Question

A company issued 30,000 fully paid-up shares of ₹ 100 each for purchase of the following assets and liabilities from Sharma Co:

Plant	₹ 7,00,000	Stock-in-Trade	₹ 9,00,000
Land and Building	₹ 12,00,000	Sundry Creditors	₹ 2,00,000

You are required to pass necessary journal entries.

Answer 1

Journal Entries
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Goodwill A/c	Dr.		4,00,000
	Plant A/c	Dr.		7,00,000
	Stock-in-Trade A/c	Dr.		9,00,000
	Land and Building	Dr.		12,00,000
	To Sundry Creditors A/c				2,00,000
	To Sharma & Co				30,00,000
	(Asset purchased and liabilities accepted from Sharma & Co)
	Sharma & Co	Dr.		30,00,000
	To Share Capital A/c				30,00,000
	(30,000 shares of Rs 100 each issued to Sharma & Co.)