Unit - 4
CONVERSION / SALE OF A PARTNERSHIP FIRM INTO A LTD COMPANY
Partnership firm in India is a major type of business concern which has led not only to the growth of the economy but also has provided employment and entrepreneur skills to the business. A growth in this business results in a need for tremendous expansion. However, a partnership firm suffers various inherent limitations of insufficient funding, unlimited liability, skills and competence in handling a business and so on under such a situation it becomes very necessary for the firm to change its form. The firm in such a situation may convert itself into either
- A Joint Stock Company or
- Limited Liability Partnership Firm to handle the spurt in the growth of the business.
In case the operations are very voluminous or large scaled a joint stock company becomes the most desirable solution. However it all depends on the partners’ argument to change the form of the business. This change of form may be done by either selling the firm altogether by converting it to a company.
It has to be done through the following stages:
- Finding out prospective buyer of the partnership firm who will purchase the firm and then form a company. (In some cases, the partners may take help of the financial service providing firms and themselves complete the formalities)
- Estimate the Purchase Consideration.
- Transfer assets and liabilities to the companies.
- Distribute the purchase consideration to the partners.
In the process of conversion or sale the students are required to:
- Ascertain purchase consideration.
- Close books of old firms.
- Preparation of Balance Sheet of the New Firm.
Purchase Consideration (PC): It means the price to be paid to the partners for giving up their ownership rights. It is the consideration given to the partners for sale of their business to the company.
It can be calculated as follows:
- Net Assets Method: Here the PC means Difference between the agreed values of assets taken over and liabilities accepted by the new company.
2. Net Payment Method: Here the PC means payment made through equity shares, preference shares, debentures, and cash to the partners.
3. Lump sum Method: It means large single payment to the partners.
In the books of the Partnership Firm.
Transfer all assets to the Realisation A/c
Realisation A/c Dr.
To All Assets A/c
Transfer liabilities except capital
Liabilities A/c Dr.
To Realisation A/c
Create Partners claim (only if there are reserves / profits not added to the Capital)
General Reserve A/c Dr.
Profit and Loss A/c Dr.
To Partner’s Capital A/c
Transfer of Partners loan
Partners Loans A/c Dr.
To Partner’s Capital A/c
OR
Payment or settlement of partner’s loan
Partner’s Loan A/c Dr.
To Bank / asset A/c
Record the Purchase Consideration
New Company A/c Dr.
To Realisation A/c
Calculate realization loss or gain and transfer to the capital A/c
Gain:
Realisation A/c Dr.
To Partners’ Capital A/c
Loss:
Partners’ Capital A/c Dr.
To Realisation A/c
Receiving the purchase consideration
Shares / Debentures / Cash A/c Dr.
To New Company A/c
Disburse the Purchase Consideration to the Partners
Partners’ Capital A/c Dr.
To Shares / Debentures / Cash
In books of the new company (Not included in the syllabus)
A, B and C share profits and losses in the ratio of 3:2:1 respectively. Their Balance sheet as on 31/12/2018 is as follows:
Assets | Rs. | Liabilities | Rs. |
Capital |
| Goodwill | 20,000 |
A | 1,40,000 | Land | 40,000 |
B | 1,60,000 | Building | 2,20,000 |
C | 20,000 | Machinery | 1,00,000 |
General Reserve | 36,000 | Vehicles | 56,000 |
Investment Fluctuation | 8,000 | Furniture | 24,000 |
Loan |
|
|
|
C’s Loan | 66,000 | Investment | 36,000 |
Mrs. A’s loan | 30,000 | Loose Tools | 14,000 |
Creditors | 1,52,000 | Bills Receivable | 40,000 |
Outstanding Expenses | 40,000 | Debtors 80,000 |
|
Bills Payable | 28,000 | Provision 4,000 | 76,000 |
Bank Over Draft | 1,20,000 | Cash | 38,000 |
|
| C’s Current A/c | 1,12,000 |
|
| Profit & Loss A/c | 24,000 |
| 8,00,000 |
| 8,00,000 |
Adjustments:
- The partners decided to convert the firm into ABC Ltd. a Joint Stock Company having an authorized capital of 1,00,000 equity shares of Rs10 each.
- The purchase consideration was decided at Rs 5,80,000 and settled by paying
Rs 1,00,000 in cash and balance through equity shares.
3. The outstanding expenses were to be settled by the firm.
4. Loose Tools, vehicles, furniture and investments are sold by the firm at Rs 10,000; Rs 50,000; Rs 25,000 and Rs 42,000 respectively.
5. The Partner’s and their spouses loan are taken over by the respective partners along with current A/c balances.
Prepare the ledger accounts in the books of the partnership firm.
Solution:
Purchase Consideration
P.C. (given) |
| 5,80,000 |
Settlement |
|
|
1) Cash / Bank | 1,00,000 |
|
2) Equity shares (40,000 shares of Rs 10 each) | 4,80,000 | 5,80,000 |
Ledger Accounts
Realisation A/c
To Assets A/c |
| By Liabilities A/c |
|
Goodwill | 20,000 | Creditors | 1,52,000 |
Land | 40,000 | Bill Payable | 28,000 |
Building | 2,20,000 | Provision on | 4,000 |
|
| Debtors |
|
Machinery | 1,00,000 | By ABC Ltd. (PC) | 5,80,000 |
Bills Received | 40,000 | By Furniture | 1,000 |
Debtors | 80,000 | By Investments | 6,000 |
Loose tools | 4,000 |
|
|
Vehicles | 6,000 |
|
|
To Partner’s Capital (in PSR) |
|
|
|
A 1,30,500 |
|
|
|
B 87,000 |
|
|
|
C 43,500 | 2,61,000 |
|
|
(gain on realization) |
|
|
|
| 7,71,000 |
| 7,71,000 |
Partner’s Capital A/c
Particulars | Partners | Particulars | Partners | ||||
A | B | C | A | B | C | ||
To Current A/c | - | - | 1,12,000 | By Balance b/d | 1,40,000 | 1,60,000 | 20,000 |
To Profit & Loss A/c (PSR) | 12,000 | 8,000 | 4,000 | By General Reserve (PSR) | 18,000 | 12,000 | 6,000 |
To Equity Share in ABC ltd. | 2,40,000 | 1,60,000 | 80,000 | By Investment fluctuation period (PSR) | 4,000 | 2,667 | 1,333 |
To Bank (final payment done) | 70,500 | 93,667 | -- | By Loan’s (adj 5) | 30,000 | -- | 66,000 |
|
|
|
| By Realisation (gain) | 1,30,500 | 87,000 | 43,500 |
|
|
|
| By Bank (Cash brought to adj. excess) | -- | -- | 59,167 |
| 3,22,500 | 2,61,667 | 1,96,000 |
| 3,22,500 | 2,61,667 | 1,96,000 |
ABC Ltd A/c
To Realisation A/c | 5,80,000 | By Bank By Equity Shares in ABC Ltd | 1,00,000 4,80,000 |
| 5,80,000 |
| 5,80,000 |
Bank A/c
To Balance b/d (Cash) | 38,000 | By Balance b/d | 1,20,000 |
To ABC Ltd. | 1,00,000 | By O/S Expenses | 40,000 |
To Loose tools | 10,000 | By B’s Capital | 93,667 |
To Vehicles | 50,000 | By A’s Capital | 70,500 |
To Furniture | 25,000 |
|
|
To Investments | 42,000 |
|
|
To C’s Capital | 59,167 |
|
|
| 3,24,167 |
| 3,24,167 |
Q.2. Amar, Akbar and Anthony were carrying on a Partnership business sharing profits & losses in the ratio of 4 : 3 : 1. Their business was expanding rapidly and hence they decided to convert their firm to AB Ltd., a joint stock company on 1/4/2018. The Balance sheet of the firm as on 31/3/2018 was as follows:
Capital |
| Property | 3,60,000 |
Amar | 4,00,000 | Equipment | 2,40,000 |
Akbar | 3,00,000 | Debtors | 3,00,000 |
Anthony | 2,60,000 | Stock | 2,60,000 |
Bank Loan | 80,000 | Bank balance | 40,000 |
Creditors | 1,60,000 |
|
|
| 12,00,000 |
| 12,00,000 |
Adjustments:
- The Co. Agreed to take the assets & liabilities at the following values:
Property - Rs. 4,40,000, Equipment - Rs. 2,00,000, Debtors - Rs. 2,75,000, Stock - Rs. 2,50,000 Creditors - Rs. 1,45,000
2. The Co. Agreed to pay Rs. 8, 00,000 through equity shares of Rs. 10 each and balance in cash.
3. The expenses of liquidation of the firm amounted to Rs. 10,000.
Journalise all the transactions in the books of the partnership firm.
Solution:
Calculation of P.C. & its settlement Assets taken over (at agreed values)
Assets |
|
|
Property - | 4, 40,000 |
|
Equipment - | 2, 00,000 |
|
Debtors - | 2, 75,000 |
|
Stock - | 2, 50,000 |
|
Creditors - | 40,000 | 12,05,000 |
Less: Liabilities |
|
|
Creditors | 1,45,000 |
|
Bank Loan | 80,000 | (2,25,000) |
P.C |
| 9,80,000 |
Journal Entries in the books of partnership firm
|
| Dr. Rs. | Cr. Rs. |
1. | Realisation A/c Dr. To Property A/c To Equipment A/c To Debtors A/c To Stock A/c To Bank A/c (Being Assets transfer to Realization a/c) | 12,00,000 |
3,60,000 2,40,000 3,00,000 2,60,000 40,000 |
2. | Creditors A/c Dr. Bank loan A/c Dr. To Realisation A/c (Being liabilities transfer to realization A/c) | 1,60,000 80,000 |
2,40,000 |
3. | AB Ltd. A/c Dr. To Realisation A/c (Being P.C. Recorded) | 9,80,000 |
9,80,000 |
4. | Realisation A/c Dr. To Bank A/c (Being realization expenses paid) | 10,000 |
10,000 |
5. | Equity Shares in AB Ltd. A/c Dr. Bank A/c Dr. To AB Ltd. A/c (Being P.C. Received) | 8,00,000 1,80,000 |
9,80,000 |
6. | Realisation A/c Dr. To Amar’s Capital A/c To Akbar’s Capital A/c To Anthony’s Capital A/c (Being Realisation gain transferred to Capital) | 20,000 |
10,000 7,500 2,500 |
7. | Amar’s Capital A/c Dr. Akbar Capital A/c Dr. Anthony’s Capital A/c Dr. To Bank A/c (Being Cash paid to Partners) | 10,000 7,500 1,62,500 |
1,80,000 |
8. | Amar’s Capital A/c Dr. Akbar’s Capital A/c Dr. Anthony’s Capital A/c Dr. To Equity Shares in AB Ltd. A/c (Being equity shares received in P.C. Settled to the partners) | 4,00,000 3,00,000 1,00,000 |
8,00,000 |
Working notes:
Partners Capital A/c
| Amar | Akbar | Anthony |
| Amar | Akbar | Anthony |
To Equity Shares | 4,00,000 | 3,00,000 | 1,00,000 | By Balance | 4,00,000 | 3,00,000 | 2,60,000 |
(8L in PSR) |
|
|
|
|
|
|
|
To Cash | 10,000 | 7,500 | 1,62,500 | By Realisation | 10,000 | 7,500 | 2,500 |
| 4,10,000 | 3,07,500 | 2,62,500 |
| 4,10,000 | 3,07,500 | 2,62,500 |
Realisation A/c
To Total Assets | 12,00,000 | By Total Liabilities | 2,40,000 |
To Partners’ Capital |
| By AB Ltd. A/C | 9,80,000 |
Amar 10,000 |
|
|
|
Akbar 7,500 |
|
|
|
Anthony 2,500 | 20,000 |
|
|
| 12,20,000 |
| 12,20,000 |
Q.3. Kavita and Savita are equal partners. Their Balance sheet as on 31/3/2018 is as follows:
Liabilities | Rs. | Assets | Rs. |
Capital |
|
|
|
Kavita | 1,50,000 | Bank | 15,000 |
Savita | 1,40,000 | Fixed Assets | 2,15,000 |
Creditors | 1,00,000 | Stock | 1,00,000 |
Bank overdraft | 40,000 | Debtors | 1,00,000 |
| 4,30,000 |
| 4,30,000 |
The partners sold the business to KS Ltd. a Company on 1/4/2018. The value of goodwill was fluid at Rs. 15,000 and rest of the assets & liabilities were taken at the Balance sheet values. The company paid the purchase consideration through
1) 2500 10% debentures of Rs. 100 each and
2) Equity shares of Rs. 10 each
Prepare the Balance sheet of the Ltd. Co.
Solution:
Calculation of P.C
Assets | Amount (Rs) | Amount (Rs) | |
Goodwill - | 75,000 |
| |
Bank - | 15,000 |
| |
Fixed Assets | 2,15,000 |
| |
Stock - | 1,00,000 |
| |
Debtors - | 1,00,000 | 5,05,000 | |
Less : Liabilities |
|
| |
Creditors | 1,00,000 |
| |
Bank Overdraft | 40,000 | (1,40,000) | |
P.C |
| 3,65,000 | |
Settlement of P.C | |||
10% Debentures (2500 x Rs. 100 each) | 2,50,000 | ||
Equity shares (balance) (11500 shares x Rs. 10) | 1,15,000 | ||
Total | 3,65,000 | ||
Balance Sheet of KS Ltd as on 1/4/2018
Particulars | Note No. | Rs. | |
A) Capital & Liabilities |
|
|
|
1) Share holders funds |
|
|
|
a) Share Capital |
| 1 | 1,15,000 |
b) Reserves & Surplus |
|
| -- |
2)Non Current Liabilities |
| 2 | 2,50,000 |
3) Current Liabilities |
| 3 | 1,40,000 |
| Total |
| 5,05,000 |
B) Assets |
|
|
|
1) Non Current Assets |
| 4 | 2,90,000 |
2) Current Assets |
| 5 | 2,15,000 |
| Total |
| 5,05,000 |
Notes to Accounts:
Particulars | Rs. |
1. SHARE CAPITAL |
|
Authorised Share Capital : | --- |
|
|
Issued Subscribed and Paid Up Capital : |
|
11,500, Equity Shares of Rs.10 each | 1,15,000 |
(These shares are issued to vendors for settlement of PC so no consideration has been received hereupon.) |
|
Total | 1,15,000 |
|
|
2. NON CURRENT LIABILITIES |
|
2500 10% Debenture of Rs. 100 each | 2,50,000 |
(These debentures are issued to vendors for settlement of PC so no consideration has been received hereupon.) |
|
Total | 2,50,000 |
|
|
3. CURRENT LIABILITIES |
|
Creditors | 1,00,000 |
Bank O/D | 40,000 |
Total | 1,40,000 |
|
|
4. NON CURRENT ASSETS |
|
Goodwill | 75,000 |
Fixed Assets | 2,15,000 |
Total | 2,90,000 |
|
|
5. CURRENT ASSETS |
|
Stock | 1,00,000 |
Debtors | 1,00,000 |
Bank | 15,000 |
Total | 2,15,000 |
Q.4. Abhishek, Aishwarya and Aradhya were partners sharing Profit and Loss in the ratio of 2:1:1. Their Balance sheet as on 31/12/2018 was as follows:
Liabilities | Rs. | Assets | Rs. |
Creditors | 60,000 | Bank | 30,000 |
Capital |
| Debtors | 60,000 |
Abhishek | 1,80,000 | Bills Received | 30,000 |
Aishwarya | 1,50,000 | Fixed Assets | 3,00,000 |
Aradhya | 30,000 |
|
|
| 4,20,000 |
| 4,20,000 |
On 1/1/2019; they farmed a Ltd. Co. “Pink Ad Films Ltd.” on the following conditions:
1) Distribute the bank balance amongst themselves.
2) The Company would discharge the P.C. Through
a) 10% Debentures - Rs. 60,000
b) 15% Preference shares - Rs. 1,20,000
c) 15,000 equity shares of Rs. 10 each of Rs. 12 share
3) The partners agreed to share the debentures as : Aishwarya -
Rs. 30,000 & Aradhya - Rs. 30,000
4) The Preference shares were to be allotted in the PSR and the equity shares will adjust the remaining capital balances.
Prepare the Realisation A/c and partner’s capital in the books of the partnership firm and Balance sheet of the new Co.
Solution:
Calculation of P.C.
1) 10% Debentures | 60,000 |
2) 15% Preference shares | 1,20,000 |
3) Equity shares (15,000 x 12) |
|
(Equity Capital - 15,000 x 10 = 1,50,000 & Sec Premium - 15,000 x 2 = 30,000) | 1,80,000 |
P.C | 3,60,000 |
Realisation A/c
To Debtors | 60,000 | By Creditors | 60,000 |
To Bill Received | 30,000 | By Pink Advising | 3,60,000 |
|
| Films Ltd. (PC) |
|
To Fixed Assets | 3,00,000 |
|
|
To Partners’ Capital* |
|
|
|
Abhishek (2/4) 15,000 |
|
|
|
Aishwarya (1/4) 7,500 |
|
|
|
Aradhya (1/4) 7,500 | 30,000 |
|
|
| 4,20,000 |
| 4,20,000 |
*(Profit on Realisation = Rs. 30,000)
Partners Capital A/c
| Abhishek | Aishwarya | Aradhya |
| Abhishek | Aishwarya | Aradhya |
To Bank (PSR) | 15,000 | 7,500 | 7,500 | By Balance b/d | 1,80,000 | 1,50,000 | 30,000 |
To10% Debentures | -- | 30,000 | 30,000 | By Realisation | 15,000 | 7,500 | 7,500 |
To Preference Shares (PSR) | 80,000 | 46,000 | -- |
|
|
|
|
To Equity Shares (Balance) | 1,00,000 | 80,000 | -- |
|
|
|
|
| 1,95,000 | 1,57,500 | 37,500 |
| 1,95,000 | 1,57,500 | 37,500 |
*Note- As the capital and dues of Aradhya are settled through Bank and debentures she will not be given preference and equity shares.
Pink Ad Films Ltd.
Balance sheet as on 1/1/2019
Particulars | Note no. | Rs. | |
Capital & Liabilities |
|
|
|
1) Share holders funds |
|
|
|
a) Share Capital |
| 1 | 2,70,000 |
b) Reserves & surplus |
| 2 | 30,000 |
2) Non Current Liability |
| 3 | 60,000 |
3) Current Liabilities |
| 4 | 60,000 |
| Total |
| 4,20,000 |
Assets |
|
|
|
1) Non Current Assets |
| 5 | 3,00,000 |
2) Current Assets |
| 6 | 1,20,000 |
| Total |
| 4,20,000 |
Notes to Accounts:
Particulars | Rs. |
1. SHARE CAPITAL |
|
Authorised Share Capital : | --- |
|
|
Issued Subscribed and Paid Up Capital : |
|
Equity Shares Capital | 1,50,000 |
15% Preference Share Capital | 1,20,000 |
(These shares are issued to vendors for settlement of PC so no consideration has been received hereupon.) |
|
Total | 2,70,000 |
|
|
2. RESERVES & SURPLUS |
|
Securities Premium (Refer PC Calculation) | 30,000 |
|
|
3. NON CURRENT LIABILITIES |
|
10% Debentures | 60,000 |
(These debentures are issued to vendors for settlement of PC so no consideration has been received hereupon.) |
|
|
|
4. CURRENT LIABILITIES |
|
Creditors | 60,000 |
|
|
5. NON CURRENT ASSETS |
|
Fixed Assets | 3,00,000 |
|
|
6. CURRENT ASSETS |
|
Bills Receivable | 30,000 |
Debtors | 60,000 |
Total | 90,000 |
Q.5. Following is the Balance sheet of Amar and Naman sharing Profit & Loss in the ratio of 2:3.
Liabilities | Rs. | Assets | Rs. |
Capital |
| Plant & Machinery | 4,00,000 |
Aman | 4,00,000 | Equipment | 4,00,000 |
Naman | 5,00,000 | Stock | 65,000 |
Bank Loan | 75,000 | Debtors | 50,000 |
Creditors | 50,000 | Bills Received | 45,000 |
|
| Bank | 65,000 |
| 10,25,000 |
| 10,25,000 |
Aman & Naman sold their business to Mr. Shaman who formed a new company Namaste Ltd. The Co. Took over all the assets at book values excluding equipment which was taken at
Rs. 3,00,000. The Co. Settled the P.C. By issuing.
i) 40,000 equity shares of Rs. 10 each
Ii) 4000 10% Preference shares of Rs. 100 each &
Iii) 11% Debentures - Rs. 1,50,000
Close the books of the partnership firm and prepare the Balance sheet of the Co.
Solution:
Calculation of P.C.
Particulars | Rs. |
1) Equity shares (40,000 x 10) | 4,00,000 |
2) 10% Preference shares (4000 x 100) | 4,00,000 |
3) 11% Debentures | 1,50,000 |
P.C. | 9,50,000 |
Calculation of assets & liabilities taken over for finding out goodwill / Capital reserves
Assets | Amount (Rs) | Amount (Rs) |
Plant & Machinery | 4,00,000 |
|
Equipment | 3,00,000 |
|
Stock | 65,000 |
|
Debtors | 50,000 |
|
Bills Receive | 45,000 |
|
Bank | 65,000 | 9,25,000 |
Less: Liabilities |
|
|
Bank Loan | 75,000 |
|
Creditors | 50,000 | 1,25,000 |
Net Assets |
| 8,00,000 |
Actual P.C. |
| 9,50,000 |
Therefore, Goodwill |
| 1,50,000 |
**Point to Remember
PC > NA = Goodwill
PC < NA = Capital Reserve
Ledger A/c’s in the books of partnership firm
Realisation A/c
To Plant & Machinery | 4,00,000 | By Bank Loan | 75,000 |
To Equipment | 4,00,000 | By Creditors | 50,000 |
To Stock | 65,000 | By Namaste Ltd. | 9,50,000 |
To Debtors | 50,000 | (PC) |
|
To B / R | 45,000 |
|
|
To Bank | 65,000 |
|
|
To Partners’ Capital |
|
|
|
Aman (2/5) 20,000 |
|
|
|
Naman (3/5) 30,000 | 50,000 |
|
|
| 10,75,000 |
| 10,75,000 |
Namaste Ltd. A/c
To Realisation | 9,50,000 | By Equity Shares By Preference Shares By Debentures | 4,00,000 4,00,000 1,50,000 |
9,50,000 | 9,50,000 |
Partners Capital A/c
| Aman | Naman |
| Aman | Naman |
To Equity Shares | 1,60,000 | 2,40,000 | Balance b/d | 4,00,000 | 5,00,000 |
To Preference Shares | 1,60,000 | 2,40,000 | Realization | 20,000 | 30,000 |
To Debentures (Bal) | 1,00,000 | 50,000 |
|
|
|
| 4,20,000 | 5,30,000 |
| 4,20,000 | 5,30,000 |
Equity Shares in Namaste Ltd. A/c
To Namaste Ltd. | 4,00,000 | By Aman (2/5) By Naman (3/5) | 1,60,000 2,40,000 |
4,00,000 | 4,00,000 |
Preference Shares in Namaste Ltd. A/c
To Namaste Ltd. | 4,00,000 | By Aman (2/5) By Naman (3/5) | 1,60,000 2,40,000 |
4,00,000 | 4,00,000 |
Debentures in Namaste Ltd. A/c
To Namaste Ltd. | 1,50,000 | By Aman By Naman | 1,00,000 50,000 |
1,50,000 | 1,50,000 |
Note: As the apportionment ratios are not given, one of the disbursement has to be used for settling the partners capital A/c. (Here debentures are settled based on the partners capital’s pending settlement).
Namaste Ltd
Balance Sheet as on ________
| Particulars | Note No | Rs. |
| Capital and Liabilities |
|
|
1) | Share holder’s funds |
|
|
| a) Share Capital | 1 | 8,00,000 |
| b) Reserves & surplus |
|
|
2) | Non Current Liabilities | 2 | 2,25,000 |
3) | Current Liabilities | 3 | 50,000 |
| Total |
| 10,75,000 |
| Assets |
|
|
1) | Non Current Assets | 4 | 8,50,000 |
2) | Current Assets | 5 | 2,25,000 |
| Total |
| 10,75,000 |
Notes to Accounts:
Particulars | Rs. |
1. SHARE CAPITAL |
|
Authorised Share Capital : | --- |
|
|
Issued Subscribed and Paid Up Capital : |
|
Equity Share Capital of Rs 10 each | 4,00,000 |
15% Preference Share Capital | 4,00,000 |
(These shares are issued to vendors for settlement of PC so no consideration has been received hereupon.) |
|
Total | 8,00,000 |
|
|
2. NON CURRENT LIABILITIES |
|
Bank Loan | 75,000 |
10% Debentures | 1,50,000 |
(These debentures are issued to vendors for settlement of PC so no consideration has been received hereupon.) |
|
Total | 2,25,000 |
3. CURRENT LIABILITIES |
|
Creditors | 50,000 |
|
|
4. NON CURRENT ASSETS |
|
Intangible |
|
Goodwill (refer calculation of net assets) | 1,50,000 |
Tangible |
|
Plant & Machinery | 4,00,000 |
Equipment | 3,00,000 |
Total | 8,50,000 |
|
|
5. CURRENT ASSETS |
|
Stock | 65,000 |
Debtors | 50,000 |
Bills Receivable | 45,000 |
Bank | 65,000 |
Total | 2,25,000 |
