Securities premium (1,25,000 shares x2) 2,50.000 Purchase consideration 15,00,000 Illustration 7 The following are the summarized Balance Sheets of A Ltd. and B Ltd. as on 31st December, 2011: Liabilities A Ltd BLtd. | Assets A Lid BLtd. 15 7 7,00,000 250,000 240,000 5,00.000 3.20,000 2,90,000 1.10,000 40.000 Share Capital Fixed Assets Equity Shares of Current Assets: 10 each 6,00,000 3,00,000 Inventory 10% Pref. Shares of 2100 Trade Receivable each 2,00,000 1,00,000 Reserves and Surplus 3.00.000 200.000 Cash at Bank Secured Loans 12% Debentures 200,000 1,50.000 Current Liabilities: Trade Payable 250.000 1.50.000 15,50,0001 9.00.000 Details of Trade receivables and trade payables are as under: 15,50.000 9.00.000 Trade payables A Ltd B Ltd. Sundry Creditors 220,000 1,25,000 Bills Payable 30,000 25.000 250.000 1.50,000 Trade receivables Debtors 3,60,000 1,90,000 Bills Receivable 140.000 100.000 5.00.000 2.90.000 Fixed Assets of both the companies are to be revalued at 15% above book value. Inventory in Trade and Debtors are taken over at 5% lesser than their book value. Both the companies are to pay 10% Equity dividend, Preference dividend having been already paid. After the above transactions are given effect to. A Ltd. will absorb B Ltd. on the following terms: (08 Equity Shares of 10 each will be issued by A Ltd. at par against 6 shares of B Ltd. (i) 10% Preference Shareholders of B Ltd. will be paid at 10% discount by issue of 10% Preference Shares of 100 each at par in A Ltd. (ii) 12% Debentureholders of B Ltd. are to be paid at 8% premium by 12% Debentures in A Ltd. issued at a discount of 10%. (iv) 730.000 is to be paid by A Ltd. to B Ltd. for Liquidation expenses. Sundry Creditors of B Ltd. include 10.000 due to A Ltd. Prepare: (a) Absorption entries in the books of A Ltd. (b) Statement of consideration payable by A Ltd