The balance sheets of Hyper Limited (HL) and Fun Limited (FL) on 31st March, 2011 are as follows:

On the balance sheet date HL acquired the business of FL for which it agreed to pay the following purchase consideration on the date of business combination.

(i) HL to issue its one share for every two shares of FL.

(ii) The market price of HL’s shares on the date of business combination is ₹30 per share.

(iii) HL to pay ₹5 per share in cash for every one share of FL.

(iv) Further it is provided in the scheme of business combination that if combined entity reports a profit of ₹38,000 crore as half year’s profit on 30th September, 2011 then HL shall issue additional 80 crore shares to be valued at the fair value when such contingency is resolved.

Show how purchase consideration and different assets and liabilities should be recognized in the books of HL

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Liabilities Equity shares of face value * 10 each General reserve P & La/c Creditors Bills payable Balance Sheet as on 31st March, 2011 HL 1,50,000 63,000 39,000 36,000 12,000 3,00,000 FL 30,000 15,000 12,750 13,800 9,000 80,550 Assets Land and building Plant and machinery Stock Debtors Investment Bills receivables Bank Cash HL 1,05,000 75,000 30,000 45,000 30,000 3,000 9,000 3,000 3,00,000 (rupees in crores) FL 25,500 15,000 6,000 20,250 4,500 7,500 1,800 80,550