URGENT

8. P Ltd was registered with a share capital of $.10,00,000 in equity of 10 each to acquire the

business of R&K. the balance sheet of R&K is given below;

Assets	Amount $	Liabilities	Amount $
Cash A/c Receivables Stock Furniture Land and building Machinery Total	58000 122000 36000 4000 80000 100000 400000	A/C payable Reserve fund Capital of Mr.R Capital of Mr.k Total	92000 28000 140000 140000 400000

P ltd take over the business and given the purchase consideration by revaluing the assets

and liabilities as given below:

1. Land & Buildings, Furniture and machinery were 85%.

2. Accounts receivable @95%as reserve.

3. Taken over remaining all the assets and outside liabilities at book value.

4. The purchase consideration was discharged by 20000 equity shares of $ 10 each,

allotment of 1200 of 10% Debentures of $100 each at a discount of 5% and balance in

cash.

Find out the purchase consideration.

Pass journal entries in the books of P Ltd and

Prepare the balance sheet in the books of P Ltd Company after the acquisition of the

business.