Question

(31) On absorption in nature of purchase, it was agreed that the realization expenses to
the extent of Rs.10,000 will be paid by Transferee Company. If the actual realization expense
amounts to Rs.12,000 Which of the following entry will be passed in books of Transferee
Company?
(a) Goodwill A/C Dr. 10,000 To Cash A/C 10,000
(b) P&L A/C Dr. 10,000 To Cash A/C 10,000
(c) Goodwill A/c Dr. 12,000 To Cash A/C 12,000
(d) P & L A/C Dr. 12,000 To Cash A/C 12,000
or itd has increase the authorized share capital by 3,00,000 10% Preference shares of
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Answer 1

AnswerAccounting Treatment in books of Transferee Company according to the type of ... 'Purchase Consideration' under this method is taken as the aggregate of all ... Rs. 20,000 (actual cost Rs. 17,000); the payment of the debentures Rs. 1,00,000 at a ... (c) The cash and bank balances should not be transferred to Realisation ...

Explanation:

Answer 2

Goodwill A/c Dr. 12,000 To Cash A/C 12000