Self-test In the following question, Top Ltd acquires Bottom Ltd.

It acquires all the assets, except the bank account. In addition it assumes responsibility for the creditors. The purchase price is £30,000 of which 27,000

£1 ordinary shares are issued at par and the balance paid in cash.

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

Top Ltd Bottom Ltd Equipment 30,000 17,000 Motor vehicles 15,000 8,000 Office fixtures 3,0000 48,000 25,000 Current assets Stock 6,000 3,000 Debtors 7,200 1,100 Cash at bank 9,800 1,700 23,000 5,800 Less creditors 7,000 16,000 1,800 4,000 64,000 29,000 Ordinary shares 50,000 25,000 Revenue reserves 14,000 4,000 64,000 29,000