ACCOUNTINGDOSE

Step 1 Identify nature of Amalgamation If 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 2 Method 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 3 Purchase consideration Purchase 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 su

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 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 Co

JOURNAL FOR MONTHLY PROVISIONS TO KNOW THE PROFIT OR LOSS Here 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 material Other fixed expense payable. Printing and stationery Internet Charges Provident fund(employer contribution) ESI ( employer contribution) Travelling charges Conveyance Staff welfare AMC charges Power Charges Security Charges Transport Charges Professional Charges Interest and bank Charges

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