Model: Pre-acquisition profit and reserves From the balance sheets given below, prepare a consolidated balance sheet of H Ltd. and its subsidiary S Ltd.
|
Liabilities |
H Ltd. |
S Ltd. |
Assets |
H Ltd. |
S Ltd. |
|
Share Capital: |
Fixed Assets: |
||||
|
Shares of ? 20 Each |
3,60,000 |
90,000 |
Freehold Property |
2,16,000 |
— |
|
Reserves & Surplus: |
Leasehold Property |
— |
75,000 |
||
|
General Reserve |
75,000 |
18,000 |
Plant & Machinery |
90,000 |
30,000 |
|
Profit & Loss A/c |
36,000 |
27,000 |
Investments: |
||
|
Current Liabilities: |
7,000 Shares in S Ltd. |
75,000 |
— |
||
|
Creditors |
45,000 |
15,000 |
Current Assets: |
||
|
Stock at Cost |
54,000 |
9,000 |
|||
|
Debtors |
66,000 |
21,000 |
|||
|
Bank |
15,000 |
15,000 |
|||
|
5,16,000 |
1,50,000 |
5,16,000 |
1,50,000 |
At the date of acquisition by H Ltd., of 3,000 shares in S Ltd. the latter company had undistributed profits and reserves of Rs.15,000, none of which have been distributed since acquisition.