ACCOUNTINGDOSE

AMALGAMATION INTER COMPANY HOLDINGS Intercompany holdings are divided into three types Purchasing company holding shares in selling company Selling company holding shares in purchasing company Purchasing company and selling company hold shares in each other Selling company holding shares in purchasing company Let us assume the assets of selling company (excluding inter company investment)=Rs.1600000/- Share capital of selling company = 100000 Fair value of purchasing company shares= Rs.10/- Issue price of purchasing company shares= Rs.20/- Share exchange ratio= 1 share for each share of selling company Computation of purchase consideration Payments method: Step:1 Calculate number of shares to be issued by purchasing company to selling company Exchange ratio= 1:1 Existing total shares of selling company = 100000 so total number of shares issued by purchasing company will be 100000shares Step:2 Deduct number of shares already held b...

  Letter of credit :-  It   is a document from a  bank warranting that a seller will receive  payment if the delivery conditions related to sale have been met. In the event that the buyer is unable to make payment on the purchase, the bank will cover the outstanding amount. LC is drawn in most international transactions where the parties in this transaction are unknown to secure the payment from the buyer the seller will ask for letter of credit. Parties in L C :- Buyer, Buyer Bank, seller, seller bank and carrier Stages:- The seller and buyer after conclusion of contract the buyer bank will supply letter of contract to seller Seller will consign goods to carrier in exchange of bill of lading Seller will provide bill of lading to seller bank against the payment from buyer bank , after this seller bank will provides the bill of lading to buyer bank and from buyer bank it will delivered to buyer ...

  Cash flow statement is additional information to user of financial statements. A cash flow statement displays the flow of incoming and outgoing cash in entity. It is one of the tools for assessing the liquidity and solvency of the enterprise. Before going to brief discussion on cash flow statement, let us know about profit and loss account if you give a trial balance to ten different people and ask them to arrive profits then you will get ten different answers because of different assumptions, but in case of cash flow the ten answers will be same as we considering with only cash items unless non-cash items as in profit and loss account. Profit is an accounting concept. Profit is derived on accrual assumption. Profit and cash flow from operating activities are not the same. Cash flow statement is an important tool for making several management decisions such as declaration of dividend and investments. Cash and Cash equivalent Cash means cash n hand and balance ...