Draft balance sheet of Mentos Ltd. as on 31st March, 2019: Liabilities Amount Assets Amount Share Capital Land & Building 7,500 Equity shares (₹ 10 each) 10,000 Plant & Machinery 3,700 16% Preference shares (₹ 10

Computation of purchase consideration The conversion ratio for equity share holders is 40:50 and for preference shares is 5:6 (₹ in '000) Issued to From Zeus Ltd. Amount Equity shareholder of Mentos Ltd. (10,00,000 shares x 10 x 40/50) 8,00,000 equity shares of Zeus Ltd. of ₹ 10 each 8,000 Preference shareholder of Mentos Ltd. 36,000, 10% preference shares of Zeus Ltd. of ₹ 100 each 3,600 Total 11,600 Note: Consideration to debenture holders not included in computation of purchase consideration as per AS-14. The same will be taken over by Zeus Ltd. and then discharged. Alternate Answer 2A(ii) Calculation Amount to be paid by transferee company i.e. Zeus Ltd. (₹) No. of shares to be issued by transferee company i.e. Zeus Ltd. A. Payment to preference shareholder of Mentos Ltd: Preference share capital of Mentos Ltd. 30,00,000 Premium to be paid (20% of 30,00,000) 6,00,000 Total amount to be paid to preference shareholders 36,00,000 36,00,000 No. of 10% preference shares (₹ 100 each) to be issued 36,00,000/100 — 36,000 B. Payment to equity shareholders of Mentos Ltd: 1. No. of equity share of Mentos Ltd. 10,00,000 2. Intrinsic value of one share of Mentos Ltd. ₹ 40 3. Total intrinsic value of equity shares of Mentos Ltd. (10,00,000*40) 400,00,000 4. No. of equity shares to be issued on the basis of intrinsic value (400,00,000/50) of ₹ 10 each (as per terms shares are to be issued at par) — 8,00,000 Total amount to be paid to equity shareholders 80,00,000 Total 116,00,000 Note: Consideration to debenture holders not included in computation of purchase consideration as per AS-14. The same will be taken over by Zeus Ltd. and then discharged.