Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question 20: S. Ltd. is absorbed by P. Ltd. The draft balance sheet of S. Ltd. is as under: Balance Sheet Sundry Assets Share capital:
Question 20: S. Ltd. is absorbed by P. Ltd. The draft balance sheet of S. Ltd. is as under: Balance Sheet Sundry Assets Share capital: 13,00,000 2,000 7% Preference shares of 100 each (fully paid-up) 2,00,000 5,000 Equity shares of 100 5,00,000 each (fully paid-up) Reserves 3,00,000 6% Debentures 2,00,000 Trade payables 1,00,000 13,00,000 13,00,000 P. Ltd. has agreed: (i) to issue 9% Preference shares of 100 each, in the ratio of 3 shares of P. Ltd. for 4 preference shares in S. Ltd. (ii) to issue to the debenture-holders in S. Ltd. 8% Mortgage Debentures at 96 in lieu of 6% Debentures in S. Ltd. which are to be redeemed at a premium of 20%; (iii) to pay * 20 per share in cash and to issue six equity shares of 100 each (market value *125) in lieu of every five shares held in S. Ltd.; and (iv) to assume the liability to trade payables. You are required to calculate the purchase consideration
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started