1. Shareholders holding not less than 90% of the face value of the equity share capital in the vendor company become equity shareholders in the purchasing company
a) if the amalgamation is in the nature of merger as defined under AS 14
b) if the purchase consideration is calculated under payment method
c) if the amalgamation is in the nature of external reconstruction as defined under the Companies Act
d) if the amalgamation is in the nature of purchase as defined under AS 14
2. The assets and liabilities of the vendor company are incorporated in the accounts of the purchasing company at book values
a) if the amalgamation is in the nature of merger as defined under AS 14
b) if the amalgamation is in the nature of purchase as defined under AS 14
c) if the purchase consideration is calculated under Net Assets method
d) if the amalgamation is in the nature of external reconstruction as defined under the Companies Act
3. In the books of the purchasing company, the assets and liabilities of the vendor company are incorporated on the basis of their agreed values (i.e. either the book values or the fair values)
a) if the amalgamation is in the nature of merger as defined under AS 14
b) if the amalgamation is in the nature of purchase as defined under AS 14
c) if the purchase consideration is calculated under Net Assets method
d) if the amalgamation is in the nature of external reconstruction as defined under the Companies Act
4. The difference between the purchase consideration and the net assets of the vendor company, if any, is either debited to the Goodwill Account or credited to the Capital Reserve Account
a) if the amalgamation is in the nature of merger as defined under AS 14
b) if the amalgamation is in the nature of purchase as defined under AS 14
c) if the purchase consideration is calculated under Net Assets method
d) if the amalgamation is in the nature of external reconstruction as defined under the Companies Act
5. Under purchase method of amalgamation, the reserves of the vendor Company
a) are not brought in the books of the purchasing company
b) are brought in the books of the purchasing company
c) (except a statutory reserve) are not brought in the books of the purchasing company
d) (except a statutory reserve) are brought in the books of the purchasing company
6. Amalgamation Adjustment Reserve
a) should be shown as a Fixed Asset in the balance sheet of the purchasing company
b) should be shown as a Fictitious Asset in the balance sheet of the vendor company
c) should be shown under Reserves and Surplus in the balance sheet of the purchasing company
d) should be shown as a Fictitious Asset in the balance sheet of the purchasing company
7. The amounts paid by the purchasing company to discharge the debentures are
a) ignored while calculating purchase consideration by net payment method
b) ignored while calculating purchase consideration by net asset method
c) considered while calculating purchase consideration by net payment method
d) none of the above
8. The amounts paid by the purchasing company to discharge the contingent liabilities are
a) ignored while calculating purchase consideration by net payment method
b) ignored while calculating purchase consideration by net asset method
c) considered while calculating purchase consideration by net payment method
d) none of the above
9. The amounts paid by the purchasing company to meet the expenses of winding up are
a) ignored while calculating purchase consideration by net payment method
b) ignored while calculating purchase consideration by net asset method
c) considered while calculating purchase consideration by net payment method
d) none of the above
10. The agreed values at which the assets or liabilities are taken over by the purchasing company are
a) ignored while calculating purchase consideration by net payment method
b) ignored while calculating purchase consideration by net asset method
c) considered while calculating purchase consideration by net payment method
d) none of the above