Model: Contingent liabilities and unrealized profit in stock The balance sheet of H Ltd. and S Ltd. on 31 March 2010 was as follows:
|
Liabilities |
H Ltd. |
S Ltd. |
Assets |
H Ltd. |
S Ltd. |
|
Equity Share of Z 10 Each |
20,00,000 |
12,00,000 |
Land & Buildings |
10,00,000 |
8,00,000 |
|
General Reserve on 1 April |
3,60,000 |
2,04,000 |
Plant & Machinery |
5,00,000 |
6,40,000 |
|
2009 |
|||||
|
Profit & Loss A/c |
2,40,000 |
96,000 |
Stock |
2,80,000 |
3,20,000 |
|
Balance on 1 April 2009 |
Debtors |
4,80,000 |
4,20,000 |
||
|
Profit for 2009-10 |
4,40,000 |
3,36,000 |
80,000 Shares in S Ltd. |
11,80,000 |
— |
|
Bills Payable |
— |
80,000 |
Bills Receivable |
1,20,000 |
— |
|
Creditors |
5,60,000 |
2,84,000 |
Cash |
40,000 |
20,000 |
|
36,00,000 |
22,00,000 |
36,00,000 |
22,00,000 |
H Ltd. acquires shares in S Ltd. on 1 January 2010. S Ltd. issued all bills payable to H Ltd. Bills receivable of H Ltd. include bills of S Ltd. for Rs.48,000. Sundry debtors of S Ltd. include Rs.40,000 owing by H Ltd. Stock of H Ltd. includes goods worth Rs.60,000 purchased from S Ltd. for which the latter company has charged profit at 25% on cost. Contingent liability for bills discounted by H Ltd. is Rs.1,00,000. Prepare a consolidated balance sheet.