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Question :

Pranjal Ltd. purchased a running business from Vaibhav Ltd. for a sum of Rs. 2,50,000 payable as Rs. 2,30,000 in fully paid equity shares of Rs. 10 each and balance by bills payable. The assets and liabilities consisted of the following:

Plant and Machinery  Rs. 90,000; Building  Rs. 90,000; Sundry Debtors  Rs. 30,000; Stock  Rs. 50,000; Cash  Rs. 20,000; Sundry Creditors  Rs. 20,000.

Question:- How many shares will be issued by the company?

Option 1: 23,000 equity shares 

Option 2: 20,000 equity shares

Option 3: 25,000 equity shares

Option 4: None of these 


Team Careers360 13th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: 23,000 equity shares 


Solution : Answer = 23,000 equity shares 

JOURNAL

Date

Particulars

L.F.

Dr.( Rs.)

Cr.( Rs.)

 

Plant and Machinery A/c ...Dr.

Building A/c ...Dr.

Sundry Debtors A/c ...Dr.

Stock A/c ...Dr.

Cash A/c ...Dr.

 

90.000

90.000

30.000

50.000

20.000

 
 

To Sundry Creditors A/c

To Vaibhav Ltd.

To Capital Reserve A/c (Balancing Figure)

   

20,000

2,50,000

10,000

 

(Business of Vikas Ltd. purchased)

     
 

Vikas Ltd. ...Dr.

 

2,50,000

 
 

To Equity Share Capital A/c

To Bills Payable A/c

   

2,30,000

20,000

 

(Purchase consideration paid to Vikas Ltd. by issue of 23,000 Equity Shares of Rs. 10 each and balance by bills payable)

     

Number of shares = Purchase consideration/Issue Price = Rs.2,30,000/Rs.10 = 23,000.
Hence, the correct option is 1.

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