The summarized Balance Sheet of A Ltd. and B Ltd. as at 31 st March, 2025 are as under: Particulars A Ltd. B Ltd. Equity shares of 10 each, fully…

Journal Entries in the books of Z Ltd. Particulars Dr. (₹) Cr. (₹) 1) Business Purchase A/c Dr. 3,24,00,000 To Liquidator of A Ltd. A/c 3,24,00,000 2) Land and Building A/c Dr. 1,68,00,000 Plant and Machinery A/c Dr. 1,20,00,000 Long term advance to B Ltd. A/c Dr. 13,20,000 Inventories A/c Dr. 62,40,000 Trade Receivables A/c Dr. 49,20,000 Cash and Bank A/c Dr. 18,00,000 Goodwill A/c Dr. 73,20,000 To Retirement Gratuity Fund A/c 6,00,000 To 10% Debentures A/c 1,20,00,000 To Unsecured Loan A/c 36,00,000 To Trade Payables A/c 6,00,000 To Other Liabilities A/c 12,00,000 To Business Purchase A/c 3,24,00,000 3) 10% Debenture A/c Dr. 1,20,00,000 To 12% Debentures A/c 1,20,00,000 4) Liquidator of A Ltd. A/c Dr. 3,24,00,000 To Equity Share Capital A/c 1,62,00,000 To Securities Premium A/c 1,62,00,000 5) Business Purchase A/c Dr. 1,72,80,000 To Liquidator of B Ltd. A/c 1,72,80,000 6) Land and Building A/c Dr. 1,26,00,000 Plant and Machinery A/c Dr. 45,60,000 Inventories A/c Dr. 42,00,000 Trade Receivables A/c Dr. 31,20,000 Cash and Bank (less dividend) A/c Dr. 3,60,000 To Unsecured Loan A/c 49,20,000 To Trade Payables A/c 20,40,000 To Business Purchase A/c 1,72,80,000 To Capital Reserve. A/c 6,00,000 7) Liquidators of B Ltd. A/c Dr. 1,72,80,000 To Equity Share Capital A/c 86,40,000 To Securities Premium A/c 86,40,000 8) Unsecured Loans A/c Dr. 13,20,000 To Long term Advance to B Ltd. A/c 13,20,000 9) Capital Reserve A/c Dr. 6,00,000 To Cash & Bank A/c (Liquidation Exp.) 4,80,000 To Goodwill A/c 1,20,000 Balance Sheet of Z Ltd. as at 31 st March, 2025 Particulars Notes Amounts (₹) I] Equity and liabilities (1) Shareholder's funds (a) Share Capital 1 2,48,40,000 (b) Reserves and Surplus 2 2,48,40,000 (2) Non-Current liabilities (a) Long-term borrowings 3 1,20,00,000 (b) Long-term provisions 4 6,00,000 (3) Current liabilities (a) Short-term borrowings 5 72,00,000 (b) Trade Payables 6 26,40,000 (c) Other liability 12,00,000 Total 7,33,20,000 II] Assets (1) Non-Current assets (a) Property, Plant and Equipment 7 4,59,60,000 (b) Intangible Assets (73,20,000 – 1,20,000) 72,00,000 (2) Current Assets (a) Inventories 8 1,04,40,000 (b) Trade receivables 9 80,40,000 (c) Cash and Cash Equivalents 10 16,80,000 Total 7,33,20,000 Unsecured loans have been considered as short-term borrowings. Alternatively, it may be considered as long-term borrowings and presented accordingly. Notes to Accounts: Particulars Particulars ₹ 1. Share Capital Authorized Share Capital 36,00,000 Equity shares of 10each 3,60,00,000 Issued, Subscribed & Paid up 24,84,000 Equity Shares of 10each 2,48,40,000 (all these shares were issued for consideration other than cash) 2. Reserves and Surplus Securities Premium Account 2,48,40,000 (24,84,000 shares × 10) 3. Long-term borrowings 12% Debentures 1,20,00,000 4. Long Term Provisions Retirement gratuity fund 6,00,000 5. Short term borrowings Unsecured loans A Ltd. 36,00,000 B Ltd. 49,20,000 Less: Mutual (13,20,000) 72,00,000 6. Trade payables A Ltd. 6,00,000 B Ltd. 20,40,000 26,40,000 7. Property, Plant and Equipment Land and Building A Ltd. 1,68,00,000 B Ltd. 1,26,00,000 2,94,00,000 Plant and Machinery A Ltd. 1,20,00,000 B Ltd. 45,60,000 1,65,60,000 4,59,60,000 8. Inventories A Ltd. 62,40,000 B Ltd. 42,00,000 1,04,40,000 9. Trade receivables A Ltd. 49,20,000 B Ltd. 31,20,000 80,40,000 10. Cash and cash equivalents A Ltd. 18,00,000 B Ltd. [18,00,000 – 14,40,000 (dividend)] 3,60,000 21,60,000 Less: Liquidation Expenses (4,80,000) 16,80,000 Working Note 1 Calculation of amount of Purchase Consideration Particulars A Ltd. B Ltd. Existing shares 18,00,000 14,40,000 Agreed value per share 108 72 Purchase consideration 3,24,00,000 1,72,80,000 No. of shares to be issued of 20each (including 10premium) 16,20,000 8,64,000 Face value of shares at 10 1,62,00,000 86,40,000 Premium of shares at 10 1,62,00,000 86,40,000