A Ltd. and B Ltd. give the following information as at 31.03.2024: A Ltd. (in lakhs) B Ltd. (in lakhs) Equity Share Capital (Fully paid shares of 10…
CA Intermediate · Advanced Accounting · MTP · September 2024
A Ltd. and B Ltd. give the following information as at 31.03.2024: A Ltd. (in lakhs) B Ltd. (in lakhs) Equity Share Capital (Fully paid shares of 10 each) 22,500 9,000 Securities Premium 4,500 - Foreign Project Reserve - 465 General Reserve 14,550 4,800 Profit and Loss Account 4,305 1,162.5 12% Debentures - 1,500 Trade payables 1,800 694.5 Provisions 2,745 1,053 Land and Buildings 9,000 - Plant and Machinery 21,000 7,500 Furniture, Fixtures and Fittings 3,456 2,550 Inventory 11,793 6,061.5 Trade receivables 3,180 1,650 Cash at Bank 1,671 913.5 All the bills receivable held by B Ltd. were A Ltd.'s acceptances. On 1st April 2024, A Ltd. took over B Ltd. in an amalgamation in the nature of merger. It was agreed that in discharge of consideration for the business, A Ltd. would allot three fully paid equity shares of 10 each at par for every two shares held in B Ltd. It was also agreed that 12% debentures in B Ltd. would be converted into 13% debentures in A Ltd. of the same amount and denomination. Details of trade receivables and trade payables are as under: Particulars A Ltd. (in lakhs) B Ltd. (in lakhs) Trade Payables: Creditors 1,620 694.5 Bills Payable 180 - 1,800 694.5 Trade receivables: Debtors 3,180 1,530 Bills Receivables - 120 3,180 1,650 Expenses of amalgamation amounting to 1.5 lakhs were borne by A Ltd. You are required to: Prepare A Ltd.'s Balance Sheet immediately after the merger.
Suggested Answer and Working Notes:
Books of A Ltd. Balance Sheet of A Ltd. as at 1st April, 2024 (after merger) Particulars Notes ₹ (in lakhs) Equity and Liabilities 1 Shareholders' funds A Share capital 1 36,000 B Reserves and Surplus 2 24,981 2 Non-current liabilities A Long-term borrowings 3 1,500 3 Current liabilities A Trade Payables (1,800+694.5-120) 2,374.5 B Short-term provisions (2,745+1,053) 3,798 Total 68,653.5 Assets 1 Non-current assets A Property, Plant & Equipment 4 43,506 2 Current assets A Inventories (11,793+6,061.5) 17,854.5 B Trade receivables (3,180+1,650-120) 4,710 C Cash and cash equivalents (1,671+913.5-1.5) 2,583 Total 68,653.5 Notes to Accounts ₹ 1. Share Capital Equity share capital Authorized, issued, subscribed and paid-up: 36 crores equity shares of 10each (out of these shares, 13.5 crores shares have been issued for consideration other than cash) 36,000 2. Reserves and Surplus General Reserve 14,550 Securities Premium 4,500 Foreign Project Reserve 465 Profit and Loss Account ₹ (4,305 +1,162.5-1.5) 5,466 Total 24,981 3. Long-term borrowings Secured 13% Debentures 1,500 4. PPE Land & Buildings 9,000 Plant & Machinery 28,500 Furniture & Fittings 6,006 Total 43,506 Working Note: Computation of purchase consideration Purchase consideration was discharged in the form of three equity shares of A Ltd. for every two equity shares held in B Ltd. Purchase consideration = 9,000 lacs × 3/2 = 13,500 lacs
Topics: AS 14
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