Help me in this question

IPCC 868 views 2 replies

Kanhaiya

Nangia & Co.

1981 Points Joined July 2011

The following is the Balance Sheet of 'A' Ltd. as on 31.3.2007:

Liabilities	Rs.	Assets	Rs.
14,000 Equity Shares of Rs. 100 each fully paid General Reserve 10% Debentures Sundry Creditors Bank Overdrafts Bills payable	14,00,000 10,000 2,00,000 2,00,000 50,000 40,000	Sundry Assets Discount on issue of Debentures Preliminary Expenses P & L A/c	18,00,000 10,000 30,000 60,000
	19,00,000		19,00,000

‘R’ Ltd. agreed to take over the business of 'A' Ltd. Calculate purchase consideration under Net Assets method on the basis of the following:

The market value of 75% of the Sundry Assets is estimated to be 12% more than the book value and that of the remaining 25% at 8% less than the book value. The liabilities at book values. There is an unrecorded liability of Rs. 25,000.