unit-3

Absonbsticn and Exteid

BecongtaaBion.
Amalgantion :
Meaning,
hen exiting iompaniesiCombine
togather ofom a raw. Compant
analgandian
Absotpon the busine
Company
When one erisung company akos over
xisingtopanies is alssoxptian
Extekd Reconsttution
en on exisbing -tonpañgis liquioted. anda
Mth tehe he shabe hodess to
Compans is Qomed Wh
tote oier ts Laihesst is extenal seconstraction
Types Amalgmoion:
In the ntunedmergp:
In te noue puncase
f.
1lu_hxoion:.
Raan td agnad td puschase he business
) Qot ench o the b,co Shanes
krishndn HA.9 Shae_ in Raman tdAS.I6 ench in
will. be issuod ot an. AS.J0 each
In addtion R6. per
) 8). dosartunes chshane' cosh aso N be paid
setle he RS.bo,oo q RS0,000 t be issuad to
) AS.10,0o il e dalbatunes in kisknon 1td
binding paid touasds enpenses
átlate puchase considooion
 asstd. saing agshaot baanie he(8)
as.o t Tluststion
3:.
consiclosation puschase calulate
humet. in
A,co tahich
shereinSpinpeld Bs.50.Ahané
Wn. or
shae po 15
RS. Tnaket
eahange aad
ield Sports shares
in &s,lo
the and cash Shase 0Bax
in o
RSpaymont V)A
Vender
he
3,0o,o0o
in Rs. dabuntune_
oa dischange
Aaf The w)
BS.S,00 albsorption
o costo payoit The si)
Jo,o0o iallitie_.
RS. trade ovexiat
he Dhe.taking.
abobed issta field spring
tlhustucion
2:
2,%0,00
40,000 RS.lo,000X
kri_hnan
!A
of
holders shane for paid. cash
,4o,0: RS,2 12X IO,000X
krishnan.
A bolder_
in
eissua.or
shae Shanes
to
considesaion punchase calealation
of
Soion1:
 AS
liallies poad Assets
shane captal
8l-pukrance Shanes
6,25,00
hve_tnants 3,00,x0
RS. foo each 3,15,000 unent ASerts 2,s0, on
quty shaes af
AS.Joeach 1,50,000
banetal Aeseve 4,50,000
1. debunlunoS 3,50,000
Cunent. lialsity 1,30,000

21,15,000 21,1s,0o0

Romuy d agred to take ver the bu~iness

caliaote e puuchase considleodion rdo net

pumium
Aomy
qAabertuses o
book nlo,the vetmar at ponunrt assets OR

alaate punchase coNSicdertion wdan net

pagmarnt method
to dischang the . dolbntunts
at a piaium oio7 g iasuing q%. deb snlngs"
Roy d
ipunante Shaes ane dischanga ct a pramilu
tachin AbugPe Shane_,o< BS100
() For 2
eáyikg shane_
 AS.lo each in. RoTM d will
be issuadin addio to cash pyrreat Rs. 3 pen.
equty shanes in Samy td
slution 3:
caludation ot puchase consideation

I,81, 50o
6,25,000Xlo7 = ,62,500
Cl6,15,O00 +),62,So0)
Investmert 3,00,000
Cunent ASSet
iso,0O00 X1o =25000 a,s0,000 2,25,000
Total Assets 25000) 23,12,500

a50,0oX lo 3,S0,000
35,000
3,8s,o00
2,50,000 6,35,00o

paochase Consideration l6,I1,S0

 balos. shoun asluon ag
ban companie__
haue to e assetsa nsgetiicns
the
1996. Atobet 31_t onCorcern
as combines the Oug
toagnd haue 1ta, Shuam and. t, Rom
lhu_txot4:ion
natna. Amalgamaion$
the in
,2s0001
2,2s,00 Shacsx
1soc0 cosh
15000
l,2s,c0
1,
tpuwcäing
shoy Eqjsty
RS.l0 I00XIo
A,12,500
315000Xh0
puxchasing
'co
pralrente shanes
in
igpurchasin
Shaujes
in shases
in putiuala;
RS Cash
tal
idenation calalaticn
 Palane sheet as on 3)-1n48
Aiaiies
shase Captal: Aard &bidurg s,o,o00l 3,00,0
shanes a plart 4
RS.b each 10,00p00 spo,coo nachineU .2,00,cto 2,So,000
Reserve Ard So,00 So,00
So,c00 So,000 Antue ,0,000
Cteditoss . 80,00 S000 btock 1,50,000 20,0c0
Dator_ 1,20,Qco a6,oc
Bank So,p00 10,000
Ln,30,0c06,50,000 ,30,00b,So,000

plepane the lalarce heat Rajesh td, asuming

a) he entite pucase pYice paid oll In he orm
c squity shanes Rs.JDo each in Raish d.
he
)The amalganoion is in naBune
saludion a.:
aludation punchase consid»ation
. Shases to be issuac lor shane

2. cash to be paid to-'SportÙ

A0,000 XRS. 20 ,00,00

Total puncdnse conaidlzaion. 32,0,00

 Solution :.
alealaion ah punckase
paotialm_ Shyam
,3,o00
-Total assets take ou absets)
e)Total iallities talae over &0,000 50,00
Ciedtor_inm 4,Sa,0006,9,0h
Total plunchase psice J6,50,000
((o,50,o00 t6, o0, 000)
) Equata shae captal L5,co,000
o,m,c00+
price 50,co
adiustel to
ErCeSS
Yesen L54,000

ialilties
shae captal Land.
Cio,00,o0+5,00,0) 15,o0,00 8,0,000
acngal Resene (5,0,000t
Creditar_ 1,30,000 3,0,00
(K0,00t so,00) ant
maLhinerg4,60,a0
Gnondoil S0,00
nite ,1o,000
,o,000
146,00
Bank 6o,o

,80,0
 Amalgomacn in the nabune oof pucase
Amalgamaion-lump
Tlustrtion5 i t f
Ravan . td and Sivan td nue. agyud.to amalgamote.
toe.over
DSL) Compnny, Sivaam, td.has bson ocmadto eolance
te nuning% Coñtems as on-31.12.1995. ha holowing
Shats sho the position oh the companies Krnlganoirg
jablties Raman2td Sivontd ASeets ROnan Sivan
AS.
Goduil])
Aane captol
AS. 10 eAsh 20,000 50,000 plant 20,000
Guenena Tunitue %000
seSexve 16o00
capBal <suncag
casho onk 12,c00 1000
TRServe 000
Income
p1ale
Koan
banik 10,000 6,000
Gtedtors lo,00 600

bo,000 T6,00 60,000

Sivonam td. tooh oVer al the assetsand. Jiabalies.
a both the tysloox Componies tbeok lalans etept
Bshot bank, ckedktors and the ganduil &sian td.
which ns Consideredl othless
he puchase considention lns agad at Rsbo, oo0
le he
enuty ShoeS a As.10 ench ue issud
pinchse price "ot boh he Canpsies.
aCash od ban ch boh the companies Lnsdiscout and.
suient to setle theit chedktors ad o.
 hquidation epanses
P the egyixed. to give importat
P yolu ae tanislonor d. the
(ómpaniesiand
to cosete baoks o the
shat in to books e tonslon
inlonnl and balonc amalgamation is i heo
bogaontg,assaning hat he
Solution 5 :

Business pochase Al. Y I,co,cco

6o,co0
To-Sivan td o,o0
(Being pundase prke paid)
plst
Aunitune
Alc D 24,00
Sundy Daltos ae D(

O,o5,000
(Bnlanirg higuebsa)
bpoo) 2),C00
, co, c00

taen oyer)

Jyo,too
eing punose pie ks und. 1,ob, 006
 Realisaticn Al
Aanan t edqes alc
paadicula_ RS pastialas
To pant loan bank 10,000
To Aonite
To"stoc. Sundy credita
To Sundy Dolts loo
To Bank expenses

Ci2000-9000) 3000

To haeholders+t
20,000

Pankal
pazziaalass pouticalans
TO balonce 12,000

By Bank erpses
(ealisotin ealartirg
12000
2,o00
shane holdes al.
paaticulans AS paotitudans
TO Svgm t 6o,co0 By ienexal Resen l6,b69
shoe Kapital a0,600
By Pealisatjon Ae 20,000
bo,o00 bo,ooo
 Rendisoion
Sivantd
pontiualan_ pantiula»s
To plant 20,000 1

bünk
To. Quanitue 12000

To Stock
To dabtor_ ,00
Bu Creditors boo
To Bank
C1o00- 5A0o) B4 shase bolda
()
(bcoo -Go0)SÀ00. ealanting 200

58,b0
Aank
pantitalans paxtialans RS
By ckeditor_S00.
Csooo -6o)
Bank
etpeDse

1000

pantitlas pastiadas
To pl alo booo shane capita 50,00
To Aealsotion loss caphal
To Grool will 6000 Reseve
To shone.s in Siv.

5400
 Ne
I. shase aptal
I$5uod, pmid upcopral
1,06,000

term booLD0
an tom bank
I. Tangible assets, rrf
phut 3,000

ealane sheet SivaXamtd as on 3).12A93

patias. Note No
1. Eqjuity liabities
I.
Shoe captal 1,00,000
Resene Spls
term laliies
J. ASSets
Tongilhe Hssets 3 54,00
Intagide nssets 21,000

Guvart ASses
stock 2000
6 t000
,26,000
 hustain&
Pserption:
Abla td auing acapital Rs.0, 0,o dvidad.
lo,000 shanes a RS. 00 anch A_.15 mid up ) aod.
into notionolTimbe
Ressalind ,So,o60 ns alosorbed bye
a capital o RS.Jo,0,000 aioointo 4o,o0
Shaes a As. J00 bo anch(AS.bo,o0 paia. up) and ResDwe
hane"CNUN shaes
und Rs. YG,00,000 0n tha texns 1:N0 5 shaes
patliy paid ts orginal. papax edge Niounts.

alcalabon ol punchase considontion

shane's in aodal itd.sshaesill é
lo,000 shes =12,S00 shae

I2500X BS.bo B$.3,50,000

Aesene lund. absor bed by NT td

Ralisation los$ Rs 1,50,000

-pastialank
To Realisation 1,50,000 B shauesin

so,00
 The laance shgat as on x td Mibd.:

lialalties Bssets
shane capital 80,000 aspoo Cash in hond 100So
Sundy cseditor_ ao Cash at ank
Reserve^ 3soo30
pla ACcout lo00, plant
stock
12000o0
1S000

30,000 16,00
pott.en l0, c00 3o0
93000 3l000 93000
The lalace Shat al N Company x,y td.
which wos to oNer the
stote he Nunbet Õnpay Can and
shaes in the nusn campny ihich wll
le aJoted to the Shoveholders a old
Some valua
company assums

colculate h No shoes to be capitak

aptal issud to
Company
X
93000 93006 3looo
5 Sund Creditor 3060 )000
Tta puschae prie 90,000 30,000
Nus shoES
90,000 30,000
 X,1
elance sha as onAssels RS
Aiaaies AS.
Cash in onc
shane cap:tal 3,80
1200 Shae$
potorá 28,800
3o,o)
sandg
plan
stock 23,0
Sunàuickedt
3oo0leco premise_
patznds I3, cco

,2,,000.