The Balance Sheets of C Ltd. and D Ltd. as at 31st December, 2016 are as follows
|
Liabilities |
C Ltd. Rs. |
D Ltd. Rs. |
Assets |
C Ltd. Rs. |
D Ltd. Rs. |
|
Share capital (in shares of
Rs. 10 each) |
2,00,000 |
1,00,000 |
Sundry assets |
1,32,500 |
1,38,200 |
|
General reserve |
18,000 |
20,000 |
Goodwill |
NIL |
20,000 |
|
Profit & Loss A/c |
24,500 |
23,000 |
Share in D ltd.at cost |
1,40,000 |
NIL |
|
Creditors |
30,000 |
15,200 |
|
|
|
|
|
2,72,500 |
1,58,200 |
|
2,72,500 |
1,58,200 |
In the case of 'D' Ltd., profit for the year ended 31st December 2016 is Rs. 12,000 and transfer to reserve is Rs. 5,000.The holding of C Ltd. in D Ltd. is 90% acquired on 30th June 2016, Draft a consolidated Balance Sheet of 'C' Ltd . and its subsidiary.
Solution:
Notes
to Accounts:
|
1.Share Capital: |
Rs. |
Rs. |
|
20,000 Shares of Rs. 10 each |
|
2,00,000 |
|
2.Reserves and surplus: |
|
|
|
General
reserve |
|
18,000 |
|
Surplus
instalment of P&L: |
|
|
|
Balance
as per C Ltd. Balance sheet : |
24,500 |
|
|
Add: Share of revenue profit: |
5,400 |
29,900 |
|
|
|
47,900 |
|
3. Trade payables: |
|
|
|
Sundry creditors |
|
|
|
C Ltd. |
30,000 |
|
|
D Ltd. |
15,200 |
45,200 |
|
4.Tangible assets: |
|
|
|
Sundry assets: |
|
|
|
C Ltd. |
1,32,500 |
|
|
D Ltd. |
1,38,200 |
2,70,700 |
|
5.Intangible assets |
|
|
|
Goodwill |
|
36,700 |
Consolidated
Balance sheet of C Ltd and its subsidiary D Ltd. as on 31.12.2016 (As per
Schedule VI)
|
I. Equity and Liabilities: |
Note No. |
Rs. |
|
(i) Shareholders' funds: |
|
|
|
Share capital |
1 |
2,00,000 |
|
Reserves and surplus |
2 |
47,900 |
|
(ii) Minority interest (W.N 4) |
|
14,300 |
|
(iii) Current liabilities |
|
|
|
Trade payables |
3 |
45,200 |
|
Total (i) + (ii) + (iii) |
|
3,07,400 |
|
II. Assets: |
|
|
|
(i) Non-current assets: |
|
|
|
Tangible assets |
4 |
2,07,700 |
|
Intangible assets |
5 |
36,700 |
|
(ii ) Current assets: |
|
|
|
Total (i) + (ii) |
|
3,07,400 |
|
Working Notes |
||||||
|
1. Holding-minority ratio |
||||||
|
C
Ltd. acquired 90% of shares in D Ltd. |
||||||
|
Minority holding in D Ltd =10% |
||||||
|
Ratio-90:10 or 9:1 |
||||||
|
2. Revenue profits |
Rs. |
|||||
|
Profit for the current year, given |
12,000 |
|||||
|
Profit made after June 30th or revenue profit =
12,000 x 6/12 = |
6,000 |
|||||
|
Holding company's share = 6,000
x 9/10 = |
5,400 |
|||||
|
Minority's share
= 6,000 x1/10
= |
600 |
|||||
|
3.Capital profits |
Rs. |
|||||
|
General reserve of D Ltd. |
20000 |
|||||
|
General reserve of D Ltd. |
23000 |
|||||
|
|
43000 |
|||||
|
Less Revenue profit |
6000 |
|||||
|
Capital profit |
37000 |
|||||
|
Holding company's share = 37,000 x 9/10 = 33,300 |
||||||
|
Minority's share = 37,000 x 1/10 = 3,700 |
||||||
|
Note: Since it is clearly stated that the profit
of D Ltd. for the year 2016 is Rs. 12,000, |
||||||
|
it is
assumed that the transfer to reserve of Rs. 5,000 is a part of the Rs. 12,000 |
||||||
|
4. Minority Interest |
Rs. |
|||||
|
Face value of minority shares= 1,00,000 x
10/100 = |
10,000 |
|||||
|
Add: Minority share of capital profit |
3,700 |
|||||
|
Add: Minority share of revenue profit |
600 |
|||||
|
Minority interest |
14,300 |
|||||
|
5.Cost of control or goodwil |
Rs. |
|||||
|
Amount paid by C.Ltd. for shares purchased in D
Ltd. |
1,40,000 |
|||||
|
Less: Face
value of shares purchased 1,00,000 x 90/100 90,000 |
|
|||||
|
Less: Holding company's share of capital
profits 33,300 |
1,23,300 |
|||||
|
Goodwill |
16,700 |
|||||
|
Add:
Goodwill in D Ltd.'s Balance Sheet |
20,000 |
|||||
|
Goodwill to be shown in consolidated Balance
Sheet |
36,700 |
|||||
