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Govind Pal Ltd., purchased running business of Hari Kishan for a purchase consideration of Rs. 20,00,000 and it took over their assets and liabilities as follows: Land Rs. 3,00,000; Plant Rs. 5,00,000; Building Rs. 4,00,000; Cash Rs.50,000; Sundry Debtors Rs. 1,00,000; Sundry Creditors Rs. 70,000. It was decided between them to settle purchase consideration on the following basis : 20% in cash, 40% of the balance amount by accepting a bill of exchange and rest by issuing shares of Rs. 10 each at a premium of 20%. |
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Answer» Govind Pal Ltd., purchased running business of Hari Kishan for a purchase consideration of Rs. 20,00,000 and it took over their assets and liabilities as follows: Land Rs. 3,00,000; Plant Rs. 5,00,000; Building Rs. 4,00,000; Cash Rs.50,000; Sundry Debtors Rs. 1,00,000; Sundry Creditors Rs. 70,000. It was decided between them to settle purchase consideration on the following basis : 20% in cash, 40% of the balance amount by accepting a bill of exchange and rest by issuing shares of Rs. 10 each at a premium of 20%. |
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