IndigoLearn

Forums

All Topics Accountancy Auditing Corporate & Other Laws Direct Taxation Indirect Taxation Financial Management Economics Costing Strategic Management Maths & Stats Exams Others AFM Financial Reporting CFA Level I

Amalgamation of companies

Accountancy

Ill 9(ICAI study material) Adjustment 4 Why they do for this journal enry?

Gomathi K

CA Final

★ 40K+

27-Aug-20 10:10

299

Answers (1)

Mutual owing are cancelled as P Ltd and Q Ltd are amalgamating into 1 company. The liquidation expenses of P Ltd paid by Q Ltd is over and above the consideration payable to Q Ltd. It is treated as Goodwill. As we have capital reserve balance, it is adjusted with Goodwill, to get the net effect of amalgamation.