1. Arya Tutorials Limited came up with a public issue of 30,00,000 equity shares of Rs. 10 each at Rs. 15 per share.

A, B & C took underwriting of the issue in 3:2:1 ratio. Applications were received for 27,00,000 shares. The marked applications were received as under: A 8,00,000 B 7,00,000 C 6,00,000 Commission payable to underwriter is at 5% of the face value per of the shares. Compute the liability of each underwriter as regards the number of shares to be taken by them and the commission payable to them. 2. The balance sheet of A Limited and B Limited as at March 31, 2011 are as follows: Liabilities A Ltd B Ltd Equity Shares 20,00,000 12,00,000 of 10 Each General 4,00,000 2,20,000 Reserve Assets A Ltd B Ltd Sundry 26,00,000 14,00,000 Assets 40000 4,00,000 equity shares of B Limited 30,00,000 18,00,000

Creditors Total

6,00,000 3,80,000 30,00,000 18,00,000

A limited absorbed B Limited on intrinsic value basis on March 31, 2011. The purchase consideration was to be paid by issue of fully paid equity shares of A Limited. A sum of Rs. 1,00,000 is owed by A Limited to B Limited. Rs. 1,20,000 is also included in the stock of B Limited with cost plus 20% valuation. Give journal entries in the books of A Limited and B Limited for the absorption. Prepare balance sheet of A Limited after absorption.