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Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction?
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Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a s...
Journal Entries for Purchase of Business by Akansha Ltd.
Introduction:
The question pertains to the purchase of business by Akansha Ltd. from Utsav Ltd. The purchase was made for a sum of Rs. 12,00,000/- out of which Rs. 2,00,000/- was paid in cash and the balance was settled by issuing 8% preference shares of Rs. 100/- each at a premium of 25%. In this response, we will pass the necessary journal entries in the books of Akansha Ltd. for the above transaction.
Journal Entries:
The following journal entries need to be passed in the books of Akansha Ltd. for the above transaction:
1. Entry for Purchase of Business:
Date: 1st April 2016
Particulars: Debit: Credit:
Goodwill A/c - 1,50,000
Fixed Assets A/c - 12,00,000
Current Assets A/c - 1,50,000
To Liabilities A/c 2,00,000
Cash A/c - 2,00,000
Explanation: In this entry, we debit Goodwill A/c and Fixed Assets A/c with the value of assets acquired from Utsav Ltd. We also debit Current Assets A/c with the value of current assets acquired. We credit Liabilities A/c with the value of liabilities assumed by Akansha Ltd. We also credit Cash A/c with the amount paid in cash.
2. Entry for Issuing Preference Shares:
Date: 10th April 2016
Particulars: Debit: Credit:
Bank A/c - 10,50,000
To Preference Share Capital A/c 8,00,000
To Securities Premium A/c 2,50,000
Explanation: In this entry, we debit Bank A/c with the amount received on issuing preference shares. We credit Preference Share Capital A/c with the value of preference shares issued by Akansha Ltd. We also credit Securities Premium A/c with the premium received on issuing preference shares.
Conclusion:
In conclusion, we have passed the necessary journal entries in the books of Akansha Ltd. for the purchase of business from Utsav Ltd. It is important to note that the entries are passed as per the accounting standards and principles.
Introduction:
The question pertains to the purchase of business by Akansha Ltd. from Utsav Ltd. The purchase was made for a sum of Rs. 12,00,000/- out of which Rs. 2,00,000/- was paid in cash and the balance was settled by issuing 8% preference shares of Rs. 100/- each at a premium of 25%. In this response, we will pass the necessary journal entries in the books of Akansha Ltd. for the above transaction.
Journal Entries:
The following journal entries need to be passed in the books of Akansha Ltd. for the above transaction:
1. Entry for Purchase of Business:
Date: 1st April 2016
Particulars: Debit: Credit:
Goodwill A/c - 1,50,000
Fixed Assets A/c - 12,00,000
Current Assets A/c - 1,50,000
To Liabilities A/c 2,00,000
Cash A/c - 2,00,000
Explanation: In this entry, we debit Goodwill A/c and Fixed Assets A/c with the value of assets acquired from Utsav Ltd. We also debit Current Assets A/c with the value of current assets acquired. We credit Liabilities A/c with the value of liabilities assumed by Akansha Ltd. We also credit Cash A/c with the amount paid in cash.
2. Entry for Issuing Preference Shares:
Date: 10th April 2016
Particulars: Debit: Credit:
Bank A/c - 10,50,000
To Preference Share Capital A/c 8,00,000
To Securities Premium A/c 2,50,000
Explanation: In this entry, we debit Bank A/c with the amount received on issuing preference shares. We credit Preference Share Capital A/c with the value of preference shares issued by Akansha Ltd. We also credit Securities Premium A/c with the premium received on issuing preference shares.
Conclusion:
In conclusion, we have passed the necessary journal entries in the books of Akansha Ltd. for the purchase of business from Utsav Ltd. It is important to note that the entries are passed as per the accounting standards and principles.
Community Answer
Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a s...
Assets Dr. 13,50,000
goodwill. BF 50,000
to liabilities. 2,00,000
to utsav. 12,00,000
Utsav. 2,00,000
to cash. 2,00,000
utsav. 10,00,000
to 8 pref sh. 8,00,000 (8,000*100)
to sec prm. 2,00,000(8,000*25)
goodwill. BF 50,000
to liabilities. 2,00,000
to utsav. 12,00,000
Utsav. 2,00,000
to cash. 2,00,000
utsav. 10,00,000
to 8 pref sh. 8,00,000 (8,000*100)
to sec prm. 2,00,000(8,000*25)
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Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction?
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Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction?.
Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction?.
Solutions for Akansha LTD. Purchased the buissness of utsav LTD. On 1.4.2016 for a sum of 12,00,000 Rs the assets of utsav LTD. were 13,50,000 Rs and liabilities 2,00,000 RS. 2,00,000 RS. was paid in cash on 5.4.2016 and for the balance , 8% preference shares of 100Rs each were issued on 10.4.2016 at a premium of 25% . Pass necessary journal entries in the books at akansha LTD. For the above transaction? in English & in Hindi are available as part of our courses for Commerce.
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