EXERCISE

1. State whether the following are True' or False':

(a) Amalgamation and Acquisition are synonymous terms.
(b) Truly speaking, there is only one type of amalgamation, i.e., Amaigam
ation in the nature of merger.
(c) Pooling of interest method is applied in case of amalgamation in the
nature of merger.
(d) When the amalgamation is in the nature of purchase, the assets and
liabilities are always stated in the books of transferee company at book
values.
(e) In case of amalgamation in the nature of merger, equity shareholders of
the combining entities continue to have a proportionate share in the
combined equity.
() Payment made to the creditors in final settlement of the transferor
company is not included in purchase consideration for amalgamation
(Ans : (a) True; (b) False: (c) True: (d) False: (e) True: (0 True]
 CORPORATE ACCOUNTING
4.74

appropriate word(s):
2. Fill in the blanks with deals with 'Accounting for Anmalgam.
Standard
(a) The Accounting
ations'. company is amalgamated, is caled
which another
(b) The company into
company
of amalgamation is to get the effect of
object
(c) The most important is opened in the books of Transferee
Account
(d) Amalgamation Adjustment company is having
company, when the transferor amalgamation in the
method is applied in case of
(e) Pooling of interest
nature of
As-14, there are methods of recording the entries for the
() Asper
assets and liabilities taken over.
AS 14; (b) Transteree; (c) Synergy; (d) Statutory Reserve,; (e) merger
[Ans : (a)
(0 two.)
correctness :
3. Examine the following statements and comment on their
AS 14.
(a) Amalgamation and Acquisition are the same as per
All the Shareholders of transferor company should become the
Share
(b)
holders of the transferee company, if it is an amalgamation in the nature
of merger.
(c) Pooling of interest method is applied if the amalgamation is in the nature
of purchase.
(d) If amalgamation is in the nature of purchase, assets and liabilities may
be shown at revalued figures.
(e) At the time of amalgamation of companies, purchase consideration can
be discharged out of the proceeds realised from the fresh issue of equity
shares.

Short Answer Type:

1. Give the meaning of amalgamation.
2. What is meant by absorption?
3. What is meant by acquisition
4. Mention the different types of amalgamation as per As -14.
5. Amalgamation in the nature of merger?
6. Amalgamation in the nature of purchase?
7. Mention the different methods of ascertaining the consideration for
amalgamation.
 AMALGAMATION OF COMPANIEs 4.75

Long Answer Type:

1. When is an amalgamation considered as amalgamation (9) in the nature of
merger and (ii) in the nature of purchase ?
2. What is meant by consideration for amalgamation as per AS-14?
3. Distinguish between amalgamation in the nature of merger and amalgamation
in the nature of purchase ?
4. Write a note on treatment of realisation expenses at the time of amalgamation
of companies ?
5. Discuss the legal and accountingaspects of settlement of accounts of dissenting
shareholders.
6 What are the conditions which according to As-14 on 'Accounting for
Amalgamations' must be satisfied for an amalgamation in the nature of merger?
7. Explain: () treatment of reserves on amalgamation as per AS-14 (ii)
amalgamation in the nature of merger.
8. Explain the meaning and requirement of amalgamation as per AS-14.
9. State the types of amalgamation. Explain the accounting treatment for
amalgamation in the nature of merger and amalgamation in the nature of
merger.
10. Describe the types and objectives of merger and amalgamation.
Practical Problems:
1. B Ltd. is taken over by A Ltd. As per the terms of amalgamation,the consideration
for amalgamation is to be discharged on the basis of intrinsic value of shares
of B. Ltd. The share capital of B Ltd. consists of 30,000 Equity shares of 10
18.
each and the intrinsic value of Equity shares of BLtd. is
Calculate the consideration for amalgamation.
[Ans : 5,40,000]
X Ltd. and Y Ltd., the shareholders of
2. In ascheme of amalgamation involving held in Y Ltd., (Y Ltd. having a share
Y Ltd. are to get for every 4 shares
Equity shares of 10each), as under :
capital of ? 4,00,000 divided into
equity shares of ? 10 each at par of XLtd.
(i) 16 in cash;and (iü) 3 consideration.
Calculate the amount of purchase
[Ans : 4,60,000]
assets
amalgamation involving X Ltd. and Y Ltd., the value of and
3. Ina scheme of amount payable to creditors is? 1,45,000
8,65,000 and
of YLtd. is ?
10,000. Ascertain the amount of consideration for
to debentureholders ? 1,
amalgamation.
[Ans : 6,10,000]
 cORPORATE ACcOUNTING

4.76
over by Nemcare Ltd. which is having 50,000 equity
Ltd. is taken make the following payments
4. Dulu Healthcare each. Namecare Ltd. agrees to
shares of 10 Dulu Healthcare Ltd.
per share for every share held in
() Cash @4.50 debentures of Dulu Healthcare Ltd. at 8
9%
(ii)Discharge of 1,00,000 debentures in Nemcare Ltd. at par.
premium by issuing 10% Healthcare Ltd. in final settlement
creditors of Dulu
(iüi) 60,000cash to
of their account.
consideration for amalgamation as per AS-14
Compute the amount of purchase
[Ans : 2,25,000]
having 60,000 Equity shares of 10
5. A Ltd. is taken over by B Ltd. which is
each. Mohan Ltd. agrees to make the following payments:
Ltd.
() Cash @5 per share for every share held in A
(ii) Issue two equity shares of 10 each at par for every three equity
shares held in Anand Ltd.
(iüi) Discharge of ? 1,00,000, 14% debentures of A Ltd. at 8% premium by
issuing 12% Debentures in B Ltd. at par, and
(iv) 1,30,000 cash to creditors of Anand Ltd. in final settlement of their
account.

Determine the amountof purchase consideration for amalgamation as per AS-14.

[Ans : 7,00,000]
6. M Ltd. is taken over by N Ltd. on the following terms and conditions
() The assets of MLtd. are valued at 9,70,000.
(ii) The liabilities of M Ltd. are valued at 2,80,000.
(i) ? 1,90,000 in cash is paid to the shareholders of MLtd.
(iv) The balance of consideration is discharged by issue of shares of 10
each at 15 per share.
Show how the purchase consideration for amalgamation is
discharged by N Ltd.
[Ans : 6,90,000]
7. From the following information, ascertain the
amount of General Reserve to be
shown in the balance sheet ofA Ltd. after
amalgamation:
(a) The assets and liabilities of B Ltd. are
toexist after amalgamation. taken over by A Ltd which will cease
(b) General Reserve appearing in the books of A
are ?80,000 and Ltd. and BLtd. respectively
?1,10,000 respectively.
 AMALGAMATION OF COMPANIES 4.77

(c) Consideration to be paid to BLtd. for the amalgamation is ? 5,60,000.

(d) Total paid up Share capital of BLtd. is 4,80,000.
(Ans: 1, 10,000)
to be
8. From the following information, ascertain the amount of General Reserve
shown in the balance sheet of X Ltd. after amalgamation:
(a) X Ltd takes over all assets and liabilities of Y Ltd. and Y Ltd ceases to
exist.
(b) The Purchase Consideration for the take over is agreed at ? 4,40,000
(c) Total of agreed value of Sundry Assets taken over of YLtd.? 740,000 and
the Liabilities taken over consists of Sundry Creditors 90,000 and Other
Current Liabilities 30,000
XLtd. on the date of
(d) General Reserve appearing in the books of
amalgamation ? 2,50,000..
[Ans: 4,30, 000]
Mohan Ltd. as on 31st March, 2019
9. The following is the Balance Sheet of
Balance Sheets as at 31st March, 2019:
Amount R)
Particulars
1. ASSETS:
(1) Non-Current Assets: 2,40,000
Equipment
(a) Property, Plant and 45,000
(b)Goodwill
(2) Current Assets: 95,000
(a) Inventory 2,30,000
(b) Trade Receivables 10,000
Cash Equivalents
(c) Cash and Total Assets
6,20,000

LIABILITIES:
ID. EQUITY &
(A)EQUITY:
(a) ShareCapital: 3,00,000
fully paid
....Equity Shares of 10 each
60,000
(b) Other Equlty:
General Reserve 1,25,000
the Statement of Profit & Loss 50,000
75,000
Surplus in
Less:Preliminary Expenses
 CORPORATE ACCOUNTING

4.78

(B)LIABILITIES:
(1) Current Liablities: 1,85,000
Sundry Creditors 6,20,000
Trade Payables : and Liabilities
Total Equlty
Ltd. The consideration is to be
Ltd. takes over Mohan per share and
Onthat date Sarabhai Equity shares of 10 each at ? 14
discharged by issuing 20,000
Preference Shares of . 100
each at par
2,500, 9% Convertible
amalgamation.
Ascertain the consideration for
|Ans : 4,30, 000) Y Ltd as at 31-3-2019 were as follows:
X Ltd. and
10. The balance sheets of
Balance Sheet
X Ltd. Y Ltd.
Particulars

LASSETS:
(1) Non-Current Assets |2,00,000 2,30,000
(2) Current Assets |3,00,000 2,70,000

TotalAssets |5,00,000 5,00,000

1. EQUITY & LIABILITIES:
(A) EQUITY:
(a) Share Capital:
Equity Shares of 10 each fuly paid 1,00,000 1,50,000
(B) LIABILITIES:
(1) Current Liabilities:
Trade Payables : Sundry Creditors 4,00,000 3,50,000
Total Equity and Liabilities 5,00,000 5,00,000
XY Ltd. was formed to takeover X Ltd. and Y
? 10of XY Ltd. were issued. To Ltd. and in exchange shares OT
arrtve
of XLtd. and Y Ltd. were valued at at the purchase consideration, sundry asses
7,00,000 and ? 5,50,000 respectively.
Ascertain thepurchase consideration and the
at par to the
shareholders of X Ltd. and Y Ltd, ifnumber of shares to be issueo
increased. Also Calculate the exchange ratio. issued share capital was nos
[Ans: Consideration for amalgamation payable to YLtd. 8,00,000]
purchase cash ? to LIABILITIES:(B) I1. ASSETS: I. 11.
2,000. half EQUITY: (A)
EQUITY Current
Assets:(2)
Give was Soft Liabilities:
Current(1) Equity:
Other(b) (a) Non-Current
Assets:(1) The
in Overdraft
(b) Bank(b) (a) Premium
Reserve 12,000 Equity Investment
(d) (cInventory
) (b) (a) Goodwill(b) (a)
BalanceSecurities
Profit following
journal just fully
in creditor A eye Other Property,
the Trade & CashTrade Furniture
Machinery
Plant
and Particulars
adequate paid Ltd. Prior LIABILITIES:
booksentries in
SharesShare and
for took Current
Payables: Receivables AMALGAMATION
OCOMPANIES
is OF
shares the to Plant the
Capital: Cash
of to to over
8,000 Incorporation
Statement of Balance
Softclosemeet and the Liabilities ? and
Total Equivalents
Sundry 10 : Equipment:
eye the agreed half
the
assets each Sundry
Equity Sheet
Ltbooks
d. claim of
to in ofOutstanding : Profit ASsets
Total
Creditors fully of
takecash. Som and Debtors Som
of of & paid
creditors.
Som shares The FaxLiabilities Loss
Fax
Fax expenses Ltd. Expenses
in Ltd.
Ltd. Soft for as
and eye on
1,10,000
of
also Ltd. 31st
liquidation
to The
record payable 1,77,000 (11,000) 1,20,000
Amount?)|March,
available 1,77,000
6,00030,00030,000 1,000 1,000 10,000
2,2,00020,00010,000 10,000 90,000
15,000
were 2019.
the as 4.79
 CORPORATE ACCOUNTING
4.80

absorb the business of Assam Iron Ore Ltd. as

12. Megha Iron Ltd. agreestototake over the assets and liabilities at their balance
on 31 March, 2019, and to issue 12 shares of . 10 each, for
sheet values, in exchange for which it is
100 each in Assam Iron Ore Co. Ltd. The balance sheeets of
every share of
the two companies were as follows:
Assam Ltd. Megha Ltd)
Particulars
. ASSETS:
(1) Non-Current Assets:
(a) Property, Plant and Equipment:
Land and buildings 3,00,000 5,00,000
Machinery and Plant 2,00,000 3,00,000
(b) Goodwill 1,00,000
(2) Current Assets:
(a) Inventory 25,000 1,20,000
(b) Trade Receivables: Sundry Debtors) 50,000 60,000
(c) Cash and Cash Equivalents (Cash at Bank) 35,000 1,00,000
Total Assets 6,10,000 11,80,000
. EQUITY & LIABILITIES:
(A) EQUITY:
(a) Share Capital:
5,000 Equity Shares of 100 each fully paid
1,00,000 Equity Shares of 10 each 5,00,000
(b) Other Equity: 10,00,000
Contingency fund
General Reserve 10,000
(B) LIABILITIES: 60,000
(1) Current Liabilities:
Trade Payables : Sundry
Creditors 1,00,000 1,20,000
Total Equity and Liabilities
Show the journalentries in the 6,10,000 11,80,000
absorbed. Prepare opening balance books of the Assam Iron
Ore Ltd. that is being
Method' and 'Pooling of Interest sheet of the Megha Iron Ltd. as per
[Ans: Purchase Method." 'Purchase
consideration
Goodwill under 'Purchase Method6,00,000; Profit on realisation
Pooling of Interest Method 90,000 and PA Statement 90,000; value o
(Dr.
Method 18,80,000 and under 1,00,000; Total of Balance Sheet balance) unoe
under 'Purchas
'Poolingg of Interest Method
18,30,000.)
 AMALGAMATION OF COMPANIES 4.81

13. The following are the balance sheets of Orchids Ltd. and
Fowers Ltd. as on
31-3-2016 on which date the two companies amalgamated on the following terms :
(a) The assets and liabilities of Orchids Ltd. are taken over by Flowers Ltd. at
the book values and Orchids Ltd. goes into liquidation.
(b) Apayment in cash at 70 for every debenture in Orchids Ltd. in full
discharge of the debentures.
(c) Sharesholders of Orchids Ltd. to get 7 equity shares in Flowers Ltd. of
10 each at a premium of 5 per share for every 2 shares in Orchids Ltd.
Showthe journal entries in the books of Flowers Ltd. and draw up the
balance sheet after amalgamation.
Particulars Orchids Ltd. Flowers Ltd.

I. ASSETS:
(1) Non-Current Assets:
3,80,000 7,10,000
Property, Plant and Equipmen
(2) Current Assets:
80,000 1,80,000
(a) Inventory 1,40,000 4,80,000
Debtors
(b) Trade Receivables : Sundry 20,000 1,80,000
(c) Cash and Cash Equivalents 15,50,000
6,20,000
Total Assets
LIABILITIES:
I. EQUITY &
(A) EQUITY: 15,00,000
Capital: 4,00,000
(a) Equity Share 10 each fully paid
of
Shares
.eeeee
30,000 20,000
(b) Other Equity:
General Reseve
(B)LIABILITIES:
(1)Non-current Liabilities:
50,000
Financial Liabilities
each
Debentures of 50 30,000
1,000, 6% 70,000
(2) Current Liabilities: Creditors
Sundry
Payables : 70,000
(a) Trade Liability: 15,50,000
Current
Employees' ProvidentFund
(b)Other 6,20,000
Liabilities
and
TotalEquity
 Consideration
(Ans.clearly. nal Supti
(B) . ASSETS: .
Particulars 14. 4.82
entries Liabilities:
Current(1) EQUITY:
(A)
EQUITY Current
Assets:(2)
Non-Current
Assets:
(1)
Purchase Show LtShakti d. LIABILITIES: Equity:
Other(b) (a) The
eee

tothe of Trade BalanceSurplus Equity Investments Goodwill following

record Lt
? d. &
Consideration necessary 10 Shares LIABILITIES:
each is TotalPayables
absorbed in in Share are
the Statement
acquisition for Equity Statement of (2,000 the
ledger every Capital:
: Balance
ACCOUNTING
CORPORATE
by Sundry 10 shares
96,000; accounts Supti and
5 of of each A8sets
Total
in shares Liabilities Profit Profit Sheet
the Ltd. Creditors fully in
Realisation books Purchase toheld & & paid
Shakti of
close Loss LOSs Supti
of in Ltd.)
the Shakti Ltd.
Supti
Consideration
Loss and
Ltd.books Ltd.
3,60,0001,00,000 Shakti
? Show of 2,00,000 3,60,000 2,80,000 Supt
Lt
id.
15,000] Shakti 60,000 24,000 56,000
also being Ltd.
the Ltd. as
4 Shaktis
Ltd. at
Purchase and shares 1,51,000 40,000 1,20,000 1,51,000 1,21,000
(9,000) 30,000 31.3
Jour
of 201n
 AMALGAMATION OF COMPANIES 4.83
15. Apex Ltd. took over the
Balance Sheet:
business of Summit Ltd. on the basis of the following

Particulars R in 000)
Amount R)
I. ASSETS:

(1) Non-Current Assets:

1,000
Investment in 15,000 shares of . 10 each in Apex Ltd. 300
(2) Current Assets:
(a) Inventory 700
(b) Trade Receivables : Debtors
1,450
(c) Cash & Cash Equivalents (Cash at
Bank) 50
Total ASsets 3,500
In. EQUITY &LIABILITIES:
(A) EQUITY:
(a) Equity Share Capital:
Shares of 10 each fully paid 1,000
(b) Other Equity:
Reserve 500

(B) LIABILITIES:
(1) Non-Current Liabilities:
Financial Liabilities
15% Debentures 1,000

(2) Current Liabilities:

800
(a) Trade Payables : Sundry Creditors
200
(b) Other Current Liabilities : For Tax
3,500
Total Equity and Liabilities

value of shares of Summit Ltd. is ? 20and that of Apex Ltd. 25. It

Ltd.,
The market of
Apex
Summit Ltd. will receive shares ofDebentures
that the shareholders
was decided
said rates. Debentureholders of Summit Ltd. shall receive
exchanged at the
the extent of 105% of their claim.
in Apex Ltd. to
accounts relating to the acquisition in the books of both
Prepare the necessary
the companies. 000:
16,25,000; Profit on Realisation 4,25,
Consideration
IAns. Purchase Investments 75,000.]
Appreciation in the value of
 4.84 CORPORATE ACCOUNTING

16. The followingwere the Balance Sheets of ALtd. and BLtd. as at 31.03.2019
Particulars A Ltd. BLtd
. ASSETS:
(1) Non-Current Assets:
Property, Plant and Equipment:
Land &Building 60,000
Plant &Machinery 1,40,000
Furniture 23,040
60,000
(2) Current Assets:
17,000
(a) Inventory 78,620
(b) Trade Receivables : Debtors 40,410
Bills Receivable
21,200 10,200
(c) Cash &Cash 800
Equivalents (Cash at Bank) 11,140 6,090
Total Assets
L. EQUITY & LIABILITIES: 3,34,000 |1,34,500
(A) EQUTY:
(a) Equity Share Capital:
Shares of 10 each fully paid
(b) Other Equity: 1,50,000 60,000
Security Premium Resrve
Foreign Project Reserve 30,000
General Reserve 3,100
Surplus in Statement of Profit & Loss 95,000 32,000
Less: Cost of issue of 28,700 8,250
(B) LIABILITIES: Debenture
(500)
(1) Non-current Liabilities:
Financial Liabilities :
10% Debentures
(3) Current Liablities: 20,000
(a) Trade Payables:
Sundry Creditors
Bils Payable 10,800 4,630
(b) Other Curent 1,200
Liabilities 18,300 7,020
Total Equlty and Liabilities
On 1st April, 3,34,0001,34,500
of merger. It was 2019, A. Ltd. took over B. Ltd. in an
agreed that in amalgamation
discharge of consideration
for
in the nature
acquisition, A. L
 I. ASSET3: I. 17. (Ans. ation Bils into woul ind
EQUITY: (A) Current
Assets:(2) Non-current B.
LlabilItlee:
Current(2) (0) EQUITY Assets:(1) negotiations, been X
(a) following
Balance amounting You 12%
ted Show Equlty:
Other(b) Goodwill
(c) (b) Sheets: Purchase Ltd.,
Receivable Ltd. allot
Equlty Inventory
(c) (b) (a) OtherMachinery Building
Land &
Property, formed e
(b) (a) arDebentures
how Trade Reserve
Surplus Fund & CashTrade Partlculars and
It 3
required
Pass
was fully
consideration Y Prepare to
the LIABILITIES:
Share Intangible the to
held also
paid
Payables in Shares & Plant Ltd., AMALGAMATION
? COMPANIES OF
amount
lance Receivables
Cash assets take Journal to by in
al Statement over have A. 10,000 B. agreedAEquity
Capltal:
of assets and Ltd.'s Ltd. Ltd.
Sheet Tot al : 10 Equivalents of entries were that
payable Sundry
1, Assets
Total Equipment: the
the agreed Were of shares
: 90,000. Balance
0,] oftoEqulty of each
Debtors Patents : tw
combined o in borne
the 10%
to the sameA of?
the Creditors Profit companies Ltd.'
Debentures
new each and fully amalgamate.BalancoSheetBooks bys
& amount 10
company paid concern A.
ompany. LIabilitles Loss merger.
after acceptances. Ltd.
each
have of
sheet A.
as a Lt d. and in at
is been on new total B.per
arrived 31st and denomination. Ltd for
agreedcompany Expenses
1,13,000 1,00,000 Ltd. X Wouldevery
at 8,000 5,000
1,13,000 12,00015,000 11,000 20,00050,000
5,000 March, 4,58,600]
and as
shown XY of be 2
prepare 2019. 50% shares
25,000
30,000 Ltd. Y Ltd. , armalgam converted
65,000 1,0002,000
2000 5,000 of 4.85
65,000 5,000 5,0005,000 50,000 in
the After has
the the hekd
 CORPORATE ACCOUNTING
4.86

18. On 31st March, 2019, Amal Ltd. was absorbed by Bimal Ltd., the later taking over
all the assets andliabilities of the former at book values. The Consideration for the
transferee compDanwi
business was fixed at 4,00,000 to be discharged by the distributed among the
the form of its fully paid equity shares of 10each, to be getting two shares for
shareholders of the transferor company,each shareholder
of the hwn
every share held in the transferor company. The balance sheets
companies as on 31st March, 2019 stoOod as under:
Particulars Amal Ltd. Bimal Ltd

I. ASSETS:
(1) Non-Current Assets:
(a) Propety, Plant and Equipment:
Plant and machinery 4,12,000 |1,00,000
Furniture 80,000 30,000
(b) Goodwill 2,00,000 60,000
(2) Current Assets:
(a) Inventory 2,65,500 60,000
(b) Trade Receivables : Debtors 2,21,200 46,000
(c) Cash & cash Equivalents:
Cash in Hand 869 356
Cash at Bank 14,000 8,300
(d) Other Current Assets
Pre-paid Insurance 700
Income Tax Refund Claim 6,000

Total Assets 11,93,569 3,11,356

I1. EQUITY & LIABILITIES:

(A) EQUITY:
(a) Equity Share Capital:
Shares of R10 each fully paid 9,00,000 2,00,000
(b) Other Equity:
Workmen's compensation fund 12,000 9,000
General Reserve 1,80,000 50,000
Surplus in the Statement of Profit &Loss 20,502 12,900
 LIABILITIES:(B) I. ASSETS: I. 19.
EQUITY:
(A) Current
Assets:(2) LIABILITIES:(B)
Liabilities:
Current(1) EQUITY Non-Current
Assets:(1) On Liabilities:
Current(1)
Equity:
Other(b) (a)
Trade (cInventory
) (b) (a) Property, 31st
Reserve
General
Securities
Surplus Premium
Reserve Equity (c) (b) (a)
fixtures
Machinery
CashTrade Furniture and Plant
and
Particulars
ayables 15,000LIABILITIES: & March, ProvisionOtherTrade
in Share and
Receivables Plant Total current COMPANIESOF
Statement Cash 2019, PayablesAMALGAMATION
Shares and of
: Equity
Sundry Capital: the taxation
Equivalents Equipment: liability
tal of balance
of and Sundry :
? Sundry :
ityreditors Profit 10 Liabilities Staff :
each Assets
Total(Cash
sheet Creditors
& Debtors
and provident
Loss fully of
at A
ies Ltd.
paid Bank)
stood fund

as
11,93,569
follows: 12,30010,20058,567

Amount()
,154 1,50,000 2,82,154 1,61,000 3,11,356
36,074 18,53062,55015,000 11,32019,84470,550 19,440
5,0004,00030,456
4.87
 CORPORATE ACCOUNTING
4.88
of B Ltd. for t 66,000 payable in the
over the business shareholders of B Ltd. gettino
Onthis date, ALtd. took 10 each at par,
shares of amalgamation
form of its fully paid equity 100 sharesheld in B Ltd. The scheme of
110 shares of ALtd. for every debentures of B Ltd. would be converted into eoual
also provided that 300, 11% of? 100 each. The balance sheet of B Ltd. on the
number of 12% debentures of A Ltd.
follows:
date of amalgamation wasas
Amount (
Particulars

I. ASSETS:
(1) Non-Current Assets:
Property, Plant and Equipment: 55,000
Machinery
Furniture 13,520
(2) Current Assets:
(a) Inventory 31,580
(b) Trade Receivables : Sundry Debtors 12,930
(c) Cash and Cash Equivalent 7,436
Total Assets 1,20,466
M. EQUTY & LIABILITIES:
(A) EQUITY:
(a) Equity Share Capital:
6,000 Shares of ? 10 each fully paid 60,000
(b) Other Equity:
Capital Reserve 1,300
Foreign Project Reserve 970
General Reserve 7,535
Surplus in Statement of Profit & Loss 2,413
(B) LIABILITIES:
(1) Non-current Liabilities:
Financial Liabilities :
300, 11% Debentures of 100 each 30,000
(2) Current Liabilities:
Trade Payables : Sundry Creditors 18,248
Total Equlty and Llabiltles 1,20,466
You are required to
(i) pass journal entries in the books of ALtd. assuming that the amalgamation
isin the nature of merger, and
() prepare realisation account and equity shareholders account in BLtd 's ledger.
[Ans: Loss on Realisation Account 6,218]