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How they calculate equity amount of 4,20,000for PC calculation. Explain part d of question.
Answers (25)
Thread Starter
Sathiya BamaHow they find this 40000 shares?? Actually in Balancesheet has 3 lac of 10 each in vayu Ltd, so it could 30000 shares only na? How they given 40000 shares?
Here net asset method is used to calculate the PC..
Thread Starter
Sathiya BamaHow they find this 40000 shares?? Actually in Balancesheet has 3 lac of 10 each in vayu Ltd, so it could 30000 shares only na? How they given 40000 shares?
Ok.. In point d it is said that " issued equity shares @5% premium" That is, equity shareholders of vayu limited are given. , equity shares of hari ltd at 5% premium The number is not given So we follow net asset method
Thread Starter
Sathiya BamaWhether NATO ans will b the purchase consideration ahh ??
Yes.. There are 3 methods to calculate purchase consideration.. All are correct
Christeena Ambel
Yes.. There are 3 methods to calculate purchase consideration.. All are correct
Okk, I didn't got clarity about my doubt
Thread Starter
Sathiya BamaOkk, I didn't got clarity about my doubt
Can u please ask yr doubt clearly
Thread Starter
Sathiya BamaHow they find this 40000 shares?? Actually in Balancesheet has 3 lac of 10 each in vayu Ltd, so it could 30000 shares only na? How they given 40000 shares?
It is my doubt, how they find the values of equity share capital
Thread Starter
Sathiya BamaIt is my doubt, how they find the values of equity share capital
1. First we calculated purchase consideration 2. Then we calculated the amount that should be given to pref shareholders. 3. Now do 1-2.. That is, the balance amount left is for equity shareholders. Balancing figure
Christeena Ambel
1. First we calculated purchase consideration 2. Then we calculated the amount that should be given to pref shareholders. 3. Now do 1-2.. That is, the balance amount left is for equity shareholders. Balancing figure
How u do like this, Becoz my sir told there will arising of capital reserve or good will, so fOr this we knw the values of asset, liability and purchase consideration, For pc calculation , I calculated the preference and equity. ... For equity , I calculated and I got this 30000 shares+5%= 31500 shares ..= 315000 lac But in ans they given 420000 , for this they taken NATO= PC
Thread Starter
Sathiya BamaHow u do like this, Becoz my sir told there will arising of capital reserve or good will, so fOr this we knw the values of asset, liability and purchase consideration, For pc calculation , I calculated the preference and equity. ... For equity , I calculated and I got this 30000 shares+5%= 31500 shares ..= 315000 lac But in ans they given 420000 , for this they taken NATO= PC
My question is how they taken NATO has PC ??
Thread Starter
Sathiya BamaHow u do like this, Becoz my sir told there will arising of capital reserve or good will, so fOr this we knw the values of asset, liability and purchase consideration, For pc calculation , I calculated the preference and equity. ... For equity , I calculated and I got this 30000 shares+5%= 31500 shares ..= 315000 lac But in ans they given 420000 , for this they taken NATO= PC
I am not understanding what u are asking. But 1 thing, 30000+5% is completely wrong.. That 5% premium is on new company's share
Christeena Ambel
I am not understanding what u are asking. But 1 thing, 30000+5% is completely wrong.. That 5% premium is on new company's share
Okk, then do according to this 1lac shares of 10 each , so 1 lac shares+ 5% premium=1,15,000 shares. So amt will b 11,50,000 only na?
Thread Starter
Sathiya BamaOkk, then do according to this 1lac shares of 10 each , so 1 lac shares+ 5% premium=1,15,000 shares. So amt will b 11,50,000 only na?
Yaarr... We don't even know the number of shares.. Thats why calculated it using net asset method.. From where this 100000 came..? I don't know how to make u understand.. Please spend some time analysing.. U will understand.. They told.. Shares will be issued at 5% premium.. We have to calculate the number of shares
Thread Starter
Sathiya BamaHow u do like this, Becoz my sir told there will arising of capital reserve or good will, so fOr this we knw the values of asset, liability and purchase consideration, For pc calculation , I calculated the preference and equity. ... For equity , I calculated and I got this 30000 shares+5%= 31500 shares ..= 315000 lac But in ans they given 420000 , for this they taken NATO= PC
There may be a case where there is no goodwill or capital reserve. Secondly, the question does not mention the number of shares to be issued.
CA Suraj Lakhotia Admin
There may be a case where there is no goodwill or capital reserve. Secondly, the question does not mention the number of shares to be issued.
https://youtu.be/p-9WfmRDbo0 You can watch the revisionary lecture. If you need more clarity, you can buy the chapter when individual module sale opens.
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