Page 70 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Unit 4: Amalgamation: Accounting Treatment

shyam co. ltd.’s a/c notes
particulars ` particulars `
To Realisation A/c 32,40,000 By Shares in Shyam Co. Ltd. 30,00,000
By Bank A/c 2,40,000
32,40,000 32,40,000
(ii) In the Books of Shyam Co. Ltd.

Journal entries
Date particulars l.f. Dr. (`) cr. (`)
(i) Business Purchase A/c Dr. 32,40,000
To Liquidators of Radhe Ltd. 32,40,000
(Being purchase consideration due to the Liquidators of
Radhe Ltd.)
(ii) Land & Building A/c Dr. 6,00,000
Plant & Machinery A/c Dr. 13,40,000
Stocks A/c Dr. 9,00,000
Debtors A/c Dr. 5,00,000
Goodwill A/c Dr. 3,20,000
To Creditors A/c 4,20,000

To Business Purchase A/c 32,40,000
(Being above assets and liabilities taken over and balance
transferred to Goodwill account)
(iii) Liquidators of Radhe Co. Ltd., Dr. 32,40,000
To Bank A/c 2,40,000
To Share Capital A/c 20,00,000
To Premium on Share Capital A/c 10,00,000
(Being payment of purchase consideration in cash, and
issuing of shares on premium)
(iv) Goodwill A/c Dr. 20,000
To Bank A/c 20,000
(Being payment of winding up of Radhe Ltd.)

Balance sheet of shyam co. ltd.
(after absorption of radhe ltd.)
liabilities ` assets `
Share Capital (2,00,000) Land & Buildings 6,00,000

Shares of ` 10 each 20,00,000 Plant & Machinery 13,40,000
Share Premium 10,00,000 Stock 9,00,000
Creditors 4,20,000 Debtors 5,00,000
Bank overdraft 2,60,000 Goodwill (320,000+20,000) 3,40,000
36,80,000 36,80,000

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