Page 126 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 6: External Reconstruction of Companies

(Being amount realised from debtors and loss on notes
realisation transferred to Realisation A/c)
Cash A/c Dr. 2,06,128
To Shares of Sunita Ltd. 79,280

To Profit on sale of shares of Sunita Ltd. 1,26,848
(Being 3,964 shares sold at profit)
Outstanding Bills A/c Dr. 3,50,000
To Cash A/c 3,50,000
(Being payment of non-trade liabilities)
Realisation A/c Dr. 4,92,400
Profit on sale of shares of Sunita Ltd. Dr. 1,26,848
To Equity Shareholders’ A/c 6, 19,248
(Being profit on sale of shares and Realisation
transferred to Equity Shareholders’ A/c)
Cash A/c Dr. 3,900
Shares in Sunita Ltd. Dr. 29, 98,500
To Sunita Ltd. 30, 02,400
(Being purchase consideration received partly
in cash and partly in shares)
Equity Shareholders’ A/c Dr. 29, 19,248
To Cash A/c 28
To Shares in Sunita Ltd. 29, 19,220
(Being final payment made to the equity
shareholders in 1, 45,961 shares of ` 20 and in
cash of ` 28)
Working Note:
(1) It is assumed that debtors are included in the current assets and loss on realisation of
debtors is transferred to realisation, which will be distributed among shareholders.

(2) Debtors can be realised through Realisation Account.
(3) Outstanding bills are not trade liabilities. Therefore, not taken over by the Sunita Ltd.
(4) Outstanding bills, first, will be paid from the amount realised from debtors and cash
received from Sunita Ltd. then, the rest will be paid from the sales proceeds of shares
in Sunita Ltd. by Kavita Ltd. Required sales proceeds of shares in Sunita Ltd. will be as
follows:

` `
Outstanding Bills 3,50,000
Less: Debtors Realisation 1,40,000
Cash received from Sunita Ltd. 3,900 1,43,900
Amount to be collected from the sale of shares 2,06,100
as the market price of one share is ` 52
To get ` 2,06,100, the number of shares to be sold =1/52×2,06,100=3,96,34=3,964 shares

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