Dr 10,000 10,000 6 Cancellation of inter company owings Sundry Creditors A/C To Sundry Debtors A/C W1 Bank: [Bank Balance of Unsigned Ltd.] Balance as per Balance Sheet Add : Dividend received from Signed Ltd (10% on 50,000) Less Dividend paid on Share capital (10% on 3,00,000) 40,000 5,000 (30,000) 15,000 W2 12% Debentures of Unsigned Ltd. Payable at 8% premium 1.50.000 1,50,000 x 108% = 1,62,000 973 Q. 21. The following are the balance sheets of AB Ltd. and XY Ltd. as on 30.06.2010. XY Ltd. XY Ltd. AB Ltd. Rs. AB Ltd. Rs. 2,000 1,000 850 Liabilities Rs. Share capital Equity Shares of Rs.100 each fully paid up Reserves and Surplus 10% debentures Loan from Financial Institutions Bank Overdraft Sundry Creditors Proposed Dividend Total Assets Rs. Fixed Assets (net of depreciation) Investments Sundry Debtors Cash and Bank Profit and Loss A/C 2,700 700 400 250 150 800 500 800 250 400 100 300 300 200 4,050 1,800 Total 4,050 1,800 It was decided that XY Ltd. will acquire the business of AB Ltd. for enjoying the benefit of carry forward of business loss. After acquisition, XY Ltd. will be renamed as Z Ltd. The following scheme has been approved for the merger. i. XY Ltd. will reduce its shares to Rs. 10 and then consolidate 10 such shares into one share of Rs. 100 each (New Share). ii. Financial institutions agreed to waive 15% of the loan of XY Ltd. ii. Shareholders of AB Ltd. will be given one new share of XY Ltd. in exchange of every share held in AB Ltd. iv. AB Ltd. will cancel 20% holdings of XY Ltd. Investments were held at Rs. 250 thousands. V. After merger, the proposed dividend of AB Ltd. will be paid to the shareholders of AB Ltd. vi. Authorised Capital of XY Ltd. will be raised accordingly to carry out the scheme.vii. Sundry creditors of XY Ltd. includes payables to AB Ltd. Rs. 1,00,000. Pass the necessary entries to implement the scheme in the books of AB Ltd. and XY Ltd. and prepare a Balance Sheet of Z Ltd