Question

12. X Ltd. And Y Ltd form into a new company XY Ltd.
X Ltd Y Ltd.

Net Assets 5,50,000 6,00,000
Purchase
consideration 10,00,000 8,00,000

The purchase consideration is to be settled by issue (100) of fully paid shares of XY Lid at par. The
number of shares issued to XY Ltd, will be
a) 1,00,000 shares
b) 2,00,000 shares
c) 45,000 shares
d) 55,000 shares​

Answer 1

Explanation:

1. Share will be issued by XY Ltd and not To XY Ltd.

2. Since Purchase consideration is given and also issue price is given which is ₹ 100. it means no. of shares issued is calculated by dividing the purchase consideration by issue price.

Purchase Consideration = 18,00,000

Issue Price = 100

No. of shares to be issued = 18,000 shares

When we know how much purchase consideration is paid or payable then net payment method is used and in this course there will be no interfare of net asset.

Net asset is involved to calculate intrinsic value when we calculate pc by net asset method and for this also no. of shares of old co. is required.