the purchase consideration will be payable partly in shares of rs 10 each and party 609153

L, M and N were partners in a business sharing profits and losses in the ratio of 2:1:1. Their Balance Sheet as at Dec 31, 2009 was as follows:

On Jan 1, it is agreed among the partners that Supriya & Co, Ltd, a newly formed company with M and N having each taken up 50 shares of Rs 10 each will take over the firm as a going concern including goodwill but excluding cash and bank balances.

The following points are also agreed upon:

1. Good will be valued at three years purchase of super profits.
2. The actual profit for the purpose of goodwill valuation will be Rs 50,000.
3. Normal rate of return will be 15% on fixed capital.
4. All other assets and liabilities will be taken over at book values.
5. The purchase consideration will be payable partly in shares of Rs 10 each and party in cash. Payment in cash being to meet the requirement to discharge L who has agreed to retire.
6. M and N are to acquire equal interest in the new company. Prepare necessary ledger accounts.
7. Express of liquidation amount to Rs 20,000. Prepare necessary ledger accounts.