Given below are the Balance Sheets of A Ltd. and P Ltd. as on 31st March. 2016. On this date A Ltd. absorbs P Ltd. A Ltd. P Ltd. I. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : 10% 1,000 Pref. Shares of $ 100 each Equity Shares of $ 10 each fully paid (b) Reserves and Surplus : Dividend Equalisation Reserve General Reserve Surplus A/c (subject to payment of dividend on equity and preference shares) 1,00,000 10,00,000 8,00,000 1,00,000 80,000 20,000 1,90,000 (2) Non-current Liabilities Debentures 1,20,000 (3) Current Liabilities Bills Payable Other Liabilities 20,000 1,80,000 1,80,000 Total Equity and Liabilities 14,00,000 13,90,000 п. Аssets (1) Non-eurrent Assets Fixed Assets 6,00,000 8,00,000 Investments at Cost : 2,000 Equity Shares of P Ltd. @ $ 12 each Debentures of P Ltd. (Face Value $ 40,000) 24,000 36,000 Other Investments 20,000 (2) Current Assets 7,20,000 Bills Receivable 10,000 5,80,000 Others Totał Assets | 14,00,000 13,90,000 The whole of the undertaking of P Ltd. Is taken over by A Ltd. On the following basis : 1. The equity shareholders of P Ltd. To get in A Ltd. Equity Shares of $ 10 each on the intrinsic value of shares of P Ltd. After the Equity Dividends @ 12% are paid by P Ltd. 2. Preference shareholders and debenture holders of P Ltd. To get respectively Preference Shares of $ 100 each and Debenture Stock of equal value in A Ltd. Half of the bills payable of A Ltd. Consist of bills drawn by P Ltd. Current assets of P Ltd. Include debts of $ 4,000 which are to be written off. Show the Balance Sheet of A Ltd. After absorption.
Given below are the Balance Sheets of A Ltd. and P Ltd. as on 31st March. 2016. On this date A Ltd. absorbs P Ltd. A Ltd. P Ltd. I. Equity and Liabilities (1) Shareholders' Funds (a) Share Capital : 10% 1,000 Pref. Shares of $ 100 each Equity Shares of $ 10 each fully paid (b) Reserves and Surplus : Dividend Equalisation Reserve General Reserve Surplus A/c (subject to payment of dividend on equity and preference shares) 1,00,000 10,00,000 8,00,000 1,00,000 80,000 20,000 1,90,000 (2) Non-current Liabilities Debentures 1,20,000 (3) Current Liabilities Bills Payable Other Liabilities 20,000 1,80,000 1,80,000 Total Equity and Liabilities 14,00,000 13,90,000 п. Аssets (1) Non-eurrent Assets Fixed Assets 6,00,000 8,00,000 Investments at Cost : 2,000 Equity Shares of P Ltd. @ $ 12 each Debentures of P Ltd. (Face Value $ 40,000) 24,000 36,000 Other Investments 20,000 (2) Current Assets 7,20,000 Bills Receivable 10,000 5,80,000 Others Totał Assets | 14,00,000 13,90,000 The whole of the undertaking of P Ltd. Is taken over by A Ltd. On the following basis : 1. The equity shareholders of P Ltd. To get in A Ltd. Equity Shares of $ 10 each on the intrinsic value of shares of P Ltd. After the Equity Dividends @ 12% are paid by P Ltd. 2. Preference shareholders and debenture holders of P Ltd. To get respectively Preference Shares of $ 100 each and Debenture Stock of equal value in A Ltd. Half of the bills payable of A Ltd. Consist of bills drawn by P Ltd. Current assets of P Ltd. Include debts of $ 4,000 which are to be written off. Show the Balance Sheet of A Ltd. After absorption.
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter15: Contributed Capital
Section: Chapter Questions
Problem 10P: Comprehensive The shareholders equity section of Superior Corporations balance sheet as of December...
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Transcribed Image Text:Given below are the Balance Sheets of A Ltd. and P Ltd. as on 31st March.
2016. On this date A Ltd. absorbs P Ltd.
A Ltd.
P Ltd.
I. Equity and Liabilities
(1) Shareholders' Funds
(a) Share Capital :
10% 1,000 Pref. Shares of $ 100 each
Equity Shares of $ 10 each fully paid
(b) Reserves and Surplus :
Dividend Equalisation Reserve
General Reserve
Surplus A/c (subject to payment of dividend on equity
and preference shares)
1,00,000
10,00,000 8,00,000
1,00,000
80,000
20,000
1,90,000
(2) Non-current Liabilities
Debentures
1,20,000
(3) Current Liabilities
Bills Payable-
20,000
Other Liabilities
1,80,000 1,80,000
Total Equity and Liabilities
14,00,000 13,90,000
п. Аssets
(1) Non-eurrent Assets
Fixed Assets
6,00,000 8,00,000
Investments at Cost :
2,000 Equity Shares of P Ltd. @ $ 12 each
Debentures of P Ltd. (Face Value $ 40,000)
24,000
36,000
20,000
7,20,000
Other Investments
(2) Current Assets
10,000
5,80,000
Bills Receivable
Others
Totał Assets
| 14,00,000 13,90,000
The whole of the undertaking of P Ltd. Is taken over by A Ltd. On the following basis :
1. The equity shareholders of P Ltd. To get in A Ltd. Equity Shares of $ 10 each on the intrinsic
value of shares of P Ltd. After the Equity Dividends @ 12% are paid by P Ltd.
2. Preference shareholders and debenture holders of P Ltd. To get respectively Preference Shares
of $ 100 each and Debenture Stock of equal value in A Ltd. Half of the bills payable of A Ltd.
Consist of bills drawn by P Ltd. Current assets of P Ltd. Include debts of $ 4,000 which are to be
written off. Show the Balance Sheet of A Ltd. After absorption.
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