Mary Bula Ltd. agreed to acquire the goodwill and assets other than cash of Narayan Ltd. as on 31st March, 2018.  The summarised Balance Sheet of Narayan Ltd. as on that date was as follows :The consideration payable by Mary Bula Ltd. was agreed as follows : 
(a) A cash payment equal to ₹3.50 for each share of ₹10 each in Narayan Ltd.

(b) The issue of 45,000 ₹10 fully paid share of Mary Bula having an agreed value of ₹12.50 per share.

(c) The issue of such amount of 14% Debentures of Mary Bula Ltd., at 4% discount as is sufficient to discharge the 11% Debentures of Narayan Ltd. at a premium of 20%. The liabilities of Narayan Ltd. other than the Debentures were discharged by that company. When computing the  agreed consideration the management of Mary Bula Ltd., valued the land and building at ₹1,68,000. Plant and  machinery at ₹4,50,000, Stock-in-trade at ₹70,000, and the Debtors at their face values subject to an allowance of  4% to cover doubtful debts. 

Show the necessary Ledger Accounts in the books of Narayan Ltd. and draft Journal Entries required in the books of  Mary Bula Ltd. Show details of purchase consideration.

Transcribed Image Text:

I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (4) Current Liabilities: (a) Trade Payables Balance Sheet of Narayan Ltd. as at 31st March, 2018 (a) Long-term Borrowings - 12% Debentures TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets TOTAL Particulars (i) Tangible Assets (i) Intangible Assets ---- Goodwill (2) Current Assets: (a) Inventories (b) Trade Receivables (c) Cash and Cash Equivalents Note No. (2) EN Amount (₹) (3) 3,00,000 1,40,000 50,000 20,000 5,10,000 3,20,000 50,000 80,000 30,000 30,000 5,10,000