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20 Question 4 The following is the summarized Balance Sheet of A Ltd, as at 31st March, 2015: Liabilities Assets 8,000 equity shares of 100 each 8,00,000 10% debentures Building 3,40,000 6,40,000 Loan from A 4,00,000 Machinery 1,60,000 Trade payables Inventory 2,20,000 3,20,000 Trade receivables 2,60,000 General Reserve 80,000 Bank 1,36,000 Goodwill 130,000 Share issue Expenses 34,000 17.60.000 17.60.000 B Ltd. agreed to absorb A Ltd. on the following terms and conditions: (1) BLtd. would take over all assets, except bank balance at their book values less 10% Goodwill is to be valued at 4 year's purchase of super profits, assuming that the normal rate of return be 8% on the combined amount of share capital and general reserve. (2) B Ltd. is to take over trade payables at book value. (3) The purchase consideration is to be paid in cash to the extent of 6.00,000 and the balance in fully paid equity shares of 100 each at 125 per share. The average profit is * 1,24,400. The liquidation expenses amounted to 16,000. B Ltd. sold prior to 31st March, 2015 goods costing 1,20,000 to A Ltd. for 3 1,60,000. 1,00,000 worth of goods are still in Inventory of A Ltd. on 31st March, 2015. Trade payables of A Ltd. include 40,000 still due to B Ltd. Show the necessary Ledger Accounts to close the books of A Ltd. and prepare the Balance Sheet of B Ltd. as at 1st April, 2015 after the takeover

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