16 Sundry Creditors Dr. 10,000 To Sundry Debtors 10.000 (Cancellation of mutual owing) (b) Statement of Consideration payable by A Ltd. Shares to be allotted 30,000/6 x 8 = 40,000 1.e. A Ltd. will issue 40,000 shares of 10 each 34,00,000 0 For 10% preference shares to be paid at 10% discount 1,00,000 x 90 390,000 (ii) 100 Consideration amount [6) + ()] 34,90,000 Note: It has been assumed that dividend on equity shares have been paid by both the companies Illustration 8 AX Ltd. and BX Ltd. amalgamated on and from 1st January, 2013. A new Company ABX Ltd. was formed to take over the businesses of the existing companies. Summarized Balance Sheet as on 31-12-2012 AX Ltd BX Ltd. AX Ltd. BX Ltd. Equity and Liabilities 7 000 7 000 Assets '000 7 000 Share Capital Sundry Fixed Equity Shares of Assets 85,00 * 10 each 60,00 70,00 Investment 10,50 5,50 General Reserve 15,00 20,00 Inventory 12,50 27,50 P&L A/C 10.00 5,00 Trade receivables 18,00 40,00 Investment Allowance Cash & Bank 4,50 4,00 Reserve 5,00 1,00 Export Profit Reserve 50 1,00 12% Debentures 30,00 40,00 Trade payables 10.00 15.00 130.50 152.00 130,50 152.00 75,00 ABX Ltd. issued requisite number of shares to discharge the claims of the equity shareholders of the transferor companies. You are required to prepare (i) Note showing purchase consideration and discharge thereof, (ii) Journal entries in the books of ABX Ltd. For taking over both companies, (ii) Balance Sheet of ABX Ltd. as on 19 January, 2013 assuming the amalgamation is in the nature of purchase