Question

On Ist January, 2016, a limited company was formed to take over an established business and was registered with a nominal capital of 10,00,000 consisting of 5,000, 6% preference shares of 100 each and 5,000 equity shares of 100 each. The purchase price agreed upon with the vendor was 5,80,000 which was satisfied by the allotment on 15th January, 2016, of 2000 fully paid up preference shares and 3,000 fully paid up equity shares and the balance in cash. The assets and liabilities taken over by the company were as follows: Land and buildings 2,50,000; Motor vehicles 7 62,000; Sundry debtors 1,47,000; Stock 1,80,000; Cash at bank 1,000; Sundry creditors 1,55,000; Expenses owing 5,000. On 15th January, 2016 the remaining shares were issued to the public and all amount duly received. On 1st April, 2016, the company also issued 5,00,000, 9% mortgage debentures at a discount of 5%. Make journal entries to record these transactions in the books of the company and draw up its balance sheet.

Answer 1

Answer:

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Explanation:

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