the company purchased buildings worth rs 4 80 000 pass journal entries in the books 618269

Ajay & Co. Ltd. was incorporated to acquire the business of Vivek whose balance sheet was as follows:

Liabilities

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Assets

Creditors

24,000

Land

1,44,000

Capital

4,80,000

Furniture

30,000

Stock

2,34,000

Debtors

54,000

Bank

42,000

5,04,000

5,04,000

The purchase consideration was agreed at Rs.6,00,000 which was to be paid as:

  1. 16,800 equity shares of Rs.20 each
  2. Rs.2,04,000 in preference shares of Rs.100 each and
  3. the balance in cash

The company raised further capital by issue of 45,000 equity shares of Rs.20 each payable 10 on application and Rs.10 on allotment. After receipt of all the money for shares issued, the company purchased buildings worth Rs.4,80,000. Pass journal entries in the books of the company and prepare the balance sheet.

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