Question

Ram. Ltd. acquired the share on 1st
April 2021 in S Ltd. on which date
General Reserve and profit and loss
Account of Sam. Ltd. showed balances
of Rs. 40,000 and Rs. 8,000
respectively. Preliminary expenses are
Rs. 6,000. Find out Capital profits of
the subsidiary (.e. profits earned prior
to acquisition of shares)​

Answer 1

Answer:

sharing ratio=1/2

general Reserve + profit /loss

40000+8000

48000

sharing ratio=48000*1/2

=24000

each sharing profit =12000each

preminlary expense =6000/2

expense =3000each