1, The business of the Asha Ltd was purchased by Usha Ltd .

The purchase consideration was as follows:

1) A payment in cash at Rs 40 for every share in the Asha Ltd.
2) An exchange of 4 shares in the Usha Ltd . Of Rs 50 each at the market value of Rs 80 for every share in
the Asha Ltd .
A further payment in cash of Rs 110 for every debenture in the Asha Ltd . The balance sheet of Asha Ltd as on
31/3/2023 was as follows.

Liabilities Rs Assets Rs
Capital: Building 75,000
1000shares of Rs 200 Machinery 1,50,000
each 2,00,000 Stock 90,000
1000debentures of Rs Debtors 80,000
100 each 1,00,000 Bank 35,000
Creditors 30,000
Reserves 65,000
Workmen’s savings bank
A/c 10,000
P/l A/c 25,000

4,30,000 4,30,000
Prepare the necessary Ledger Accounts in the books of Asha Ltd and opening entries in the books of Usha Ltd
under purchase method .

2, The following are the Balance sheet of Akash and vikas Ltd as on 31/3/2023:

Liabilities Akash Vikas Assets Akash Vikas

Equity share Land and 5,00,000 3,10,000
capital (Rs 10 buildings
each) 10,00,000 6,00,000
14% pref. Shares Plant and 6,50,000 3,40,000
capital of (Rs machinery
100each) 4,40,000 3,40,000
General Reserve 1,00,000 50,000 Furniture & 1,15,000 70,000
fittings
Export profit Investment 2,50,000 1,90,000
reserve 60,000 40,000
Investment Stock 1,80,000 2,06,000
allowance reserve - 20,000
P&L A/c 1,50,000 1,00,000 Debtors 1,45,000 1,04,000
13% Debentures Cash & bank 1,40,000 1,00,000
Rs 100 each 1,00,000 70,000
Current liabilities 1,30,000 1,00,000
19,80,000 13,20,000 19,80,000 13,20,000
Akash Ltd takes over vikas Ltd on 1-4-2023. Akash Ltd discharges the purchase consideration as below:
1, Issued 70,000 Equity Shares of Rs 10 each at par to the Equity share holders of vikas Ltd .
2, Issued 15% preference shares of Rs 100 each to discharge the preference share holders of Vikas Ltd at 10%
premium.
The Debentures of vikas Ltd will be converted into equivalent number of debentures of Akash Ltd .
The statutory Reserve of vikas Ltd (Export – profit reserve and investment allowance reserve) are to be
maintained for three more years .
You are required to show the journal entries and balance sheet in the books of Akash Ltd assuming that the
amalgamation is in the nature of merger.

3, RK Ltd , and SK Ltd agreed to amalgamate and form a new company called RKS Ltd . The purchase
consideration is agreed at Rs 12,00,000 for RK Ltd and Rs 14,40,000 for SK Ltd to be settled by the issue of
Equity shares at a premium of 20%. The assets and liabilities taken over by RKS Ltd is as under :

Particulars RK Ltd SK Ltd

Land and buildings 8,00,000 6,00,000
Plant and machinery 5,00,000 5,50,000
Furniture and fixtures 3,00,000 5,00,000
Stock and Debtors 2,00,000 2,50,000
Cash &Bank 1,00,000 1,50,000
Creditors 1,50,000 3,00,000
Bank overdraft 50,000 1,00,000
Bank loan 1,50,000 1,50,000
15% Debentures 4,00,000 3,00,000
You are required to pass Journal Entries and prepare opening Balance sheet in the books of RKS Ltd, under the
assumption that the amalgamation is in the nature of merger (polling of interest).

4, Following is the balance sheet of Rama Ltd on 31/3/2023

Liabilities Rs Assets Rs
Share capital Buildings 1,50,000
30000 shares of Rs 10
each fully paid 3,00,000
General Reserve 10,000 Machinery 1,00,000
Profit and loss A/c 20,000 Stock 35,000
Sundry creditors 50,000 Debtors 70,000
Bank 5,000
Preliminary expense 20,000
3,80,000 3,80,000
Leela Ltd acquired the business of Rama Ltd and agreed to take over the assets except the debtors and cash
but took over no liabilities . However agree to pay sundry creditors out of the collections of sundry Debtors
which amounted to Rs 65,000.
Leela Ltd discharged the purchase consideration by allotment of 10 Equity share for every 20 shares held in
Rama Ltd of Rs10 each at a market price of Rs 20 each and Rs 5 in cash for every share in Rama Ltd and the
expenses of liquidation amounted to Rs 5,000 .show necessary Ledger Accounts to close the books of Rama
Ltd and prepare Balance sheet in the books of Leela Ltd after acquisition.

5, On 1-4-2023 X Ltd and Y Ltd were amalgamated into “Z” Ltd on the basis of the following balance sheet.

Liabilities X Ltd Y Ltd Assets X Ltd Y Ltd

Paid -up capital 44,800 35,000 Goodwill 16,000 6,400
Creditors 1,000 1,200 Buildings 10,000 12,000
Reserves 1,600 2,400 Plant 8,200 2,000
P&L A/c 2,200 8,00 Stock 8,400 6,600
Debtors 4,600 8,000
Cash 2,400 4,400
49,600 39,400 49,600 39,400
Additional particulars:

 Buildings of both companies to be written off by 10%.

 Provide 5% RBD on debtors of both the companies.
 Goodwill to be valued at Rs 9,300 & 3,000.
 The entire amount of purchase consideration was discharged by the allotment of shares.
 ‘Z’ Ltd agrees to take over the remaining assets and liabilities at the book value.
 ‘Z’ Ltd paid liquidation expenses Rs 5,000 and 4,000 respectively as apart of purchase consideration.
Prepare necessary Ledger Accounts in the books of X Ltd and Y Ltd .