Financial Reporting and Ethics - The Institute of Chartered ...

AMALGAMATION, ABSORPTION AND RECONSTRUCTIONAssets:Goodwill 75,000Buildings ( 233,000 - 10% of N233,000) or 233,000 x 90% 209,700Stock ( 35,000 - 10% of N35,000)or 35,000 x 90% 31,500Bill Receivable ( N4,500 - 10% of N4,500) or 4500 x 90% 4,050Debtors ( N27,500 - 10% of N27,500) or 27,500 x 90% 24,750Liabilities (Debentures) (100,000)Purchase consideration 245,000Realisation AccountGoodwill 50,000 Debentures 100,000Buildings 233,000 Northern ChemicalCompany Ltd (PC) 245,000Stock 35,000 Shareholders (Loss) 8,000Debtors 27,500Bill Receivable 4,500Cash (Liquidation cost) 3,000 ________353,000 353,000Northern Chemical Company Limited AccountNRealisation Account 245,000 Shareholders Account 165,000_______ Cash Account 80,000245,000 245,000Note: The shares allottable to shareholders of Middle Belt Company werearrived at follows:1,500 shares of100 each 150,000Share premium 1,500 x 10 15,000165,000Cash 80,000Purchase consideration 245,000Cash AccountBalance b/d 50,000 Creditors 30,000Northern Chemical Company 80,000 Shareholders 97,000_______ Realisation exp. 3,000130,000 130,00043