Cash COMPANY ACCOUNTING - ABSORPTION On Jan 1" 2010 GUL AHMAD Company absorbed by ALI BROTHERS on the following terms; All the assets and liabilities to be taken over by the absorbing company at book value. b) One new share of Rs.20 each for every two shares held to be issued to the ordinary shareholders of the old Co. Four new shares of Rs.20 each for every share held are, to be issued to the preference shareholders of the old Co. The debenture holders of the old company are to be issued new 6% debenture at a premium of 5% Balance sheet of Gul Ahmad Company was as under: EQUITIES ASSETS AUTHORIZED CAPITAL Rs.10,000 25,000 Ordinary shares @Rs.10/- each Rs.250,000 Accounts Receivable 20,000 5000, 5% pref. shares @Rs 100/- each Rs.500,000 Building 100,000 PAID UP CAPITAL Land 50,000 10000 Ordinary shares @Rs.10 each Rs.100,000 Profit and loss 52,000 1000, 5% pref, shares@Rs.100 each 5% Debenture payable 20.000 Accounts Payable 12,000 Total Rs.232,000 Total Rs.232,000 JIRED: a) Compute Purchase Consideration b) Record journal entries to close the books of Gul Ahmed Co. 100.000