The balance sheet of Hubble Ltd as at 31 May (19 times 0) is shown below. Hubble
Question:
The balance sheet of Hubble Ltd as at 31 May \(19 \times 0\) is shown below.
Hubble Ltd agreed to purchase at this date the freehold premises, plant and machinery and stock of A Bubble at agreed valuations of \(£ 100,000, £ 10,000\) and \(£ 55,000\), respectively. The purchase price was to be fully settled by the issue to Bubble of 120,000 ordinary shares of \(£ 1\) each in Hubble Ltd, and a cash payment to Bubble of \(£ 25,000\). Bubble was to collect his debts and to pay his creditors.
Hubble Ltd sold one of its own premises prior to taking over Bubble for \(£ 75,000\) (cost \(£ 55,000\) ) and revalued the remainder at \(£ 400,000\) (excluding those acquired from Bubble).
You are required to
(a) show the journal entries, including cash items, in the books of Hubble Ltd to give effect to the above transactions; and
(b) show the balance sheet of Hubble Ltd after completing them.
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