Blue Ltd. and Moon Ltd. have agreed to amalgamate to form a new company Blue Moon Ltd. After negotiation, the two companies have decided on the balance sheets as given below: EQUITY AND LIABILITIES Blue Ltd. (in '000) Mo

To compute the total number of shares of Blue Moon Ltd. to be issued to the shareholders of Blue Ltd. and Moon Ltd. using the Net Asset Value (NAV) method, we first need to calculate the net assets taken over from each company. Net Asset Value (NAV) Method: Net Assets = Total Assets - External Liabilities 1. For Blue Ltd.: Total Assets = ₹6,00,000 ('000) External Liabilities (Trade Payables) = ₹40,000 ('000) Net Assets Taken Over = ₹6,00,000 - ₹40,000 = ₹5,60,000 ('000) 2. For Moon Ltd.: Total Assets = ₹11,00,000 ('000) External Liabilities (Trade Payables) = ₹60,000 ('000) Net Assets Taken Over = ₹11,00,000 - ₹60,000 = ₹10,40,000 ('000) 3. Shares to be issued by Blue Moon Ltd.: The new company, Blue Moon Ltd., will issue shares of ₹10 each. Shares to be issued to shareholders of Blue Ltd.: Net Assets of Blue Ltd. / Face Value per share ₹5,60,000 ('000) / ₹10 = 56,000 ('000) shares = 560 lakh shares Shares to be issued to shareholders of Moon Ltd.: Net Assets of Moon Ltd. / Face Value per share ₹10,40,000 ('000) / ₹10 = 104,000 ('000) shares = 1040 lakh shares 4. Total number of shares to be issued by Blue Moon Ltd.: 560 lakh shares (for Blue Ltd.) + 1040 lakh shares (for Moon Ltd.) = 1600 lakh shares Summary: Number of shares to be issued to the shareholders of Blue Ltd. = 560 lakh shares Number of shares to be issued to the shareholders of Moon Ltd. = 1040 lakh shares Total number of shares to be issued by Blue Moon Ltd. = 1600 lakh shares