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SOLVE AMALGAMATION PROBLEM IN 7 STEPS

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Step 1Identify nature of AmalgamationIf the six conditions of amalgamation in nature of merger not satisfied then it is treated as amalgamation in nature of purchase. If the information provided in the question is not sufficient to decide the nature of amalgamation or question is silent on the nature of amalgamation then it is better to assume the nature of amalgamation as purchase.
Step 2Method of accounting  After identifying the nature of amalgamation the method of accounting is determined, it may be as follows:- Nature of Amalgamation Method of Accounting Merger Pooling of Interest Method Purchase Purchase Method


Step 3Purchase considerationPurchase consideration is amount payable by transferee company (purchasing accompany) to transferor company (selling company) at the event of amalgamation. The payment may be in the mode of shares, debentures and cash. The purchase consideration may be in lump sum payment or based on net assets of selling company.   LUMP SUM PAYMENT/PAYMENT ME…

AMALGAMATION :- JOURNAL ENTRIES IN THE BOOKS OF TRANSFEROR AND TRANSFEREE COMPANY

ACCOUNTING FOR AMALGAMATION PART-II
Amalgamation means the liquidation of one or more companies and transfer of business of liquidated entities to another entity. There may be amalgamation either transfer of two or more undertakings to an existing company or new company.
In the part -1 CLICK HERE FOR PART - I Accounting for amalgamation we learnt about nature of amalgamation and method of accounting, now we are going to learn journal entries in the event of amalgamation.
JOURNAL ENTRIES IN BOOKS OF TRANSFEROR COMPANY AND TRANSFEREE COMPANY
IN THE BOOKS OF TRANSFEROR COMPANY(SELLING COMPANY)
Accounting standard 14 is not applicable for selling company. Accounting is done with the objective of closing books of accounts and simultaneous determination of profit or loss on closing books of accounts.

ACCOUNTING FOR AMALGAMATION AS PER ACCOUNTING STANDARD 14

ACCOUNTING FOR AMALGAMATION Amalgamation means the liquidation of one or more companies and transfer of business of liquidated entities to another entity. There may be amalgamation either transfer of two or more undertakings to an existing company or new company. Scope Accounting Standard 14 “accounting for amalgamations” issued by ICAI, is applicable for Transferee Company (Buying Company). Let us understand some basic terms
Transferor Company: A company which is amalgamated into another company. The company selling its business is known as “Transferor Company”  
Transferee Company: A company into which a transferor company is amalgamated. The company buying other company is known as “Transferee Company”
Purchase Consideration: The consideration paid by the transferee company for the purpose of amalgamation. Purchase consideration may be in the form of Equity shares, preference shares, Debentures, Cash etc. There is no limit for fixing the price of Transferor Company it can be at disco…

JOURNAL ENTRY FOR MONTHLY PROVISIONS TO KNOW PROFIT OR LOSS

JOURNAL FOR MONTHLY PROVISIONS TO KNOW THE PROFIT OR LOSSHere we are going to learn about monthly provision entry,and to pass the journal entry we have to arrange following data. Closing stock value of Raw material, Work in progress and finished goods for the month end.Salary payable.Purchase of materialOther fixed expense payable.
Printing and stationeryInternet ChargesProvident fund(employer contribution)ESI ( employer contribution)Travelling chargesConveyanceStaff welfareAMC chargesPower ChargesSecurity ChargesTransport ChargesProfessional ChargesInterest and bank Charges

JOURNAL ENTRY FOR MONTHLY EXCISE DUTY OUTPUT/PAYABLE

JOURNAL ENTRY FOR ADJUSTMENT OF CENVAT CREDIT AGAINST EXCISE DUTY PAYABLE.
Excise duty is levied on manufacturing of goods the manufacturer or trader of goods have benefit of availing excise duty input which is known as CENVAT credit at the time of purchase of raw material and other capital goods. CENVAT credit is adjusted against excise duty output, Before writing entry for adjustment I want to explain two terms 1) Excise duty input 2) Excise duty output      A)Excise duty input
Journal entry for purchase including excise duty of Rs.14000            Purchase A/C  Dr                   86,000 Excise duty Input A/C Dr        14,000                          To Sundry Creditor A/C            1,00,000

JOURNAL ENTRY FOR BAD DEBTS AND PROVISION FOR BAD DEBTS

Journal entry for Bad debts & Provision for Bad debtsHello everyone, here we are going to learn how to pass journal entry for bad debts and provision for bad debts, let us understand the difference between bad debts and provision for bad debts.
BAD DEBTS: - A bad debt is debt that is not collectible and therefore treated as worthless. This usually occurs after all attempts are made to collect but failed. The debtor may going to bankrupt. This is treated as loss in books. PROVISION FOR BAD DEBTS: - On the basis of previous year bad debts the percentage of bad debts are considered as provision for bad debts and it is a balance sheet item shown as liability. The provision for bad debts is treated as expense in income statement.