The writer is very fast, professional and responded to the review request fast also. Thank you.
X Ltd. having a share capital of ` 20 lakhs and Y Ltd.having a share capital of `30 lakhs. Z Ltd. wasformed to take over the business of X Ltd and Y Ltd. at a purchase consideration of ` 25 lakhs and ` 28lakhs, payable in shares of Z Ltd. The assets and liabilities were taken at their carrying amounts.
Solution
Since the purchase consideration is payable in shares of the transferee company and all the assetsand liabilities are taken over at their carrying amounts, the amalgamation is in the nature of merger,i.e. pooling of interests method.
For X Ltd. Purchase consideration = ` 25 lakhs
Less: Share capital of X Ltd = ` 20 lakhs
Excess of purchase consideration = `5 lakhs. This shall have to be adjusted against the Reservesof Z Ltd
For Y Ltd. Purchase Consideration = `28 lakhs
Less: Share Capital of Y Ltd = `30 lakhs
since purchase consideration is less than share capital of the transferor company, `2 lakhs shall betreated as Capital Reserve.
Note: In case of amalgamation in the nature of purchase, goodwill shall have to be shown in theBalance Sheet of the Transferee company. Such goodwill shall have to be written off over a maximum period of 5 years
Show more
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more