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WAEC SSCE - Financial Accounting - 2000 (Objective)

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XYZ Enterprises bought ABC Enterprises by issuing 30,000 ordinary shares of N1 each at a discount of 5%. The assets of ABC Enterprises are stock N18,000. Debtors N11,000. The purchase consideration was
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To calculate the purchase consideration, we need to find the total value of the shares issued. Number of shares issued = 30,000 Nominal value of each share = N1 Total nominal value of shares issued = 30,000 x N1 = N30,000 Discount given on shares = 5% of N30,000 = N1,500 Net proceeds from the issue of shares = N30,000 - N1,500 = N28,500 Therefore, the purchase consideration is N28,500.
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