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Unit 4: Amalgamation: Accounting Treatment
Less: Share Capital of Dong Ltd. notes
Equity Capital 1,80,000
Pref. Capital 60,000 2,40,000
Excess of Consideration 36,000
Excess of Consideration will be subtracted from the general reserve of Dong Ltd.
General Reserve 58,800
– Excess of Consideration 36,000
22,800
+ General Reserve of Ding Ltd. 2,76,600
2,99,400
Balance sheet of Ding limited as on 31 march, 2011
st
liabilities ` assets `
Share Capital: Fixed Assets 9,43,800
Equity capital (shares of ` 10 each) 6,90,000 Investments -
12% Preferences capital Current Assets, Loans and Advances
(Shares of ` 100 each) 66,000
Reserve & Surplus: Current Assets 3,58,200
General Reserve (calculated above) 2,99,400 Loans & Advances -
Statutory Reserve 30,900 Miscellaneous Expenditures -
Profit and Loss A/c 55,080
Secured Loans
13% Debentures 15,000
Unsecured Loans: -
Current Liabilities and Provisions
(a) Current Liabilities 1,45,620
(b) Provisions -
13,02,000 13,02,000
(b) When amalgamation is in the nature of purchase:
calculation of goodwill or capital reserve on amalgamation-
`
Fixed Assets of Dong Ltd. 2,83,800
+Current Assets of Dong Ltd. 1,18,200
Total of Assets 4,02,000
Less: External Liabilities
13% Debentures 15,000
Current Liabilities 59,400 74,400
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