Model: Accounting entries in both the books of purchasing company and vendor.
Doss Ltd. was formed with a nominal capital of Rs.20,00,000 consisting of 1,00,000 equity shares of Rs.20 each and 6,000 preference shares of Rs.100 each to acquire on 1 April 2011, the business of Yoga & Co. Yoga’s balance sheet as on 31 March 2011 was as follows:
|
Liabilities |
Assets |
||
|
Capital A/c: |
Land & Buildings |
5,00,000 |
|
|
Yoga & Co. |
9,00,000 |
Plant & Machinery |
3,00,000 |
|
Trade Creditors |
2,50,000 |
Stock |
2,00,000 |
|
Overdraft (Bank) |
1,00,000 |
Debtors |
2,50,000 |
|
12,50,000 |
12,50,000 |
The Company took over all the assets and assumed all the liabilities and the consideration was fixed at Rs.13,00,000.
In computing this figure, Land & Buildings were valued at Rs.7,00,000; Plant & Machinery at Rs.2,00,000; Stock at Rs.1,90,000; and debtors at book value subject to an allowance of 5% to cover bad debts. The transfer of the bank overdraft to the company was agreed by the bank on condition that debentures for Rs.1,50,000 were issued to the bank as collateral security.
The purchase price was settled by issue of 50,000 equity shares of Rs.20 each at par, 2,000 preference shares of Rs.100 each and the balance being paid in cash. Doss Ltd. paid the preliminary expendes of Rs.20,000. You are required to record journal entries in the books of Doss Ltd. and Yoga & Co.
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
