Question

A company issued 30,000 fully paid-up shares of ₹ 100 each for purchase of the following assets and liabilities from Sharma Co:
You are required to pass necessary journal entries.

Answer 1

Attached is the file

Answer 2

The question is incomplete, the correct answer is -

Given:

Paid up shares = 30,000

Share value = 100

Plant = 7,00,000

Stock in Trade = 900,000

Land and Building = 12,00,000

Sundry Creditors = 2,00,000

To Find:

The journal entries of Sharma and Co.

Solution:

The correct journal entries are -

1. Goodwill A/c Dr. 4,00.000

Plant A/c Dr. 7,00,000

Stock in Trade A/c Dr. 9,00,000

Land and Building A/c Dr. 12,00,000

To Sundry Creditors 2,00,000

To Sharma & Co. 30,00,000

( Being assets purchased and liabilities accepted)

2. Sharma & Co. A/c 30,00,000

To  Sundry Creditors A/c 30,00,000

( Being 30,000 shares of 100 each issued to Sharma & Co.)