you are required to pass journal entries and prepare balance sheet of xyz ltd assumi 618240

Model: Continuation of same set of books A and B carrying on business in partnership, sharing profits and losses in the ratio of 2:1 decide to dissolve the firm and sell the business to a limited company on 31 March 2011, the balance sheet of the firm stood on that date as follows:

Liabilities

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Rs.

Assets

Rs.

Sundry Creditors

2,25,000

Cash at Bank

40,000

Reserve Fund

2,25,000

Sundry Debtors

6,00,000

Capital Accounts:

Stock

8,10,000

A:7,00,000

Motor Vehicle

1,20,000

B:5,00.000

12,00,000

Furniture

80,000

16,50,000

16,50,000

XYZ Ltd. was registered with an authorized capital of Rs.50,00,000 in equity shares of Rs.100 each to acquire the above business on the following terms:

  1. Goodwill is valued at Rs.3,75,000
  2. Furniture and stock valued at Rs.72,500 and Rs.8,75,500, respectively
  3. Debtors are subject to Rs.provision.

Motor vehicle is no more required by the company and A took over at Rs.1,10,000. The purchase price was satisfied by the issue of shares of Rs.100 each at par. You are required to pass journal entries and prepare balance sheet of XYZ Ltd. assuming that the same set of books is continued.

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