Page 22 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 1: Acquisition of Business

To Equity Shares 15,000 9,000 6,000 Machinery A/c notes
(profit on transfer) 5,000 3,000 2,000
1,35,150 85,710 49,440 1,35,150 85,710 49,440

(ii) calculation of additional drawing made by partners in cash
Total drawings made by partners `
(25,000 + 23,000 + 17,000) 65,000
+ Further funds available in bank for additional drawings (89,300 – 50,000) 39,300
1,04,300
– Interest on capitals paid (6,800 + 4,500 + 2,300) 13,600
Total drawings including additional drawings 90,700
statement of additional Drawings
A B C

` ` `
Drawings (divided into profit-sharing Ratio) 45,350 27,210 18,140
Add: Interest on capital 6,800 4,500 2,300
52,150 31,710 20,440
Less: Already drawn by partners 25,000 23,000 17,000
Amount of additional drawings 27,150 8,710 3,440

(iii) calculation for number of shares allotted to partners
` `
Machinery 70,000
Stock 68,700
Debtors 62,000
Bank balance (89,300 – 39,300) 50,000 2,50,700
less: Creditors 64,700
B/P. 20,000 84,700
Purchase Consideration 1,66,000
10% Preference shares given to partners (as they want at least 10% earnings fixed)
` `
A 68,000
B 45,000
C 23,000 1,36,000
Balance for equity shares 30,000
Equity shares of ` 30,000 will be allotted to partners in profit-sharing ratio

A 15,000
B 9,000
C 6,000

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