The summarised Balance Sheets of A Ltd. and B Ltd. as on 31.3.2018 are as under :On the above date, A Ltd. decided to absorb B Ltd. under the following conditions :

(1) A Ltd. will take over all the assets and liabilities of B Ltd., subject to the following adjustments in order to ensure uniform accounting policies

(a) A Ltd. does not make any provision for doubtful debts. To bring B Ltd.’s value of sundry debtors in line with those of A Ltd., provision for doubtful debts of B Ltd. has to be eliminated.

(b) Advertisement suspense of B Ltd. is being written off over 3 years. Similar amount of advertising suspense has already been fully written off by A Ltd. in 2016.

(2) The entire purchase consideration will be satisfied by the issue of equity shares of ₹10 each of A Ltd. A Ltd. will issue 12,000 equity shares at par to B Ltd.

You are required to :

(i) Close the books of B Ltd.;

(ii) Pass journal entries in the books of A Ltd.; and

(iii) Prepare the Balance Sheet of A Ltd. after absorbtion.

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I. EQUITY AND LIABILITIES (1) Shareholders' Funds: (a) Share Capital (b) Reserves and Surplus (c) Money Received against Share Warrants Balance Sheets of A Ltd. and B Ltd. as at 31st March, 2018 A Ltd. (3) (3) (2) Share Application Money Pending Allotment: (3) Non-current Liabilities: (4) Current Liabilities: TOTAL II. ASSETS (1) Non-current Assets: (a) Fixed Assets Particulars (a) Short-term Borrowings (b) Trade Payables ----Sundry Creditors (c) Other Current Liabilities (d) Short-term Provisions (2) Current Assets: (1) Tangible Assets ---Plant and Machinery TOTAL Notes to Accounts: (a) Current Investments (b) Inventories (c) Trade Receivables ---Sundry Debtors (d) Cash and Cash Equivalents (e) Other Current Assets Note No. (2) (4) 1,50,000 50,000 20,000 2,20,000 1,20,000 20,000 50,000 30,000 … 2,20,000 B Ltd. (3) (4) 1,00,000 60,000 - - 10,000 1,70,000 1,00,000 25,000 25,000 20,000 1,70,000