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Accounting for Companies – II
notes Balance sheet as on 31st march, 2006
liabilities ` assets `
Share Capital: Fixed Assets:
Authorised Machinery 70,000
20,000 shares of ` 10 each 2,00,000 Current Assets:
Issued and paid up Stock 68,700
Capital (13,600; 10% Bank Balance 50,000
Preference shares of ` 10 each) 1,36,000 Debtors 62,000
3,000 Equity shares of ` 10 each 30,000
Current Liabilities:
Sundry Creditors 64,700
Bills Payable 20,000
2,50,700 2,50,700
Task Discuss the entries that are recorded in the books of vendor at the time of sale
of business.
self assessment
Choose the correct answer from the following options:
11. Excess of net assets over purchase consideration is:
(a) Goodwill
(b) Capital reserve
(c) Premium
(d) Dividend
12. If, after the sale of a partnership firm, the partners want to receive the dividends in future
in a profit sharing ratio, equity shares received from the company must be distributed in
the ratio of:
(a) Capital
(b) Final claim
(c) Profit-sharing
(d) No. of shares given in memorandum.
13. Purchase consideration is determined by:
(a) Shareholders
(b) Promoters
(c) Debenture-holder and creditors
(d) Mutual Agreement.
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