(50,000) Less: Liabilities of P due to Q Less: Unrealised Profit on Inventory i.e. 10,000 x 20% Total Grand Total 12.000 1.61.500 1.08.600 2.70.100 3 Current Liabilities P Q 14 Balances before amalgamation Less: Liabilities of P due to Q Total Grand Total 6.23.500 5,57,600 (50.000) 5.73.500 557,600 11.31.100 Illustration 5 X Ltd. and Y Ltd. were amalgamated on and from 14 April, 2012 and formed a new company Z Ltd. to takeover the business of X Ltd. and Y Ltd. The summarized Balance Sheets of X Ltd. and Y Ltd., as on 31st March, 2012 are as follows: (in Crores) Liabilities X Ltd Y Lid. Assets X Ltd. Y Ltd. Share Capital: Land and Buildings 38 25 Equity share of 10 each 50 45 Plant and Machinery 24 17 10% Preference shares of 100 20 14 Investments 10 6 each Revaluation Reserve 10 6 Inventory 22 15 General Reserve 12 Investment Allowance 5 4 Trade Receivable 30 24 Reserve Cash at Bank 16 13 Profit & Loss Account 8 6 15% Debentures of 100 each 4 5 (Secured) Trade payable 31 12 140 100 140 100 Additional Information: (1) Z Ltd. will issue 6 equity shares for 10 equity shares of X Ltd. and 2 equity shares for 5 equity shares of B Ltd. The shares are issued @ 730 each having a face value of 10 per share. (2) Preference shareholders of two companies are issued equivalent number of 15% preference shares of Z Ltd. at a price of 120 per share (face value 100). (3) 15% Debentureholders of X Ltd. and Y Ltd. are discharged by Z Ltd. issuing such number of its 18% Debentures of 100 each so as to maintain the same amount of interest. (4) Investment allowance reserve is to be maintained for 4 more years. Prepare the Balance Sheet of Z Ltd, after amalgamation. The amalgamation took place in the nature of purchase