The balance sheet of Hubble Ltd as at 31 May 20X0 is shown below.

Hubble Ltd agreed to purchase at this date the freehold premises, plant and machinery and stock of A Bubble at agreed valuations of £100,000, £10,000 and £55,000, respectively. The purchase price was to be fully settled by the issue to Bubble of 120,000 ordinary shares of £1 each in Hubble Ltd, and a cash payment to Bubble of £25,000. Bubble was to collect his debts and to pay his creditors.

Hubble Ltd sold one of its own premises prior to taking over Bubble for £75,000 (cost £55,000) and revalued the remainder at £400,000 (excluding those acquired from Bubble).

You are required to:

(a) Show the journal entries, including cash items, in the books of Hubble Ltd to give effect to the above transactions; and

(b) Show the balance sheet of Hubble Ltd after completing them.

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Fixed assets Freehold premises at cost Plant and machinery at cost Less Depreciation £48,765 Motor vehicles at cost Less Depreciation £1,695 Current assets Stock-in-trade Debtors Cash in hand Hubble Ltd Authorised share capital 650,000 ordinary shares of £1 each Issued share capital 400,000 ordinary shares of £1 each fully paid Profit and loss account Current liabilities Trade creditors Bank overdraft E 102,550 96,340 105 63,200 38,175 £ 375,000 101,235 6,775 483,010 198,995 682,005 650,000 400,000 180,630 580,630 101,375 682,005