A Edwards & Co. sold their business on 1 July 2006 to a company, Arthur Edwards...

 

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A Edwards & Co. sold their business on 1 July 2006 to a company, Arthur Edwards (Pty) Ltd., for the sum of R220 000, to be paid for by 125 000 R1 ordinary shares and R95 000 in cash. Their assets consisted of: Freehold land and buildings, valued at Machinery and plant, etc., valued at Book debts, certified by the auditors at Stocks and materials in progress, valued at Advertising plates, etc. and their liabilities were: Trade creditors I nans on mortgage R 28 000 25 000 45 000 140 000 25 000 40 000 45.000 The capital of the company was R250 000, consisting of 125 000 ordinary shares of R1 each, and 125 000 6% preference shares of R1 each, issued at R1,05 per share. Required Make the journal entries for the above transactions in the company's books, and then set out the balance sheet. A Edwards & Co. sold their business on 1 July 2006 to a company, Arthur Edwards (Pty) Ltd., for the sum of R220 000, to be paid for by 125 000 R1 ordinary shares and R95 000 in cash. Their assets consisted of: Freehold land and buildings, valued at Machinery and plant, etc., valued at Book debts, certified by the auditors at Stocks and materials in progress, valued at Advertising plates, etc. and their liabilities were: Trade creditors I nans on mortgage R 28 000 25 000 45 000 140 000 25 000 40 000 45.000 The capital of the company was R250 000, consisting of 125 000 ordinary shares of R1 each, and 125 000 6% preference shares of R1 each, issued at R1,05 per share. Required Make the journal entries for the above transactions in the company's books, and then set out the balance sheet.

Answer rating: 100% (QA)

Journal Entry 1 To record the purchase of A Edwards Co business Debit A Edwards Co Business Purchase ... View the full answer