Question : X Ltd. took over assets of Rs.5,00,000 and liabilities of Rs.1,00,000 of another company at an agreed price of Rs.3,80,000. The purchase consideration was discharged by issuing debentures of Rs. 100 each at a discount of 10%. It was agreed that any fraction of the debenture be paid in cash. Question:- Balance of Rs.20,000 will be
Option 1: Debited to goodwill Account
Option 2: Debited to capital reserve account
Option 3: Credited to securities account
Option 4: Credited to Capital Reserve account
Correct Answer: Credited to Capital Reserve account
Solution : Answer = Credited to Capital Reserve Account
Net Assets = 5,00,000- 1,00,000= Rs 4,00,000 Purchase consideration = 3,80,000 If purchase consideration is less than Net Assets, then the balance is transferred to the Capital reserve. Hence, the correct option is 4.
Question : X Ltd. took over assets of Rs.5,00,000 and liabilities of Rs.1,00,000 of another company at an agreed price of Rs.3,80,000. The purchase consideration was discharged by issuing debentures of Rs. 100 each at a discount of 10%. It was agreed that any fraction of the
Question : X Ltd. took over assets of Rs.5,00,000 and liabilities of Rs.1,00,000 of another company at an agreed price of Rs.3,80,000. The purchase consideration was discharged by issuing debentures of Rs.100 each at a discount of 10%. It was agreed that any fraction of the
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