Question 26: Neeraj
Ltd. took over business of Ajay Enterprises on 1-04-2020. The details of the
agreement regarding the assets and liabilities to be taken over are:
|
Particulars |
(Book
Value) |
(Agreed
Value) |
|
Building |
20,00,000
|
35,00,000 |
|
Plant and Machinery |
12,00,0000
|
8,00,000 |
|
Stock |
4,00,000 |
4,00,000 |
|
Trade receivables |
5,00,000
|
4,00,000 |
|
Creditors |
2,00,000
|
3,00,000 |
|
Outstanding Expenses |
50,000
|
1,00,000 |
It
was decided to pay for purchase consideration as ₹ 7,00,000
through Cheque and balance by issue of
2,00,000, 9% Debentures of
20 each at a premium of 25%. Journalise. (CBSE Sample
Paper 2020)
Answer:
|
Books of Neeraj Ltd. |
|||||
|
Journal |
|||||
|
Date |
Particular |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Building
A/c Plant
and Machinery A/c Stock
A/c Trade
receivables A/c |
Dr. Dr. Dr. Dr. |
|
35,00,000 8,00,000 4,00,000 4,00,000 |
|
|
|
To Creditors A/c |
|
|
3,00,000 |
|
|
|
To Outstanding Expenses
A/c To Ajay Enterprises’s A/c |
|
|
1,00,000 47,00,000 |
|
|
|
|
|
|
|
|
|
|
(Being
purchase of Business) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ajay Enterprises’s A/c Dr. |
|
47,00,000 |
|
|
|
|
To Bank A/c To 9% Debentures A/c |
|
|
7,00,000 32,00,000 |
|
|
|
To Securities Premium
Reserve A/c |
|
|
8,00,000 |
|
|
|
(Being
12% 1,60,000 Debentures issued of ₹ 20 each at a premium of 25% at ₹25) |
|
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Question 27:
Grown
Ltd. issued 500, 10% Debentures of ₹ 1,000 each credited as fully paid-up
to the promoters for their services to incorporate the company. It also issued
100, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the
underwriters towards their commission. Pass the Journal entries.
Answer:
|
In the books of Grown Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
|
Incorporation Expenses A/c |
Dr. |
|
5,00,000 |
|
|
|
To Promoters A/c |
|
|
|
5,00,000 |
|
|
(Being amount due to promoters for
their services) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Promoters A/c |
Dr. |
|
5,00,000 |
|
|
|
To 10% Debentures A/c (500
× 1,000) |
|
|
|
5,00,000 |
|
|
(Being 500, 10% debentures issued
as purchase consideration) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriting Commission A/c |
Dr. |
|
1,00,000 |
|
|
|
To Underwriters A/c |
|
|
|
1,00,000 |
|
|
(Being amount due to underwriters
for their services) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Underwriters A/c |
Dr. |
|
1,00,000 |
|
|
|
To 10% Debentures A/c (100
× 1,000) |
|
|
|
1,00,000 |
|
|
(Being 100, 10% debentures
issued as purchase consideration) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Profit and Loss A/c |
Dr. |
|
6,00,000 |
|
|
|
To Incorporation Expenses
A/c |
|
|
|
5,00,000 |
|
|
To Underwriting Commission
A/c |
|
|
|
1,00,000 |
|
|
(Being expenses transferred to
statement of profit and loss at the end of year) |
|
|
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Question 28:
Star
Ltd. took over the assets of ₹ 6,60,000 and
liabilities of ₹ 80,000 ofMoon Ltd.
for ₹ 6,00,000. Give necessary Journal entries in the books of Star
Ltd. assuming that:
Case (1): The purchase consideration was payable 10% in cash
and the balance in 5,400; 12% Debentures of ₹ 100 each.
Case (2): The purchase consideration was payable 10% in cash
and the balance in 4,500; 12% Debentures of ₹ 100 each issued at 20%
premium.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Assets A/c |
Dr. |
|
6,60,000 |
|
|
|
Goodwill A/c (Balancing Figure) |
Dr. |
|
20,000 |
|
|
|
To
Liabilities A/c |
|
|
|
80,000 |
|
|
To
Moon Ltd. |
|
|
|
6,00,000 |
|
|
(Purchase of business took over) |
|
|
|
|
|
|
|
|
|
|
|
|
a. |
Moon Ltd. |
Dr. |
|
6,00,000 |
|
|
|
To Cash A/c |
|
|
|
60,000 |
|
|
To 12% Debentures A/c |
|
|
|
5,40,000 |
|
|
(Purchase consideration discharged) |
|
|
|
|
|
|
|
|
|
|
|
|
b. |
Moon Ltd. |
Dr. |
|
6,00,000 |
|
|
|
To Cash A/c |
|
|
|
60,000 |
|
|
To 12% Debentures A/c |
|
|
|
4,50,000 |
|
|
To Security Premium Reserve
A/c |
|
|
|
90,000 |
|
|
( Purchase consideration
discharged) |
|
|
|
|
|
|
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Question 29:
Bright
Ltd. took over the assets of ₹ 6,60,000 and
liabilities of ₹ 80,000 of Star Ltd. for an agreed purchase
consideration of ₹ 6,00,000 payable 10% in cash and the balance by
the issue of 12% Debentures of ₹ 100 each. Give necessary Journal
entries in the books of Bright Ltd., assuming that:
Case (a): The debentures are issued at par.
Case (b): The debentures are issued at 20% premium.
Case (c): The debentures are issued at 10% discount.
Answer:
|
Books
of Bright Ltd. |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
Assets A/c |
Dr. |
|
6,60,000 |
|
|
|
Goodwill A/c(Balancing Figure) |
Dr. |
|
20,000 |
|
|
|
To
Liabilities A/c |
|
|
|
80,000 |
|
|
To
Star Ltd. |
|
|
|
6,00,000 |
|
|
(Purchase of business of Star Ltd.) |
|
|
|
|
|
|
|
|
|
60,000 |
|
|
|
Star Ltd. |
Dr. |
|
|
60,000 |
|
|
To Cash A/c |
|
|
|
|
|
|
(Payment made in cash) |
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
Star Ltd. |
Dr. |
|
5,40,000 |
|
|
|
To 12% Debentures A/c |
|
|
|
5,40,000 |
|
|
( Purchase consideration discharged
by issue of 12% Debentures) |
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
Star Ltd. |
Dr. |
|
5,40,000 |
|
|
|
To 12% Debentures A/c |
|
|
|
4,50,000 |
|
|
To Security Premium Reserve
A/c |
|
|
|
90,000 |
|
|
( Purchase consideration discharged
by issue of 12% Debentures) |
|
|
|
|
|
|
|
|
|
|
|
|
(c) |
Star Ltd. |
Dr. |
|
5,40,000 |
|
|
|
Discount on Issue of Debentures A/c |
Dr. |
|
60,000 |
|
|
|
To 12% Debentures A/c |
|
|
|
6,00,000 |
|
|
( Purchase consideration discharged
by issue of 12% Debentures) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Working Note:
1) Number of Debentures to issued=5,40,000/120=4,500 Debentures
2) Number of Debentures to issued=5,40,000/90=6,000 Debentures
Question 30:
Suhani
Ltd took a loan of ₹ 4,00,000 from Bandhan Bank Ltd. and issued 8% Debentures
of ₹ 4,00,000 as a collateral security.
Answer:
When
Debentures Issued as Collateral Security are shown separately
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Bank
A/c |
Dr. |
|
4,00,000 |
|
|
|
To Loan from Bandhan Bank Ltd. |
|
|
4,00,000 |
|
|
|
(Loan
taken against issuing 8% Debentures as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture
Suspense A/c |
Dr. |
|
4,00,000 |
|
|
|
To 8% Debenture A/c |
|
|
4,00,000 |
|
|
|
(Debentures
issued as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
Posting
in the Company's Balance Sheet (When Debentures Issued
as Collateral Security are shown separately)
|
Balance Sheet |
||
|
Particulars |
Note No. |
(₹) |
|
I Equity and Liabilities |
|
|
|
1.Shareholders’ Funds |
|
|
|
2.Non-Current
Liabilities |
|
|
|
a. Long-Term Borrowings |
1 |
4,00,000 |
|
3.Current Liabilities |
|
|
|
Total |
|
4,00,000 |
|
|
|
|
|
II Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash
Equivalents |
2 |
4,00,000 |
|
Total |
|
4,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(₹) |
|
|
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
|
Secured: |
|
|
|
|
Loan from Bandhan Bank (Secured by issue of Debentures of ₹
4,00,000) |
4,00,000 |
|
|
|
8% Debentures (Issued
as Collateral Security to Bank against Loan) |
4,00,000 |
|
|
|
Less: Debenture Suspense Account |
4,00,000 |
- |
|
|
|
4,00,000 |
|
|
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
4,00,000 |
|
|
|
|
|
|
Alternative Method: When debentures Issued as Collateral Security are not shown separately
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Bank
A/c |
Dr. |
|
4,00,000 |
|
|
|
To Loan From Bandhan Bank Ltd. |
|
|
4,00,000 |
|
|
|
(Loan
taken from Bandhan Bank secured by issuing
Debentures as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
(When DebenturesIssued
as Collateral Security are not shown separately)
|
Balance Sheet |
||
|
Particulars |
Note No. |
(₹) |
|
I. Equity and Liabilities |
|
|
|
1. Shareholders’ Funds |
|
|
|
2. Non-Current
Liabilities |
|
|
|
a. Long-Term Borrowings |
1 |
4,00,000 |
|
3. Current Liabilities |
|
|
|
Total |
|
4,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1. Non-Current Assets |
|
|
|
2. Current Assets |
|
|
|
a. Cash and Cash
Equivalents |
2 |
4,00,000 |
|
Total |
|
4,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(₹) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Secured: |
|
|
|
Loan from Bandhan Bank (Secured by issue of 8% Debentures of ₹
4,00,000 as Collateral Security) |
4,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
4,00,000 |
|
|
|
|
Ts Grewal Solution 2025-2026
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Class 12 / Volume – 2