assume that Top Ltd purchases Bottom Ltd for £120,000. Neither the bank account nor the liabilities to creditors are taken over by Top Ltd.

Prior to the acquisition it is agreed that the assets of Bottom Ltd will be revalued as follows:

Equipment £14,000 Vehicles £7,000 Stock £2,400 Debtors £900 Payment of the purchase price is as follows:

80,000 £1 ordinary shares issued at a premium of 40p each.

The balance in cash.

You are required to prepare the balance sheet of Top Ltd after the acquisition