Question

Q. 5. R Ltd. purchased the running business of Ms Mukerjee Bros. for a sum of 60,00,000 payable by the issue of equity shares of 10 each at 40. The assets and liabilities consisted of the following: ₹ ₹ Land and Building 32,00,000 Sundry Debtors Plant and Machinery 6,00,000 16,00,000 Sundry Creditors 4,00,000 Stock 15,00,000​

Answer 1

Answer:

Mr. Joshi maintain his record under single entry system on 1/4/2004 he started business with cash Rs. 80,000 on 31/03/2005 his position of assets and liabilities, Assets and liabilities 31/03/2005 Bank Overdraft 5,000 Land & Building 40,000 Plant & Machinery 40,000 Furniture 10,000 Debtors 30,000 Stock 20,000 Cash in Hand 10,000 Bills Receivable 5,000 Creditors 36,000 He introduced additional capital of Rs. 5,000 during the year and withdraw Rs. 4,000 during the year for personal use Yo

Explanation:

Q. 5. R Ltd. purchased the running business of Ms Mukerjee Bros. for a sum of 60,00,000 payable by the issue of equity shares of 10 each at 40. The assets and liabilities consisted of the following: ₹ ₹ Land and Building 32,00,000 Sundry Debtors Plant and Machinery 6,00,000 16,00,000 Sundry Creditors 4,00,000 Stock 15,00,000

Answer 2

Books of R Ltd.

Particulars                           Debit                             Credit

Land and Building A/c Dr.        32,00,000

Sundry Debtors A/c Dr.              6,00,000

Plant and Machinery A/c Dr.     16,00,000

Stock 15,00,000 A/c Dr.            15,00,000

To Sundry Creditors A/c             4,00,000

To Mukerjee Bros.A/c                                                   60,00,000

To Capital Reserve A/c                                                    5,00,000

(Purchase of a running business from Mukerjee Bros)

Mukerjee Bros A/c Dr.                60,00,000

To Equity Share Capital A/c (1,50,000 x 10)                  15,00,000

To Securities Premium Reserve A/c (1,50,000 x 30)    45,00,000

(Purchase consideration for acquiring business by issuing 1,50,000 equity shares of Rs. 10 at Rs. 30 premium)