Page 17 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

Notes To 10% Debentures Account 2,50,000
To Bank Account 74,750
(Being payment of purchase consideration to
Rohan & Sons)
Bank account Dr. 79,750
To Bank Loan Account 79,750
(Being bank loan raised for the part payment of
purchase consideration and realisation exps.)
Goodwill Account Dr. 5,000
To Bank Account 5,000
(Being payment of realisation expenses of
Rohan & Sons)
Share Premium Account Dr. 25,000
To Discount on Issue of Debentures Account 25,000
(Being discount on debentures written off against
share premium)

Balance Sheet of Khajura Limited
as on 1st January 2012
Liabilities ` Assets `
Share Capital: Fixed Assets:
Issued, Subscribed, Called up & Paid up Capital Good will (1, 25,000 + 5,000) 1,30,000
(30,000 Equity shares of ` 10 each) 3,00,000 Building 1,91,250
Patent & Machinery 3,60,000
Patents 13,500
Reserve & Surplus: Investments Nil
Share Premium Secured loans: 50,000 Current Assets: Stock 1,23,750
2,500; 10% Debentures of ` 100 each: 2,50,000 Sunday Debtors 1,46,250
Unsecured Loans:
Bank Loan 79,750
Current Liabilities:
Sundry Creditors 1,90,000
Bills Payable 95,000
9,64,750 9,64,750
Working Notes:

1. Calculation for valuation of goodwill–
Capital Employed = Capital + Revenue Reserve
= 5,00,000 + 50,000 = ` 5,50,000
Normal Profit = 8% of Capital Employed

= 5,50,000 × 8/100 = ` 44,000
Three years’ average profit (given) ` 75,250

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