Amalgamation and External Reconstruction Question Bank [BCOM 2nd Sem CBCS Pattern 2023]


Amalgamation and External Reconstruction Question Bank

[BCOM 2nd Sem CBCS Pattern 2023]Amalgamation and External Reconstruction Question Bank

In this post you will get Amalgamation and External Reconstruction Question Bank for BCOM 2nd SEM CBCS Pattern. In this Question Bank we will cover Questions asked in the following universities exam:

– Dibrugarh University 

– Gauhati University

– Assam University

2022: 6. (a) Following are the Balance Sheets of Reny Ltd. and Moni Ltd. as at 31st March, 2022:

 

Reny Ltd. Rs. (‘000)

Moni Ltd. Rs. (‘000)

I. Equity and Liabilities

1. Shareholders’ Funds:

(a) Share Capital:

(i) Equity Share Capital (Rs. 10 each)

(ii) 12% Preference Share Capital (Rs. 10 each)

(b) Reserves and Surplus:

(i) General Reserve

(ii) Statutory Reserve

(iii) Surplus

2. Non-Current Liabilities

14% Debentures

3. Current Liabilities

 

 

 

24,000

 

13,800

1,200

1,700

 

4,300

 

 

 

9,000

3,000

 

2,900

400

1,080

 

750

2,970

 

45,000

20,100

II. Assets:

1. Non-Current Assets

Fixed Assets

2. Current Assets

 

 

33,000

12,000

 

 

14,200

5,900

 

45,000

20,100

On 1st April, 2022, Reny Ltd. takes over Moni Ltd. on the following terms:

(1) Reny Ltd. will issue 10,50,000 Equity Shares of Rs. 10 each at par to the Equity Shareholders of Moni Ltd.

(2) Reny Ltd. will issue 33,000, 12% Preference Shares of Rs. 100 each at par to the Preference Shareholders of Moni Ltd.

(3) Debentures of Moni Ltd. will be converted into equal number of 15% Debentures of the same denomination.

You are informed that statutory reserves of Moni Ltd. are to be maintained for three years.

You are required to give necessary Journal Entries in the books of Reny Ltd. and show the Balance Sheet of Reny Ltd. assuming that amalgamation in the nature of merger.           5+6=11

1. (2014. 2017, 2018 old course) A Ltd. And B Ltd. Decided to amalgamate and a new company named AB Ltd. is formed to take over both the companies as on 31st March, 2018. The following are the Ledger balances of the companies as on that date:

Credit Balances

A Ltd. 

B Ltd.

Debit Balances

A Ltd.

B Ltd.

Share Capital:

(Shares of Rs. 10 each Fully paid-up)

Reserve Fund

Profit & Loss A/c

Dividend Equalization Fund

Workmen Compensation Fund

Bank Overdraft

Sundry Creditors

Bills Payable

5,00,000

2,00,000

30,000

20,000

90,000

50,000

3,00,000

1,50,000

50,000

1,00,000

50,000

1,10,000

30,000

Goodwill

Land and Buildings

Plant and Machinery

Patents and Trade Mark

Stock

Sundry Debtors

Bills Receivables

Cast at Bank

1,00,000

2,50,000

2,00,000

2,00,000

90,000

50,000

80,000

1,90,000

2,55,000

52,500

1,50,000

40,000

20,000

2,500

8,90,000

7,90,000

8,90,000

7,90,000

Pass Journal Entries and prepare the Balance Sheet of AB Ltd. Assuming that amalgamation is done in the nature of purchase.         6+5=11

2. (2016) X Ltd. and Y Ltd. decided to amalgamate and a new company XY Ltd. is formed to take over both the companies as on 31st March, 2016. The following are the Balance Sheets of the companies as on that date:

Liabilities

X Ltd.

Y Ltd.

Assets

X Ltd.

Y Ltd.

Share Capital:

Shares of Rs. 10 each fully paid

Reserve fund

Profit & Loss A/c

Dividend Equalization Fund

Workmen Compensation fund

Bank Overdraft

Sundry Creditors

Bills Payable

 

5,00,000

2,00,000

30,000

20,000

1,00,000

50,000

 

3,00,000

1,50,000

50,000

1,00,000

50,000

1,20,000

30,000

Goodwill

Land and Buildings

Plant and Machinery

Patents and Trade Mark

Stock

Sundry Debtors

Bills Receivable

Cash at Bank

1,00,000

2,50,000

2,00,000

2,00,000

1,00,000

50,000

80,000

1,90,000

2,55,000

52,500

1,50,000

50,000

20,000

2,500

 

9,00,000

8,00,000

 

9,00,000

8,00,000

Show how the amount payable to each company is arrived at the prepare the amalgamated Balance Sheet of XY Ltd. assuming amalgamation is done in the nature of purchase.

3. (2004, 2015 old course) The summarized Balance Sheet of Ranjan Ltd. as on 31st March, 2013 was as follows:

Liabilities

Rs.

Assets

Rs.

Shares of Rs. 10 fully paid

General Reserve

Profit & Loss A/c

12% Debentures

Creditors

6,00,000

1,70,000

1,10,000

1,00,000

20,000

Goodwill

Land and Buildings & Plant

Stock

Debtors

Cash

1,00,000

6,40,000

1,68,000

36,000

56,000

 

10,00,000

 

10,00,000

Anjan Ltd. agreed to absorb the business of Ranjan Ltd. with effect from 1st April, 2013. The purchase consideration payable by Anjan Ltd. was agreed as follows:

1) A cash payment equivalent to Rs. 2.50 for every Rs. 10 shares in Ranjan Ltd.

2) The issue of 90000 equity shares of Rs. 10 each fully paid in Anjan Ltd. having an agreed value of Rs. 15 per share.

3) The issue of such an amount of fully paid 14% debentures in Anjan Ltd. at Rs. 96 per debenture as is sufficient to discharge 12% debentures in Ranjan Ltd. at a premium of 20%. While computing purchase consideration, Anjan Ltd. valued Land, Building and Plant at Rs. 12,00,000, stock Rs. 1,42,000 and Debtors at their face valued subject to a reserve of 5% for doubtful debts. The cost of liquidation of Ranjan Ltd. was Rs. 5,000.


i.
Prepare Realization A/c in the books of Ranjan Ltd.            4


ii.
Pass Journal Entries in the books of Anjan Ltd.                   8

4. (2012) Following is the balance sheet of P Ltd. As at 31st March, 2011:

Liabilities

Amount

Assets

Amount

Share capital:

Issued and paid up 250000 Equity Share of Rs. 10 each,

8 per share paid up

100000, 10% Pref. share of Rs 10 

Reserve and Surplus:

General Reserve

Profit and Loss Account

Current Liabilities:

Creditors

Workmen’s Profit Sharing Fund 

20,00,000

10,00,000

6,00,000

8,00,000

4,00,000

3,00,000

Fixed Assets:

Goodwill

Building

Plant and Machinery

Current Assets:

Stock

Sundry Debtors

Bank Balance

Miscellaneous Exp:

Preliminary Expenses

8,00,000

7,00,000

13,00,000

7,00,000

9,00,000

6,60,000

40,000

51,00,000

51,00,000

Q Ltd deicide to absorb the business of P Ltd. At the respective book value of assets and trade liabilities except Building which was valued at Rs. 1200000 and Plant & Machinery at Rs. 1000000. The purchase Consideration was payable as follows:

(i) Assumption of trade liabilities at book value.

(ii) Payment of liquidation expenses Rs. 5000 and Workmen’s Profit Sharing Fund at 10% premium.

(iii) Issue of equity share of 10 each fully paid at Rs. 11 per share for every Preference share and every equity share of P Ltd and a payment of 4 per equity share in cash.

Calculate the Purchase consideration and show the Realisation Account Share Accounts in the book of P Ltd. And Opening Journal Entries in the books of Q Ltd.

5. (2010, 2004 Hons) X Ltd. and Y Ltd. decided to amalgamate and a new company XY Ltd. is formed to take over both the companies as on 31st March, 2016. The following are the Balance Sheets of the companies as on that date:

Liabilities

X Ltd.Rs.

Y Ltd.Rs.

Assets

X Ltd.Rs.

Y Ltd.Rs.

Share Capital:

Shares of Rs. 10 each fully paid

Reserve fund

Profit & Loss A/c

Dividend Equalization Fund

Workmen Compensation fund

Bank Overdraft

Sundry Creditors

Bills Payable

5,00,000

2,00,000

30,000

20,000

1,00,000

50,000

 

3,00,000

1,50,000

50,000

1,00,000

50,000

1,20,000

30,000

Goodwill

Land and Buildings

Plant and Machinery

Patents and Trade Mark

Stock

Sundry Debtors

Bills Receivable

Cash at Bank

1,00,000

2,50,000

2,00,000

2,00,000

1,00,000

50,000

80,000

1,90,000

2,55,000

52,500

1,50,000

50,000

20,000

2,500

 

9,00,000

8,00,000

 

9,00,000

8,00,000

Show how the amount payable to each company is arrived at the prepare the amalgamated Balance Sheet of XY Ltd. assuming amalgamation is done in the nature of purchase.

6. (2007, 2008) The following are the balance sheet of Bata Ltd as at 31st March 2003

Liabilities

Rs.

Assets

Rs.

Share Capital:

24000 Shares of Rs. 10

Sundry Creditors

Bank Loan

 

 

240000

60000

52000

Building

Machinery

Stock

Debtors

 

200000

80000

30000

42000

352000

352000

The company went into liquidation and the assets were sold to Liberty Company Ltd. For Rs. 292000. The consideration was payable as follows:

a) Rs. 114000 in cash (which sufficed to discharge the liabilities and to pay the cost of winding up Rs. 2000) and

b) the balance Rs. 180000 by the allotment of 24000 shares of Rs. 10 each, Rs. 7.50 per share paid up to Bata Company Ltd.  Close the books of Bata Company Ltd

7. (2006) Radha Co Ltd and Shyam Co. Ltd entered into an agreement for amalgamation to form ‘Radheshyam Co/ Ltd’ as on 31st March 2005. Their respectively Balance Sheets on That date were as under:

Liabilities

RadhaLtd

Shyam Ltd

Assets

Radha Ltd

Shyam Ltd

Share Capital:

Share of Rs. 10 each fully paid

 

1000000

 

2000000

Goodwill

200000

400000

Capital Reserve

400000

 

Land & Building

400000

200000

General Reserve

200000

100000

Plant & Machinery

800000

700000

Profit % Loss A/C

300000

 

Furniture

100000

100000

Securities Loan

700000

500000

Stocks

800000

1000000

Sundry Creditors

400000

500000

Debtors

650000

530000

 

 

 

Cash at Bank

50000

20000

 

 

 

Profit & Loss A/C (Debit)

 

150000

 

3000000

3100000

 

3000000

3100000

The purchase consideration of the two companies was as under:

Radha Co. Ltd – Allotment of 200000 fully paid shares of Rs. 10 each.

shyam Co. Ltd – Allotment of 150000 fully paid shares of Rs. 10 each.

From above particulars

a) Pass Journal Entries in the books of Radheshyam Co. Ltd;

b) Prepare the Opening Balance Sheet of Radheshyam Co. Ltd;

8. (2005 Major) Following is the Balance Sheet of Star Ltd. As on 31st March 2002

Liabilities

Amount

Assets

Amount

Share Capita1:

1,20,000 Shares of Rs. 10 each fully paid

Capital Reserve

Long Term Loan

Creditors

 

12,00,000

20,000

3,60,000

3,00,000

Plant & Machinery

Furniture

Stock

Debenture

Bank

Profit & Loss Account

9,00,000

1,50,000

4,00,000

2,20,000

1,00,000

1,10,000

 

18,80,000

 

9,00,000

On 1st April 2002 a new company Suraj Ltd. Was formed which took over fixed assets and stock of Star Ltd. For Rs. 1260000 payables as Rs. 900000 in the form of 180000 equity shares of Rs. 5 each and Rs. 360000 in the form 3600, 12% Mortgage Debentures of Rs. 100 each Lender accepted the debentures in the Suraj Ltd. In the discharge of Loan. Debtors realized Rs. 205000. Expenses liquidation amounted to Rs. 8000 and was met by Star Ltd. The available cash was distributed among creditors in full satisfaction of their claim. Show necessary lender accounts to close to close the book of Star Ltd.

9. (2004) Following are the abridged balance sheets of P. Ltd and S. Ltd as on 31st March 2007:

Liabilities

P Ltd.Rs.

S Ltd.Rs.

Assets

P Ltd.Rs.

S Ltd.Rs.

Equity shares capital (Rs. 10 each)          

10% preference Share Cap. (Rs. 100 each)      

General Reserve

Statutory Reserve

Profit & Loss Account

12% Debenture

Current Liabilities

8,000

1,000

4,610

390

563

 

1,437

3,000

 

980

125

355

250

990

Fixed Assets

Current Assets

11,000

4,000

4,730

1,970

 

15,000

6,700

 

15,000

6,700

On 1st April 2007 P. Ltd takes over S. Ltd. On the following terms:

1. P. Ltd will issue 350000 Equity shares of Rs. 10 each at par to the Equity shareholders of S. Ltd

2. P. Ltd will issue 11000 10% Preference share of Rs. 100 each at part the preference shareholders of S. Ltd.

3. The Debenture of S. Ltd will be converted into an equal number of 12.5% debentures of the same denomination. You are required to show the balance sheet of P. Ltd immediately after the above mentioned scheme of amalgamation has been implemented assuming that the amalgamation in the nature of merger.

PRACTICAL QUESTION BANK (FROM 2012 TO 2022)

ISSUE OF SHARES, RIGHT SHARES AND BONUS SHARES

REDEMPTION OF PREFERECE SHARES

ISSUE AND REDEMPTION OF DEBENTURES

FINAL ACCOUNTS OF COMPANIES

INTERNAL RECONSTRUCTION

AMALGAMATION AND EXTERNAL RECONSTRUCTION

ACCOUNTS OF BANKING COMPANIES

CASH FLOW STATEMENT

ACCOUNTS OF HOLDING COMPANIES

Important Theory Questions for 2023 BCOM Exams available here.


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