debenture as consideration otherthan cash
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1. The document discusses the journal entries for issuing debentures as consideration for the purchase of assets or a business. 2. When debentures are issued at par value, the vendor account is debited and the debentures account is credited. 3. An example shows the journal entries for issuing debentures at par, 10% premium, and 10% discount as consideration for purchasing assets and liabilities from another company.
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IAS 37 provisions, contingent liabilities & assets
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The document discusses the objectives of financial statements. It notes that financial statements should provide a true and fair view of a company's financial position and performance. They should also provide information about a company's resources and earning potential to help stakeholders like investors, suppliers and lenders make informed decisions. Financial statements are a way for owners and managers to assess the effectiveness and efficiency of company management. The key financial statements are the income statement, balance sheet, statement of cash flows, and statement of changes in equity.
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The document discusses different scenarios for issuing and redeeming debentures. It provides journal entries for debentures being issued at par, premium or discount and redeemed at par or premium. Specifically, it gives examples of journal entries for the issue of 1000, 9% debentures of Rs. 100 each under six scenarios - issued at par and redeemable at par, issued at premium but redeemable at par, issued at discount but redeemable at par, issued at par but redeemable at premium, issued at discount but redeemable at premium, and issued at premium and redeemable at premium.
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Product mix refers to the total number of product lines and products offered by a company. It has four dimensions: width refers to number of product lines, length is total number of products, depth is variants within lines, and consistency is how linked products are. A product line is a subset of the mix and refers to a unique product category. There are various strategies for managing a product mix, including expanding or contracting lines, deepening lines, altering existing products, developing new uses, and differentiating products from competitors.
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Product hierarchy classifies products into essential components from basic needs to specific items. It progresses from (1) product need, such as the need for transportation, to (2) product family which satisfies that need through various modes like cars, trains, planes. (3) Product class further categorizes related goods within a company, while (4) product line refers to a whole range of items in a category. (5) Product types differentiate items within a line, and (6) product units are the last and most specific elements, like the Hyundai I20 Asta and Magna models.
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The document discusses different marketing orientations that companies can adopt. It describes production, product, sales, societal, and market orientations. Production orientation focuses on lowering costs, while product orientation focuses on product quality. Sales orientation prioritizes selling existing products. Societal orientation considers environmental and social impacts. Market orientation researches customer needs and designs products to meet those needs, taking a customer-first approach.
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Marketing research involves assessing customer needs and transmitting that information to design marketing activities. This includes understanding customer demographics and preferences. Product design and development plays an important role by making products attractive to sell more. Standardization and grading help ensure consistency in product size, quality and materials. Packaging protects products during transport and storage and allows for different quantities. Branding gives a product a distinct identity from competitors. Pricing considers factors like demand, costs and competitors. Customer support services help retain customers through after-sales support and complaint handling. Buying ensures necessary resources are obtained. Promotion grows awareness through advertising, selling, sales promotions and publicity. Physical distribution decisions cover transportation, inventory, warehousing and order processing to get products to
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This document provides an introduction to marketing. It defines key marketing terms like market, marketing, and marketing management. Marketing is defined as the process of planning and executing activities to create exchanges and satisfy customer needs. The goals of marketing are to attract new customers by offering value and keep current customers satisfied. The marketing process involves understanding customer needs, developing a customer-driven strategy, creating an integrated program, building relationships, and generating profits. Marketing is important for business survival, community benefit, efficient resource use, and economic development.
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debenture as consideration otherthan cash
- 1. ISSUE OF DEBENTURES FOR CONSIDERATION OTHER THAN CASH MRK
- 2. Sometimes a company purchases assets from vendors and instead of making payment in cash issues debentures for consideration thereof. Such issue of debentures is called debentures issued for consideration other than cash. Journal Entries On purchase of assets Sundry Assets A/c Dr. ToVendor’s Or On Purchase of Business Asset A/c Dr (Value of asset taken over) To Liabilities (Value of liabilities taken over) ToVendors A/c (Purchase consideration) If there is excess of purchase consideration over the net asset, the difference being capital loss is debited to “Goodwill A/c”. On the other hand if the net asset exceed the purchase consideration, the difference being capital profit is credited to “Capital Reserve A/c”
- 3. 2. On issue of debentures (a) At Par Vendors Dr. To Debentures A/c (b)At premium Vendors Dr. To Debentures A/c To Securities Premium A/c (c) At a discount Vendors Dr. Discount on Issue of Debenture A/c Dr. To Debentures A/c
- 4. EXAMPLE Arun Ltd took over asset worth of Rs. 250000 and liabilities of Rs. 67000 or Prakash Ltd for an agreed purchase consideration of Rs. 198000. It is agreed to pay the purchase consideration by issuing 10% Debentures of Rs.100 each. Show the journal entries if the debentures are issued at a) At Par Sundry Asset A/c Dr Goodwill A/c Dr To Liabilities To Prakash Ltd 250000 15000 67000 198000 Prakash Ltd A/c Dr. To 10% Debentures A/c 198000 198000 Purchase Consideration= 198000 Net Asset= Asset – Liabilities = 250000 – 67000= 183000 Goodwill = Purchase consideration – Net Asset = 198000 – 183000= 15000 a) At Par
- 5. EXAMPLE Arun Ltd took over asset worth of Rs. 250000 and liabilities of Rs. 67000 or Prakash Ltd for an agreed purchase consideration of Rs. 198000. It is agreed to pay the purchase consideration by issuing 10% Debentures of Rs.100 each. Show the journal entries if the debentures are issued at a) 10% Premium Sundry Asset A/c Dr Goodwill A/c Dr To Liabilities To Prakash Ltd 250000 15000 67000 198000 Prakash Ltd A/c Dr. To 10% Debentures A/c To Security Premium A/c (1800 debentures of Rs.100 issued at a premium of Rs.10) 198000 180000 18000 No. Of debentures to be issued = Amount Payable / Face value+ Premium = 198000 / 110 = 1800 Debentures
- 6. EXAMPLE Arun Ltd took over asset worth of Rs. 250000 and liabilities of Rs. 67000 or Prakash Ltd for an agreed purchase consideration of Rs. 198000. It is agreed to pay the purchase consideration by issuing 10% Debentures of Rs.100 each. Show the journal entries if the debentures are issued at a) 10% Discount Sundry Asset A/c Dr Goodwill A/c Dr To Liabilities To Prakash Ltd 250000 15000 67000 198000 Prakash Ltd A/c Dr. Discount on issue of Deb.A/c Dr. To 10% Debentures A/c (2200 Debentures of Rs.100 each issued at a discount of Rs.10) 198000 22000 220000 No. Of debentures to be issued = Amount Payable / Face value - Discount = 198000 / 90 = 2200 Debentures
- 7. THANK YOU