dbobm!Mue/!bt!po!42!Nbsdi-!3129!xfsf!bt!gpmmpxt!;
Balance Sheets of River Ltd. and Canal Ltd. as at 31st March, 2018
Opuf Sjwfs!Mue/ Dbobm!Mue/
)2* )3* )4* )5*
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt :-61-111 86-111
)b*!Usbef!Qbzbcmft 21-11-111 38-61-111
UPUBM 46-11-111 56-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut 33-61-111 25-61-111
)b*!Puifs!Dvssfou!Bttfut 23-61-111 41-61-111
UPUBM 46-11-111 56-11-111
Pqfsbujoh!qspgjut!gps!uif!mbtu!uisff!zfbst!;
Qbsujdvmbst Sjwfs!Mue/ Dbobm!Mue/

Zfbs!foefe!42!Nbsdi-! 3126 4-63-611 3-86-111
3127 5-51-111 4-31-111
3129 5-56-111 4-53-611
)b*! dbmdvmbuf! uif! ovncfs! pg! tibsft! up! cf! jttvfe! cz! Tbhbs! Mue/! up! uif! tibsfipmefst! pg! Sjwfs! Mue/! boe! Dbobm! Mue/
sftqfdujwfmz<!!boe!!)c*!qsfqbsf!b!Cbmbodf!Tiffu!pg!Tbhbs!Mue/!bgufs!dpnqmfujpo!pg!cvtjoftt!qvsdibtft/
\J/D/X/B/!)Gjobm*!Ð!Bebqufe^
Inter-Company Investments
27/ Uif!gpmmpxjoh!bsf!uif!tvnnbsjtfe!Cbmbodf!Tiffut!pg!Y!Mue/!boe!Z!Mue/!bt!po!42/4/3129!;
Opuf Y!Mue/ Z!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!21!fbdi! 5-11-111 3-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt 61-111 Ð
)b*!Mpoh.ufsn!cpsspxjoht!Ð!26&!Efcfouvsft 2-11-111 Ð
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 2-61-111 2-51-111
UPUBM 8-11-111 4-51-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Qmbou 6-11-111 4-51-111
)c*!Opo.dvssfou!jowftunfout!Ð!26-111!Tibsft!jo!Z!Mue/ 3-11-111 Ð
UPUBM 8-11-111 4-51-111
B!ofx!dpnqboz-!YZ!Mue/-!jt!gpsnfe!up!bdrvjsf!uif!foujsf!cvtjoftt!pg!Y!Mue/!boe!Z!Mue/!Gps!uijt!qvsqptf-!Qmbou!pg!Y
Mue/!xfsf!wbmvfe!bu!!4-11-111!boe!Qmbou!pg!Z!Mue/!bu!!3-11-111/!Uif!qvsdibtf!dpotjefsbujpo!jt!cfjoh!ejtdibshfe!jo
tibsft!pg!!21!fbdi!pg!ofx!dpnqboz/!Zpv!bsf!sfrvjsfe!up!dmptf!uif!cpplt!pg!Y!Mue/!boe!Z!Mue/<!qbtt!kpvsobm!fousjft
jo!uif!cpplt!pg!YZ!Mue/!boe!up!qsfqbsf!uif!pqfojoh!Cbmbodf!Tiffu/
28/ Bmm!Joejb!Npufmt!Mue/!bctpscfe!uif!cvtjoftt!pg!Xftu!Joejb!Npufmt!Mue/!bt!po!42tu!Nbsdi-!3129/!Uifjs!sftqfdujwf
qptjujpo!pg!bttfut!boe!mjbcjmjujft!bt!po!uibu!ebuf-!qsjps!up!bctpscujpo!xfsf!bt!voefs!;!! ! ! ! ! ! ! ! ! ! ! \gjhvsft!jo!!mblit^
Bttfut!boe!Mjbcjmjujft Bmm!Joejb Xftu!Joejb
Npufmt!Mue/ Npufmt!Mue/
Tibsf!Dbqjubm 711 711
Sftfswf!boe!Tvsqmvt 651 471
Efcfouvsft 911 :71
Tvoesz!Dsfejupst 331 591
Hppexjmm 559 431
Cvjmejoht 2-271 2-231
Nbdijofsz 291 271
Tvoesz!Efcupst 71 671
Jowfoupsjft!0!Jowfoupsz 91 311
Dbti 43 51
Jowftunfout 311 Ð
Uif!jousjotjd!wbmvf!pg!Xftu!Joejb!Npufmt!Mue/Ôt!tibsf!ibt!up!cf!efufsnjofe/!Frvjwbmfou!jousjotjd!wbmvf!xpsui!pg!!21
gvmmz!qbje!vq!tibsft!pg!Bmm!Joejb!Npufmt!Mue/!bsf!up!cf!jttvfe!up!uif!tibsfipmefst!pg!Xftu!Joejb!Npufmt!Mue/
61&!pg!efcupst!pg!Bmm!Joejb!Npufmt!Mue/!dpnqsjtft!npofz!evf!gspn!Xftu!Joejb!Npufmt!Mue/
Jowfoupsz!pg!Xftu!Joejb!Npufmt!Mue/!jodmveft!hppet!xpsui!!41!mblit!tpme!cz!Bmm!Joejb!Npufmt!Mue/!bu!dptu!qmvt!31&/
Wbmvf!dbmmfe!boe!qbje.vq!po!Bmm!Joejb!Npufmt!Mue/Ôt!tibsf!jt!!9!qfs!tibsf!xijmtu!ju!jt!!6!tibsf!jo!dbtf!pg!Xftu!Joejb
Npufmt!Mue/
Gbdf!wbmvf!pg!tibsft!pg!cpui!uif!dpnqbojft!jt!!21/!Ibmg!uif!jowftunfout!pg!Bmm!Joejb!Npufmt!Mue/!sfqsftfout!tibsft
pg!Xftu!Joejb!Npufmt!Mue/!bu!qbje!vq!wbmvf/
Qbtt!ofdfttbsz!kpvsobm!fousjft!up!sfdpse!uif!bcpwf!usbotbdujpo!jo!uif!cpplt!pg!Bmm!Joejb!Npufmt!Mue/!boe!esbx!uif
Cbmbodf!Tiffu!pg!Bmm!Joejb!Npufmt!Mue/!bgufs!bctpscujpo!)bttvnjoh!uibu!uif!bnbmhbnbujpo!jo!uif!obuvsf!pg!qvsdibtf*/
29/ Uif!Cbmbodf!Tiffut!pg!Ipu!Mue/!boe!Dpme!Mue/!bt!po!42tu!Nbsdi-!3129!xfsf!bt!gpmmpxt!;
Balance Sheets of Hot Ltd. and Cold Ltd. as at 31st March, 2018
Opuf Ipu!Mue/ Dpme!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm!Ð!Frvjuz!Tibsf!pg!!21!fbdi! 27-11-111 7-11-111
! ! ! ! ! ! ! ! ! ! ! ! ! 21&!Qsfgfsfodf!Tibsf!Dbqjubm!pg!!211!fbdi Ð 5-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð! Hfofsbm!Sftfswf 7-11-111 3-11-111
Qspgju!boe!Mptt!Bddpvou 4-11-111 2-51-111
)b*!Usbef!Qbzbcmft!Ð!Tvoesz!Dsfejupst 5-11-111 7-11-111
UPUBM 3:-11-111 2:-51-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
Cvjmejoh 5-11-111 3-11-111
Gvsojuvsf 3-11-111 2-31-111
Nbdijofsz 21-11-111 7-11-111
)c*!Opo.dvssfou!jowftunfout!Ð!23-111!Frvjuz!Tibsft!jo!Dpme!Mue/ 2-31-111 Ð
)b*!Jowfoupsjft 4-11-111 4-91-111
)c*!Usbef!sfdfjwbcmft!Ð!Tvoesz!Efcupst 8-11-111 6-11-111
)d*!Dbti!boe!dbti!frvjwbmfout 2-91-111 2-51-111
UPUBM 3:-11-111 2:-51-111
Ipu!Mue/!ibt!ublfo!pwfs!uif!foujsf!voefsubljoh!pg!Dpme!Mue/!po!41ui!Tfqufncfs-!3129/!Uif!qptjujpo!pg!dvssfou!bttfut
boe!dvssfou!mjbcjmjujft!fydfqu!dbti!boe!cbol!cbmbodft!bt!po!uibu!ebuf!xbt!bt!voefs!;! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !\gjhvsft!jo!^
Qbsujdvmbst Ipu!Mue/ Dpme!Mue/
Jowfoupsjft 3-51-111 4-11-111
Tvoesz!Efcupst 8-71-111 6-11-111
Tvoesz!Dsfejupst 4-71-111 5-31-111
Qspgjut!fbsofe!gps!uif!ibmg.zfbs!foefe!po!41ui!Tfqufncfs-!3129!xfsf!;!
Ipu!Mue/!Ð!!3-16-111<!Dpme!Mue/!Ð!!2-19-111/
Uif!bcpwf!qspgjut!ibwf!cffo!bssjwfe!bu!bgufs!dibshjoh!efqsfdjbujpo!bu!6&!qfs!boovn!po!cvjmejoh-!26&!qfs!boovn!po
nbdijofsz!boe!21&!qfs!boovn!po!gvsojuvsf/
Po!41ui!Bvhvtu-!3129!cpui!dpnqbojft!efdmbsfe!boe!qbje!26&!ejwjefoe!po!frvjuz!tibsft!gps!3127.28/!Hppexjmm!pg
Dpme!Mue/!ibt!cffo!wbmvfe!bu!!2-11-111!boe!puifs!gjyfe!bttfut!bu!21&!bcpwf!uifjs!cppl!wbmvft!po!42tu!Nbsdi-!3128/
Qsfgfsfodf!tibsfipmefst!pg!Dpme!Mue/!bsf!up!cf!bmmpuufe!21&!qsfgfsfodf!tibsft!pg!!211!fbdi!pg!Ipu!Mue/!boe!frvjuz
tibsfipmefst!pg!Dpme!Mue/!bsf!up!sfdfjwf!sfrvjtjuf!ovncfs!pg!frvjuz!tibsft!pg!Ipu!Mue/!wbmvfe!bu!!26!qfs!tibsf!jo
tbujtgbdujpo!pg!uifjs!dmbjnt/
Qsfqbsf!uif!Cbmbodf!Tiffu!pg!Ipu!Mue/!bt!pg!41ui!Tfqufncfs-!3129!bttvnjoh!bctpscujpo!jt!uispvhiu!cz!uibu!ebuf/
2:/ C!Mue/!jt!bctpscfe!cz!B!Mue/!po!42tu!Nbsdi-!3129!po!uif!cbtjt!pg!uif!gpmmpxjoh!Cbmbodf!Tiffut!;
Balance Sheet of A Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!3-11-111!Frvjuz!Tibsf!pg!!6!fbdi!gvmmz!qbje 21-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Hfofsbm!Sftfswf 3-61-111
UPUBM 26-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
Gbdupsz!Tife 6-11-111
Nbdijofsz 4-11-111
Gvsojuvsf 61-111
)c*!Opo.dvssfou!jowftunfout!;
611!Tibsft!jo!C!Mue/ 61-111
Efcfouvst!jo!C!Mue/ 61-111
Puifst 81-111
)c*!Usbef!sfdfjwbcmft 3-11-111
)d*!Dbti!boe!dbti!frvjwbmfout 71-111
UPUBM 26-11-111
Balance Sheet of B Ltd. as at 31st March, 2018
Opuf Bnpvou
Qbsujdvmbst Op/ )*
)2* )3* )4*
)b*!Tibsf!Dbqjubm!Ð!6-111!Frvjuz!Tibsft!pg!!211!fbdi!gvmmz!qbje 6-11-111
)c*!Sftfswft!boe!Tvsqmvt!Ð!Qspgju!boe!Mptt!Bddpvou )2-31-111*
)b*!Mpoh.ufsn!cpsspxjoht!Ð!7&!Efcfouvsft!)!2-111!fbdi* 4-11-111
UPUBM :-91-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut! Ð
)c*!Opo.dvssfou!jowftunfout!Ð!51-111!Frvjuz!Tibsft!jo!B!Mue/ 3-11-111
)c*!Usbef!sfdfjwbcmft!Ð!Tvoesz!Efcupst 3-61-111
UPUBM :-91-111
Uif!gpmmpxjoh!jt!uif!tdifnf!pg!bctpsqujpo!;
)j* Qsjps!up!bctpsqujpo!B!Mue/!xbt!up!efdmbsf!b!ejwjefoe!pg!36&/
)jj* Gps!fwfsz!tibsf!jo!C!Mue/!25!gvmmz!qbje.vq!frvjuz!tibsft!jo!B!Mue/!xfsf!up!cf!jttvfe/
)jjj* Gps!fbdi!efcfouvsf!jo!C!Mue/!21-!8203&!qsfgfsfodf!tibsft!pg!!211!fbdi!pg!B!Mue/!xfsf!up!cf!jttvfe!bt!gvmmz!qbje/
Ejsfdupst!pg!B!Mue/!efdjefe!up!sfwbmvf!uif!tibsft!jo!C!Mue/!bddpsejoh!up!uifjs!jousjotjd!wbmvf!kvtu!cfgpsf!bctpsqujpo/
Esbx.vq!Cbmbodf!Tiffu!pg!B!Mue/!bgufs!bctpsqujpo!jt!dpnqmfufe/!Tipx!ofdfttbsz!xpsljoht/
31/ Gpmmpxjoh!bsf!uif!Cbmbodf!Tiffut!pg!B!Mue/!boe!C!Mue/!bt!po!42/4/3129!;
Opuf B!Mue/ C!Mue/
)2* )3* )4* )5*
)b*!Tibsf!Dbqjubm )2* 51-11-111 21-11-111
)b*!Mpoh.ufsn!Cpsspxjoht
)b*!Puifs!Dvssfou!Mjbcjmjujft 41-11-111 2-11-111
)c*!Tipsu.ufsn!Qspwjtjpot!Ð! Qspwjtjpo!gps!Uby Ð 2-11-111
Qspqptfe!Ejwjefoe Ð 2-11-111
UPUBM 2-11-11-111 29-11-111
JJ/!BTTFUT
)b*!Gjyfe!Bttfut
! ! ! ! ! ! )j*! !Ubohjcmf!Bttfut!Ð!Mboe!boe!Cvjmejoh 41-11-111 5-11-111
)c*!Opo.dvssfou!jowftunfout 6-11-111 Ð
)b*!Puifs!Dvssfou!Bttfut 76-11-111 25-11-111
UPUBM 2-11-11-111 29-11-111
Notes to Accounts :
)2*!Tibsf!Dbqjubm
)* )*
51-11-111 21-11-111
C!Mue/!jt!up!cf!bctpscfe!cz!B!Mue/!po!uif!gpmmpxjoh!ufsnt!;
)2* C!Mue/!efdmbsft!b!ejwjefoe!pg!21&!cfgpsf!bctpsqujpo!gps!uif!qbznfou!pg!xijdi!ju!jt!up!sfubjo!tvggjdjfou!bnpvou!pg
dbti/
)3* Gps!uif!qvsqptf!pg!bctpsqujpo!fbdi!tibsf!pg!C!Mue/!jt!xpsui!!83/61/
)4* Uif!qvsdibtf!dpotjefsbujpo!jt!tbujtgjfe!cz!uif!jttvf!pg!gvmmz!qbje.vq!tibsft!pg!!211!fbdi!jo!B!Mue/
)5* Bmm!bttfut!boe!mjbcjmjujft!bsf!ublfo!pwfs!bu!cppl!wbmvf!fydfqu!gjyfe!bttfut!boe!tupdl/!Gjyfe!bttfut!xfsf!wbmvfe!bu
!4-61-111/
Gpmmpxjoh!gvsuifs!jogpsnbujpo!jt!bmtp!up!cf!ublfo!joup!dpotjefsbujpo!;
)b* B!Mue/!ipmet!6-111!tibsft!pg!C!Mue/!bu!b!dptu!pg!!4-11-111/
)c* Uif!tupdlt!pg!C!Mue/!jodmvef!jufnt!wbmvfe!bu!!2-11-111!qvsdibtfe!gspn!B!Mue/!)dptu!up!B!Mue/!!86-111*/
)d* Uif!dsfejupst!pg!C!Mue/!jodmvef!!61-111!evf!up!B!Mue/
Tipx!Mfehfs!Bddpvout!jo!uif!cpplt!pg!C!Mue/!up!hjwf!fggfdu!pg!uif!bcpwf!boe!Cbmbodf!Tiffu!pg!B!Mue/!bgufs!dpnqmfujpo
pg!uif!bctpsqujpo/
Guide to Answers
Multiple Choice
2/!D<!3/!C<!4/!C<!5/!C<!6/!C/
Practical Question
2/ Qvsdibtf!dpotjefsbujpo!!71-11-111/
3/ Qvsdibtf!dpotjefsbujpoÐ!22-11-111/
4/ Qvsdibtf!dpotjefsbujpoÐ!4-71-111/
5/ Qvsdibtf!dpotjefsbujpo!Ð!!43-91-111/
6/ Sfbmjtbujpo!MpttÐ!31-111/
7/ Qvsdibtf!dpotjefsbujpoÐ!3-56-111<!Sfbmjtbujpo!MpttÐ!!9-111/
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Advance Accounting - Amalgamation 20 PDF

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Real Life Focus

Motive for Amalgamation

Requirement of the Companies Act, 2013 in Respect of Mergers / Amalgamation

Accounting for Amalgamation

Solution Calculation of Purchase Consideration

Calculation of Purchase Consideration of Moon Ltd.

Methods of Accounting for Amalgamation

Pooling of Interests Method

Accounting Entries in the Books of the Transferor Company

2. For transferring different liabilities to Realisation Account

3. For transferring Equity Share Capital, Reserve and Surplus, etc.

Tibsft!jo![!Mue/!B0d! Es/ 2-31-111

In the books of Y Ltd.

In the books of Z Ltd.

Tvoesz!Frvjuz!Tibsfipmefst!B0d Es/ 25-111

Mjrvjebups!pg!B!Mue!B0d Es/ 2-87-111

Solution Calculation of Purchase Consideration

In the books of A Ltd.

Dr. AB Ltd. Account Cr.

Dr. Equity Shares in AB Ltd. Account Cr.

Dr. Cash Account Cr.

Dr. Equity Shares in AB Ltd. Account Cr.

Mjrvjebups!pg!C!Mue!B0d Es/ 2-31-111

(3) In the books of Sunmoon Ltd.

Dr. AB Ltd. Account Cr.

Dr. Equity Shares in AB Ltd. Account Cr.

Dr. Cash Account Cr.

In the books of B Limited

Dr. AB Ltd. Account Cr.

Dr. Equity Shares in AB Ltd. Account Cr.

Dr. Cash Account Cr.

Mjrvjebups!pg!B!Mue!B0d Es/ 5-61-111

Inter-Company Debts and Inventories

Tibsft!jo!Tubs!Mue/!B0d Es/ 31-11-111

In the books of Star Ltd.

Tvoesz!Dsfejupst!B0d Es/ 2-61-111

In the books of Y Ltd.

In the books of XY Ltd.

Mjrvjebups!pg!Y!Mue/!B0d Es/ 5-11-111

Dr. AB Ltd. Account Cr.

(ii) In the books of AB Ltd.

Criticisms of Pooling of Interests Method

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2. For transferring different liabilities to Realisation Account

3. For transferring Equity Share Capital, Reserve and Surplus, etc.

Accounting Entries in the Books of the Transferee Company

Solution Calculation of Purchase Consideration

K/!Mue/!B0d Es/ 8-73-111

Jowfoupsjft!B0d Es/ 8-11-111

Solution (i) Calculation of Purchase Consideration

Dr. Equity Shareholders Account Cr.

Mjrvjebups!pg!Z!Mue!B0d Es/ 62-91-111

In the books of P Ltd.

Dr. PK Ltd. Account Cr.

Dr. Preference Shareholders Account Cr.

Dr. Equity Shareholders Account Cr.

Jowfoupsjft!B0d Es/ 2-71-111

Dr. Sun Ltd. Account Cr.

Dr. Equity Shares in Sun Ltd. Account Cr.

In the books of Sun Ltd.

:&!Efcfouvsft!jo!Nppo!Mue!B0d Es/ 86-111