Amalgamation - Purchase

Amigamation Amalgamation, Absorptean and External Reconstructio... (for accounting purpose all are same) (win simple following aspuits are to be covered. 3. Meaning of Amalgamation ete Calculationcup Purchase consideration (PC) Bank of New Company. Acquirer company - In the nature of prochure Apply purchase midhe In the nature of morgen Apply pooling et Interest methed Book of old company / Target Company. How to close Books of Target Company Meaning of Amalgamation cate (a) Amalgamation means where 2 or more companies are combined to business. pom hew Compuny for Target Companies are wound up. • New Company 4 foormed for tend take over xta + y Ltd ztd. X Old Compa New Company Absorption Yamuna Cranga Ltd. Mange the kajam thro Amalgamation Bersiness Means Assets + Liabilitig Ahimpition envers where any company or comparis Combined with any existing Company for busines (c) External reconstruction Where one Company. tif is its business to a newly promed Company. XLtd Amal Absop 2 Calculation ap purchase Orsokration (P.C).. Two methods for calcavating (Net Assets method (NAM) B (b)Net Payments method (NPM) Wherever data is available for for Calculating PC by NP method, apply Npm, But if daty is not curitib or incomplete, apply Net assets methat. PC Under Net Assets method - Sunday Assts taker ovs at agred value less: Sundry Liab taken oven at cyareed veche We always assume Xix (xx) PSL Escare paid in Eg. Ps per As-14, it ques specifies Retal of huy ments by new company for SHS. Then Pc wil PC. Under Not payment method - be equal to Keum total of such pojmy P.C. pard by new Co Cacquirer) to chanchaldas [Ey+Pref] is considered as PC. Such pc. Con be- povid. in form of Aquity share / Pret share cash or any other form Payment To Payment Fo Spuck for Working Amk SH PSH Cash Ips Its etc. xxx for Calculating No of shares to be issued, use following method) Swap satio (Exchange ratio) x No.et share of issue prica old co * Check. Fracture is above calculation praction will be settled in cash. Cadastation Journal Entries for acqurers (New Company) [Under purchase mothad). On agreement ment darte 2 Business purchase ALV Pr To Liquidater Any I Being Business proethane - Pic. Tender Taroget lo 1 ② Sundry Assets Dr. Dr. Cat Cat agrand agreid To Sundry Liabilities (at agreed value]) To Busines purchase (P. Value A Any deference tif to goodwill or Capital Reserve. ③ Liquidater. Alc To ESC (paid up) To PSC To Security premium To Cash Creat Calculation of P.C [check ac method Chock Provides details about Yes Swap ratio NPM (TOSH) Chock trad NO Does & provides valiut of 18. sheres of old & New Co.3) →Yes NPA No Does & requires Pc on Intrinsic value / share value Basis Yes Calculate Apply No Check fro NO Apply N.AM. Sundry Assets taken over XXX Sunday Liab. taken over (max) P.C XXX (1,00,00×254)-81= 122 Fu these ) entry it entries are past Amalgamaation (d) 6.1 Deboratures of Std. "Br Discount on Aseu ot deb Dr To 8 Mortage aleb Bång deb paid) 2,40,000 10,00% 215 Note: If New Company takes aves Debentures any old co then in Ein second entry debentures of cold Co Should be- Suecarded at " Aopad value" (कितने पैसे देने है) Such deb should be settled by issuing hew Co. at premium or discounter. or par as required in Quistion. deb-ot value Stry Al Deb. of old co. Ale Dr. A Discount To New deib. AIK To S. premiam [Being deb. settled] Calalatonot P.C. (NAM):- Sunday assets 18,00,000 75% of Sundby assets nouvre thom 12%- book value = 13,50,000 +1,6 -1512070 Amalgamation Intrinsic value alg shoes - Intrinsic value of Shoerus is calculated it Required, In Question This represents "worth" of shows. It Can be considered as pain value of shares Lormule:- XXX Sundry assets at market value. (xxx) (-) Sundry diab, at market value. (XXX) (-) Amt payble to pret.S.H. XXX Amt.for. Eq.SH. No. of & Shorus XXX Intrinsic value per share Intrinsic value can be considered as. # Expected Repund per equity share it Company so wowdated" 129 General Commercial Knowledge Sharingum Assets Liab Risove •Plant & Machinery • Furnition •Debentures PRL -Creditors Cau be GIR Workman com- Stock •land & Building •Bills payble Link-pansation fund • Chaod will providend fund •Retirement find IH Harkoman Accident Patiest -Loan specati fund Retained Farming Sinking fund. Deliters •Cash & Bank •Investments Satthane, Website Intangible Assets (cryptic Praviasion bea bor debt. Phout fluctution fund • Provision for declining in Provision for Rep. lasses . Preliminary Exp. Dr. Bal PEL Dr Fictions Discount on issue of Shares/Debentures Underwriting Comaty Rifere Seven exp Investment Allowances Reserve Statutory Revove Export propit Reserve. foreign project Reserve Shipping Reserve. Housing Peserve T. Devlopment Reverie. the New Co s paying "Liquidation" exp How to is possible Specify New may have Some future benefits Toumnal Goodwill Ale Tonl To Cash Arc Note :- Sop of ald Co paid by New Co. When ens exp of old Co. are paid by new co [Pxample Liquidation. Expl Journal Entry in new books Goodwill Aic Dr- To Cash Aic [Being Exp puid] Note :- Now company is required to Create Statutory Reserves of old company for Jegal purpose. Journal Entry would ber Adjustment regene Amalgamation To Statutory Reserves (Being statutory seserves. Created] If Q requires Statutory asserves to created, then this entry is sequiand. If & is silent abount Statutory Reserve, we should assume its nation. Frasere * Anal gamation Adjustment Ale 1st Shawn is B of New Company min Reserve & Siroplus as hegitive. Item. OR • Other Non-cursunt Assets as positive item. Nate Control Adjustment - Wheneves any payable and Jaceivable one for from some porty in new BIS of Acqui Acquires, such payable & receivable. should be off set. Journal Entry Payable Arc Dr To receivable [Being Contra balance Adjustment) * Any dipperence in payble & receivable is due to Cash-in-transit Note: Unradised propit on stock transfer of stacle. In Balance-sheet of Acquiren includes propit dement, Such profit. Should be - Climinated →