Illustration 38 AX Ltd and BX Ltd. amalgamated from 14 January, 20X2. A new Company ABX Lid with shares of 10 each was formed to take over the businesses of the existing companies Summarized Balance Sheet as on 31-12-20X1 in 1000 ASSETS Note No. AX Ltd BX Ltd Non-current assets Property, Plant and Equipment 8.500 7,500 RUSI 1.250 1 Financial assets Investment 1,050 550 Current assets Inventory 2.750 Financial assets Trade recevables 1,800 4,000 Cash and Cash equivalent 450 400 13.050 15.200 EQUITY AND LIABILITIES Equity Equity share capital (of face value of ? 10 each) 6.000 7.000 Other equity 3.050 2,700 Llabilities Non-current abilities Financial abilities Borrowings (12% Debentures) 3.000 4.000 Current liabilities Financial abilities Trade payables 1.000 1.500 13.050 15,200 Note: Other equity AX Ltd BX Ltd General Reserve 1,500 2.000 Profit & Loss 1,000 500 Investment Allowance Reserve 500 100 Export Profit Reserve 50 100 3,050 2.700 ABX Ltd. issued requisite number of shares to discharge the claims of the equity shareholders of the transferor companies. Also the new debentures were issued in exchange of the old series of both the companies. Prepare a nate showing purchase consideration and discharge thereof and draft the Balance Sheet of ABX Lid a Assuming that both the entities are under common control Assuming BX Ltd is a larger entity and their management will take the control of the entity ABX Lid The fair value of net assets of AX and BX limited are as follows: 1. 120 FINANCIAL DEPORTING AX Lid. 000) 9.500 Assets Property. Plant and Equipment Inventory Fair value of the business BX Ltd. ('000) 1,000 2.900 14,000 1,300 11.000