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Advanced Accounting Code 444 Assignment 2 spring 2017

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Advanced Accounting Code 444 Assignment 2 spring 2017 for B A and B.com class. All the students who get admission in B.Com and take special subject code 444 of B A can find here advance accounting code 444 assignment 2 spring 2017. The first solved assignment for this code has already been upload. The advance accounting code 444 assignment 2 spring 2017 is the continuity of this series. This assignment is also solved and prepared by the accounting experts.

Advanced Accounting Code 444 Assignment 2 spring 2017

Q.1      Describe and differentiate the absorption, amalgamation and merger of companies.

Answer:

Solution:

Amalgamation:-The term amalgamation is used both in a wide as well as in a narrow sense. In the wide sense, it is co-extensive with every sort combination of two or more companies but this is not the sense in which this term is used accountancy. We used the term usually in its narrow sense. In the narrow sense amalgamation refers to the information of a new company to purchase existing company necessitating the winding up of the letter. Sometimes two or more companies carrying on business of a similar nature combine or amalgamate together for the sake of economy in working. A new company is formed to acquire and carry on the business of old companies. The old companies all go into liquidation and the new company takes over the assets and liability of old companies at an agreed value.

Advanced Accounting Code 444 Assignment 2 spring 2017 Absorption Account

Absorption:-When the existing company take over the business of other existing company. It is known as absorption. The company bought over goes into liquidation. The observed company will have no further separate existence henceforward. Absorption does not involve the information of a new company but it does require the winding up of an existing company whose business is being purchased.

Merger:

Mergers can be defined to mean unification of two players into a single entity. It is not defined under any. Under section 2(1B) of the income tax act, 1961 amalgamation is defined as mixing up or uniting together. It is a process where one companies (both being existing companies and carrying on business). Provided that following conditions are met with:

  1. All properties are transferred to the amalgamated company.
  2. All liabilities are transferred to the amalgamated company.
  3. Shareholders holding at least 3/4th in the value of shares of the amalgamating company become shareholders of the amalgamated company.

Definition of amalgamation is generally taken as definition of merger in legal parlance.

Acquisitions are situations where one player buys out the other to combine the bought entity with itself. It may be in form of a purchase, where one business buys another or a management buyout, where the management buys the business from its owners

 

 

 

 

Difference between Amalgamation and Merger:

 

Merger is restricted to a case where the assets and liabilities of the companies get vested in another company, the company which is merged losing its identity and its shareholders becoming shareholders of the other company. On the other hand, amalgamation is an arrangement, whereby the assets and liabilities of two or more companies become vested in another company (which may or may not be one of the original companies) and which would have as its shareholders substantially, all the shareholders of the amalgamating companies.

 

Difference between Absorption and Amalgamation:-

 

We have already seen that Absorption means taking over the business of a company (which goes into liquidation) by another company. In brief one company is swallowed up or absorbed by another one. In absorption there is only one winding up.

Amalgamation differs from absorption in that the companies amalgamating (two or more) no longer exist. They are all wound up and a new company is formed to take over the wound up undertakings.

Advanced Accounting Code 444 Assignment 2 spring 2017 Solved

Q#2 Explain the hire purchase system and give a set of specimen entries that usually appear in the books of the hire-purchase and the vendor when the goods are sold on hire purchase system and the vendor when the goods are sold on hire purchase system.

Answer:

Hire purchase system

Hire purchase is a credit purchase. The price under hire purchase system is paid in installments. The goods are delivered in the possession of the purchaser at the time of commencement of the agreement. Hire vendor continues to be the owner of the good still the payment of last installment.

The books of the hire purchase:  the following journal entries are passed in the boos of the buyer

When the asset is acquired on installment payment system.

Asset Account             D. [full cash price]

Interest suspense account       Dr. [total interest]

Vendor Account [installment]

The book of the seller/vendor:

The following journal entries are passed in the books of the seller:

When goods are sold and delivered under the installment payment system.

Purchaser account Dr.[full cash price = total interest

Sales Account [cash price]

Interest suspense account [total interest]

Advanced Accounting Code 444 Assignment 2 spring 2017 Ratios

Q#3 from the following ratios and further information given below……………..

 

Trading and profit and loss account for the year ended

Particular Amount Particular Amount
Opening 20000 Sale 800000
Purchase (bal fig) 680000 Closing stock 100000
Gross profit c/d 200000
900000 900000
Expense (bal fig ) 400000 Gross profit b/d 200000
Net profit 160000
200000 2000000

Find also:- AIOU SOLVED ASSIGNMENT 1 CODE 444 SPRING 2017

Balance sheet as on 31-dec

assets amount Liabilities Amount
Current assets 140000 1000000 Total liabilities 1600000
Capital 800000
1500000 Net profit 16000 960000
60000
2560000 2560000

سوال نمبر 4 سے 5 کے ليے يہاں کلک کريں

2 Comments

  1. Pingback: Advanced Accounting Code 444 Solved Assignment 2 spring 2017 - AIOU Assignments

  2. sir please upload all b.com spring 2017 assignments
    thanks

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