CA Foundation Exam > CA Foundation Questions > X Ltd. Agreed to purchase thebusiness of Rahi...
Start Learning for Free
X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.?
Most Upvoted Answer
X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- ...
Purchase Consideration Calculation:
Assets taken over = 90% of Rs. 4,40,000 = Rs. 3,96,000
10% discount on assets = Rs. 39,600
Net assets taken over = Rs. 3,56,400
Liabilities taken over = Rs. 1,60,000
10% rebate on liabilities = Rs. 16,000
Net liabilities taken over = Rs. 1,44,000
Goodwill = Rs. 40,000
Purchase Consideration = Net assets taken over + Net liabilities taken over + Goodwill
= Rs. 3,56,400 + Rs. 1,44,000 + Rs. 40,000
= Rs. 5,40,400
Explanation:
To determine the purchase consideration, the following steps are taken:
1. Calculation of Net Assets:
Assets taken over at 90% of Rs. 4,40,000 and a 10% discount on assets results in a value of Rs. 3,56,400.
2. Calculation of Net Liabilities:
Liabilities taken over at Rs. 1,60,000 and a 10% rebate on liabilities results in a value of Rs. 1,44,000.
3. Calculation of Goodwill:
Goodwill is deemed worth Rs. 40,000.
4. Calculation of Purchase Consideration:
The purchase consideration is calculated by adding the net assets taken over, net liabilities taken over, and goodwill. The final purchase consideration is Rs. 5,40,400.
This method of calculating the purchase consideration takes into account the value of the assets and liabilities of the business being purchased, as well as the agreed-upon value of goodwill. The discounts and rebates applied to the assets and liabilities reflect the conditions of the sale agreement.
Assets taken over = 90% of Rs. 4,40,000 = Rs. 3,96,000
10% discount on assets = Rs. 39,600
Net assets taken over = Rs. 3,56,400
Liabilities taken over = Rs. 1,60,000
10% rebate on liabilities = Rs. 16,000
Net liabilities taken over = Rs. 1,44,000
Goodwill = Rs. 40,000
Purchase Consideration = Net assets taken over + Net liabilities taken over + Goodwill
= Rs. 3,56,400 + Rs. 1,44,000 + Rs. 40,000
= Rs. 5,40,400
Explanation:
To determine the purchase consideration, the following steps are taken:
1. Calculation of Net Assets:
Assets taken over at 90% of Rs. 4,40,000 and a 10% discount on assets results in a value of Rs. 3,56,400.
2. Calculation of Net Liabilities:
Liabilities taken over at Rs. 1,60,000 and a 10% rebate on liabilities results in a value of Rs. 1,44,000.
3. Calculation of Goodwill:
Goodwill is deemed worth Rs. 40,000.
4. Calculation of Purchase Consideration:
The purchase consideration is calculated by adding the net assets taken over, net liabilities taken over, and goodwill. The final purchase consideration is Rs. 5,40,400.
This method of calculating the purchase consideration takes into account the value of the assets and liabilities of the business being purchased, as well as the agreed-upon value of goodwill. The discounts and rebates applied to the assets and liabilities reflect the conditions of the sale agreement.
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.?
Question Description
X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.?.
X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.?.
Solutions for X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? defined & explained in the simplest way possible. Besides giving the explanation of
X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.?, a detailed solution for X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? has been provided alongside types of X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? theory, EduRev gives you an
ample number of questions to practice X Ltd. Agreed to purchase thebusiness of Rahim and Karim as on 31-03- 2003. Their assets on that date were Rs. 4,40,000 and liabilities to outsiders Rs. 1,60,000. For the purpose of Sale, it is agreed that 90% of the assets alone will be taken over at 10% discount. Liabilities are to be taken subject to rebate of 10%. Goodwill is deemed worth Rs. 40,000 Ascertain Purchase Consideration.? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup