Page 81 - DCOM205_ACCOUNTING_FOR_COMPANIES_II

Accounting for Companies – II

notes 8. Write short notes on the following:
(a) Dissenting shareholders.

(b) Pooling of Internal method.
(c) Purchase consideration.
(d) Amalgamation in the nature of purchase.
(e) Amalgamation in the nature of merger.
9. The Sun Company Limited and the Stars Company Limited have agreed to amalgamate.
A new company Universal Company Limited has been formed to take over the combined
concerns as on 31 March, 2011. After negotiations, the assets of the two companies have
st
been agreed at as shown in the following Balance Sheets:

the sun company limited
liabilities ` assets `
Issued Capital: Land & Buildings 2,50,000
5,000 Equity shares of ` Machinery & Plant 1,00,000
100 each fully paid 5,00,000 Patents 55,000
Sundry Creditors 40,000 Stock 75,000
Profit & Loss A/c 25,000 Sundry Debtors 60,000
Cash at Bank 25,000
5,65,000 5,65,000

the stars company limited
liabilities ` assets `
Issued Capital: Land & Buildings 1,50,000
2,500 Equity shares Machinery & Plant 1,25,000
of ` 100 each. 2,50,000 Goodwill 25,000
Sundry Creditors 25,000 Stock 10,000
Reserve Fund 25,000 Sundry Debtors 10,000
Profit & Loss A/c 25,000 Cash at Bank 5,000
3,25,000 3,25,000
Show the amount payable to each company by the Universal Company Limited at the time
of amalgamation of these companies.
10. National Company Limited is absorbed by Universal Company Limited, the consideration
being the taking over of liabilities. The payment of cost of absorption as a part of purchase
consideration not exceeding ` 25,000 (actual cost ` 22,500), the payment of debentures of
` 2,50,000 at a premium of 10% in 13% Debentures issued at 96%, and the payment of ` 15
per share in cash and allotment of one 8% preference share of ` 10 each and 5 equity shares
of ` 10 each fully paid for every 4 shares in National Company Limited. The number of
shares of the National Company Limited is 2 lakhs of ` 10 each fully paid.
You are required to calculate the purchase consideration.

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