| b) |
The following is the Balance Sheet of 'A' Ltd. as on 31.3.2007:
‘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. |
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sundry assents = 1512000+414000=1926000,where 152000=75% of 1800000+12% and 414000=25% of 1800000- 8%
caclculation of PC
sundry assets= 1926000
less liabilities
10%deb 200000+creditors200000+bank overdraft50000+bills payable 40000+unrecorded liab 25000=515000
P.C= 1926000-515000=1411000
thanks boss actually i was confused regarding the unrecorded liability treatment
thanks for helping me .
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