Difference between amalgamation under the nature of merger and purchase?

Answer 1

opening entries in the case of amalgamation in the nature of merger (pooling of interest method)

1) for purchase consideration payable:

Business purchase a/c dr

To liquidators of transferor(seller) company

2)for incorporation of assets,liabilities and reserves:

various assets(taken over) a/c dr

general reserve or (capital loss)a/c dr

(bal fig)

To creditors

To bills payable

To reserves(other than general reserve or p/l A/c when general reserve is not there)

To p/l a/c

To business purchase a/c

To general reserve a/c (capital gain)

(bal fig)

BUT WHERE AS IN THE NATURE OF PURCHASE METHOD:

purchase consideration remains the same ,but

for incorporation of assets and liabilities:

plant and machinery a/c (revised value) dr

land and building a/c (revised value) dr

other fixed assets a/c (revised value) dr

debtors a/c (revised value) dr

stock a/c (revised value) dr

bank a/c dr

goodwill a/c (bal fig)

To creditors

To bills payable

To other liabilities

To capital reserve a/c (bal fig)

all other format remains the same... for more information refer bbm 3rd sem corporate accounting..:)