Page 69 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes Profit and Loss A/c 60,000 Debtors 5,00,000
Debentures 3,00,000 Cash at Bank 60,000
Creditors 4,20,000 Preliminary Expenses 20,000
35,20,000 35,20,000
Shyam Company Limited took over the business of the above-mentioned company as on this
date except (Cash at Bank and Debentures for ` 32,40,000 payable as to ` 30,00,000 in the form
of fully paid 2,00,000 equity shares of ` 10 each at a premium of ` 5 per share and the balance in
cash. Radhe Company Limited redeemed its debentures at par. Expenses of winding up of Radhe
Limited came to ` 20,000 and were borne by Shyam Company Limited.

You are required to-
(i) Prepare Realisation Account, Equity Shareholders’ Account and Cash Account in the books
of Radhe Company Limited.
(ii) Pass journal entries in the books of Shyam Company Limited.

Solution
(i) in the books of radhe company ltd.

realisation account
particulars ` particulars `
To Goodwill A/c 1,00,000 By Debentures A/c 3,00,000
To Land & Building A/c 6,00,000 By Creditors A/c 4,20,000
To Plant & Machinery 13,40,000 By Shyam Ltd. 32,40,000
To Stock A/c 9,00,000
To Debtors A/c 5,00,000
To Bank A/c 3,00,000
To Equity Shareholders A/c (Profit) 2,20,000
39,60,000 39,60,000

equity shareholders’ account
particulars ` particulars `
To Preliminary Expenses A/c 20,000 By Equity Share Capital A/c 20,00,000
To Shares in Shyam By Reserves 7,40,000
Limited A/c 30,00,000 By Profit & Loss A/c 60,000
By Realisation A/c 2,20,000
30,20,000 30,20,000

cash a/c
particulars ` particulars `
To Balance b/d 60,000 By Realisation A/c
To Shyam Ltd. 2,40,000 (Payment to Debenture-holders) 3,00,000
3,00,000 3,00,000

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