H Ltd acquired 80,000 shares of ₹10 each in S Ltd. on 1st January 1989. The summarised Balance Sheets of H Ltd. and S Ltd. on 30th June, 1989 were:
Liabilities (H Ltd. - ₹25,70,000, S Ltd. - ₹16,05,000):
Share capital of ₹10 each
H Ltd. - ₹20,00,000
S Ltd. - ₹10,00,000
Reserves
H Ltd. - ₹1,00,000
S Ltd. - ₹1,50,000
Profit & Loss A/c
H Ltd. - ₹50,000
S Ltd. - ₹45,000
9% Debentures
H Ltd. - NIL
S Ltd. - ₹2,00,000
Creditors
H Ltd. - ₹4,00,000
S Ltd. - ₹2,00,000
Bills payable
H Ltd. - ₹20,000
S Ltd. - ₹10,000
Assets (H Ltd. - ₹25,70,000, S Ltd. - ₹16,05,000)
Machinery
H Ltd. - ₹6,00,000
S Ltd. - ₹4,50,000
Furniture
H Ltd. - ₹20,000
S Ltd. - ₹40,000
Shares in S Ltd.
H Ltd. - ₹8,80,000
S Ltd. - NIL
9% debentures in S Ltd.
H Ltd. - ₹80,000
S Ltd. - NIL
Stock
H Ltd. - ₹5,20,000
S Ltd. - ₹6,50,000
Debtors
H Ltd. - ₹1,80,000
S Ltd. - ₹2,70,000
Bills receivable
H Ltd. - ₹10,000
S Ltd. - ₹15,000
Cash
H Ltd. - ₹2,80,000
S Ltd. - ₹1,80,000
Bills receivable of S Ltd. include bills for ₹8,000 accepted by H Ltd. and creditors of S Ltd. include ₹20,000 due to H Ltd. An amount of ₹30,000 was transferred by S Ltd. from the current year's profits of ₹60,000 to reserves.
You are required to prepare the consolidated Balance Sheets as on 30th June 1989 showing therein how your figures are made up.
Answers
Answer:
Explanation:
Calculation of purchases consideration
Assets
Machinery - 4,50,000
Furniture - 40,000
Investments - Nil
Inventory - 6,50,000
Trade Receivables - 2,70,000
Bills Receivable - 15,000
Cash - 1,80,000
Total 16,05,000
Liablities
9% debentures - 2,00,000
Trade payables - 2,00,000
Bills payable - 10,000
Total - 4,10,000
Value of company
Assets - liabilities
= 11,95,000
Consideration paid = 8,80,000
20% Non-controlling interest = 2,39,000 (11,95,000 x 20%)
(-) value of the company 11,95,000
Bar gain on purchase = 76,000
Consolidated Financial statements as on 30th june 1989
Assets
Machinery 10,50,000
Furnitues 60,000
Investmnets - 80,000
Inventory - 11,70,000
Trade receivables - 4,30,000 (4,50,000 - 20,000)
Bills receivable - 17,000 (25,000 - 8,000)
Cash - 4,60,000
Total 32,67,000
Equity and Libalities
Share capital - 20,00,000
Reserves = 1,00,000 + 76,000
NCI - 2,39,000
P&L - 50,000
9% debentures - 2,00,000
Trade payables - 5,80,000 (6,00,000 - 20,000)
Bills payable - 22,000 (30,000 - 8,000)
Total = 32,67,000