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Surya Ltd. took over assets of ₹40,00,000 and liabilities of ₹7,50,000 of Moon Ltd. Surya Ltd. paid the purchase consideration by issuing 17,600 10% Preference Shares of ₹100 each at a premium of 25% and ₹12,00,000 by bank draft. Calculate the purchase consideration and pass the necessary Journal entries in the books of Surya Ltd.
Purchase consideration = (17,600 × ₹125) + ₹12,00,000 = ₹22,00,000 + ₹12,00,000 = ₹34,00,000.
JOURNAL (Books of Surya Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Assets A/c Dr. | 40,00,000 | |||
| Goodwill A/c Dr. | 1,50,000 | |||
| To Sundry Liabilities A/c | 7,50,000 | |||
| To Moon Ltd. | 34,00,000 | |||
| (Assets and liabilities of Moon Ltd. taken over; purchase consideration exceeds net assets acquired, ₹32,50,000, by ₹1,50,000, recognised as Goodwill) | ||||
| Moon Ltd. Dr. | 34,00,000 | |||
| To 10% Preference Share Capital A/c (17,600 × ₹100) | 17,60,000 | |||
| To Securities Premium Reserve A/c (17,600 × ₹25) | 4,40,000 | |||
| To Bank A/c | 12,00,000 | |||
| (Purchase consideration discharged by issuing 17,600 10% Preference Shares at a 25% premium and the balance by bank draft) |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 1 Q.44 - Share Capital", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 1 - Share Capital.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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