On 1st April, 2011, Deep Limited (DL) acquired the business of Cycle Limited (CL) by acquiring all the assets and liabilities. Land and building of CL was valued at ₹9,50,000 and furniture and fixtures at ₹2,00,000 and rest of the assets and liabilities at the book value. It agreed to discharge the purchase consideration as follows:

(i) To issue 1,80,000 equity shares of face value of ₹10 each to the equity shareholders of CL 

(ii) To issue requisite number of 10% preference shares of ₹10 at par so as to redeem 15% preference shares of CL at par

Show how purchase consideration will be calculated and the accounts will be shown in the books of both the companies.

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Liabilities Equity shares of face value * 10 each 15% Preference shares of 10 each General reserve P & La/c Investment Allowance Reserve Export profit reserve 12% Debentures Sundry creditor Other current liabilities Balance Sheet as on 31st March, 2011 Assets Land and building Plant and machinery Furniture & Fixtures Investment DL('000) CL('000) 2,500 1,500 1,100 250 375 150 250 225 100 4,950 850 125 250 50 100 175 175 75 3,300 Stock Debtors Cash DL('000) 1,250 1,625 288 350 625 450 362 4,950 CL('000) 775 850 175 250 475 515 260 3,300