2 Question 2.6 The financial positions of Chuks Plc and Jennifer Limited as at 31 March, 2018 are as shown below: Chuks Plc Jennifer Ltd N N Ordinary shares of N1 cach 1,200,000 500,000 Preference share of NI each 1,000,000 Retained Earnings 480,000 25.500 2.680,000 525,500 Debentures 500.000 150.000 3.180,000 675,500 Represented By: Land and Buildings 1,440,000 Plant and Machinery 960,000 150,000 Patent rights 345,000 Inventories 250,000 64,500 Trade Receivables 480,000 120,000 Cash and bank balances 320,000 48.000 Trade Payables (270.000) (52.000) 3.180,000 675,500 Jennifer Limited is to go into liquidation on 31 March, 2018 and Chuks Plc agreed to buy its assets as detailed below: 0 To pay N700,000 cash for the Patent rights (ii) Take over Plant and Machinery and inventories at their book values and book debts of face value less 10% (iii) To give N175,000 for the goodwill. (iv) The purchase consideration is to be further discharged by issue of 100,000 ordinary shares of Chuks Plc at a premium of 50 kobo and the allotment of such debentures in Chuks Ple that would give the debenture holders of Jennifer Limited the same amount of interest (v) The debentures eam interest at 3% and 4% for holders in Chuks Plc and Jennifer Limited respectively. You are required to prepare: (a) Necessary Journal entries in the books of Chuks Plc. (b) The statement of financial position immediately after the purchase. 2 Question 2.6 The financial positions of Chuks Plc and Jennifer Limited as at 31 March, 2018 are as shown below: Chuks Plc Jennifer Ltd N N Ordinary shares of N1 cach 1,200,000 500,000 Preference share of NI each 1,000,000 Retained Earnings 480,000 25.500 2.680,000 525,500 Debentures 500.000 150.000 3.180,000 675,500 Represented By: Land and Buildings 1,440,000 Plant and Machinery 960,000 150,000 Patent rights 345,000 Inventories 250,000 64,500 Trade Receivables 480,000 120,000 Cash and bank balances 320,000 48.000 Trade Payables (270.000) (52.000) 3.180,000 675,500 Jennifer Limited is to go into liquidation on 31 March, 2018 and Chuks Plc agreed to buy its assets as detailed below: 0 To pay N700,000 cash for the Patent rights (ii) Take over Plant and Machinery and inventories at their book values and book debts of face value less 10% (iii) To give N175,000 for the goodwill. (iv) The purchase consideration is to be further discharged by issue of 100,000 ordinary shares of Chuks Plc at a premium of 50 kobo and the allotment of such debentures in Chuks Ple that would give the debenture holders of Jennifer Limited the same amount of interest (v) The debentures eam interest at 3% and 4% for holders in Chuks Plc and Jennifer Limited respectively. You are required to prepare: (a) Necessary Journal entries in the books of Chuks Plc. (b) The statement of financial position immediately after the purchase