In amalgamation of companies minimum *two or more *companies need to be there .

Company which is amalgamated into another company is called as transferor company.

The Company which is amalgamating company is called as transferee company.

*Accounting standard 14 * is applicable for amalgamation of companies.

Amount which is paid by transferee company to transferor for taken over of its business is called as
*Purchase consideration *.

Purchase consideration is paid or payable by a ratio which is known as exchange ratio.

MCQS

As per vertical balance sheet fixed assets are called as non - current assets.

Detailed information about the content of vertical balance sheet is known as notes to accounts.

MCQS

Amalgamation In the nature of merger is account by pooling of interest.

Accounting treatment for in the nature of (absorption or take over) amalgamation is carried out
purchase method.

In pooling of interest method assets and liabilities of old company are recorded at book values in the
books of new company.

Assets and liabilities of old company are recorded at fair values in case of purchase method in the
books of amalgamating company.

Amalgamating(new) company appoints *__certified value * to find out the fair values of assets and
liabilities of Amalgamated(old) company in case of purchase method.

Transferee new company - amalgamating

Transferor old company - amalgamated

Nature of purchase - pooling of interest

All assets are carried out of their old company

In the nature of purchase method the assets and liabilities old company are recorded at their fair
value.

In the nature of pooling method the assets and liabilities are recorded at their book value.

MCQS

In amalgamation the person look after legal proceedings of regarding of amalgamation on behalf of
old company is called as liquidator

In amalgamation when the PC is more than the assets received by transferee company, that results
in goodwill
When the assets are more and purchase consideration paid for amalgamation is less that results in
capital reserve

Profit up to date of incorporation is capital profit.

Date of taken over is 1 Jan 2018, the company was incorporated on 1 may 2018 accounts are closed
on 1dec - 1:2

The method of redemption are specified at the time of issue of debentures.

As per companies act, a company is required to create debenture redemption reserve =50%of issue
side.

When the issue of debentures is more than for 18 months company has to appoint debenture
trustee.

DRR should be created of free reserve or divisible profits.

1.Value paid for buying/selling of business is called as consideration.

2.Purchase consideration is value

3.Date of incorporation is date on which company come into existence.

4.profit prior to incorporation is capital profit

5.Loss prior to incorporation is in goodwill

Profit

6.Excess of purchase price paid over net asset is considered as goodwill.

7.Director fees transfer to post incorporation period.

8.Expenses incurred for staring of a company are called as preliminary expenses.

9.Dividend is a distribution of profit.

10.The first step of allocation of income and expenditure between pre and post incorporation is
allocation of gross profit.

11. No company can issue irredeemable preference share.

12. A company may issue preference share for maximum 20 years.

13. At the time of redemption preference shares should be fully paid.

14. capital redemption reserve has to be created out of divisible profit only.

15. At the time of redemption preference share need to be fully paid up.

16. Partly paid preference shares can not be redeemed.

17. Transfer to capital reserve can be made from divisible profit.

18.Preference shares can be redeemed fresh issue out of divisible profit.

19. Following is the example of restricted or non divisible profit CRR.

20.A company can not issue irredeemable preference share.

21. S Ltd. Has to redeem preference share of the value of rs. 12 lacks for which company has issued
6000 equity shares of rs.100 each at a premium of 10% calculate the amount to be transferred to
CRR

Ans : 600000

22. CRR stand for Capital Redemption Reserve.

23. As per company act 2013 company has to prepare balance sheet in vertical format.

24. Horizontal is old Format of preparing balance sheet.

25. Details related to information mentioned in the main financial statements of a company are
called as note to account.

26. As per vertical balance sheet fixed assets are called as non current assets.

27.NCLT stand for national company law tribute.

28. Capital reconstruction provisions are given in section 66 companies act 2013.

29.For issue of bonus share Capital Redemption Reserve is utilised by a company.

30.Surplus Or credit balance in the capital reduction a/c will be transferred to capital reserve.

31. Preliminary/Miscellaneous/profit and loss debit balance s an example of fictitious assets.

32. Additional information about contains in the balance sheet is given in Or explained in notes to
account.

33.1lack 7% preference share of rupees 20 each. Preference share to be reduced to 15 per share
calculate the amount of sacrifice made by preference share holder.

Ans : 500000

34. 6% debenture of rupees 100 each total number of debenture 1 lack. Debenture holders are
ready to forgo rupees 60 per debenture. Under internal reconstruction what will be the amount of
new debenture holders.

Ans : 40 each

35. Investment costing rupees 24000 given to the bank for a overdraft of rupees 16800 the capital
reduction a/c will de debited for rupees

36. XYZ Ltd. Has 80000 equity share of rupees 10 each. They decided to reduce share to rupees 8 per
share the reduction will be rupees

37.For amalgamation of companies minimum two companies need to be there.

38. Company which is amalgamated into another company is called as transferor company.

39. The company which is amalgamating company is called transfere company.

40. As 14 accounting standards is applicable for amalgamation.

41. Amount which is paid by transferee company to transferor company to transfer company to
taken over of its business is called as purchase consideration.

42. Purchase consideration is paid Or playable by a ratio which is know as exchange ratio.

43. Transferee company is also called as amalgamating.

44. Transferor company is also called as amalgamated.

45. X Ltd. takes over business of Y Ltd. The purchase consideration as follows 1000 preference shares
of 100 each fully paid up and 200 debentures of

46. As per Es 14 amalgamation can be accounted by two number of methods.

47. Amalgamation in the nature of merger

48. Accounting treatment for amalgamation in the nature of absorption is carried out by purchase
method.

49. In pulling of interest method assets and liabilities of old company are recorded at book values.

50. Assets and liabilities of old company are recorded at fair value in case of purchase method in the
books of amalgamating company.

51. Assets and liabilities of amalgamated company in case of purchase company certified valuer.

52. In amalgamation the person look afters legal procedures regarding amalgamation on behalf of
old company is called as liquidator.

53. In amalgamation when the purchase consideration is more than the assets received by transpree
company that results in a goodwill.

54. When the assets are more and purchase consideration paid for amalgamation is less then that
results in capital reserve.

55. As per net assets method pc is considered different between agreed value of assets taken or
agreed value of liability taken.

56. On merger vendors company are liquidator

57.As per As 14 amalgamation is of two types Amalgamation in the nature of purchase

58. Amalgamation required approvals of high court.

59.approval by 75% of shre holder is required for implementation the scheme of in the nature of
purchase.

60. In case of mergers 90% of company should taken over by new company.

61. Profit up to date of incorporation is capital profit.

62. Date of taken over is 1/1/2018 company was incorporated on 1/5/2018 account are closed on 31
December calculate time ratio

Ans : 1:2

63.The method of redemption of debenture are specified at the time of issue of new debenture.
64.As per companies act a company is required to create debenture redemption reserve equal to 50
% of issue size.

65. when the issue of debenture more than 18 months company has to appoint debenture trustee.

66. DRR should be created out of pre reserve or divisible profit.

67.