Model: Bonus issue out of capital profit (Pre-acquisition profits R Ltd. acquired 3,200 ordinary shares of Rs.100 each in S Ltd. on 31 December 2010. Their summarized balance sheets as on that date were as follows:
|
Liabilities |
R Ltd. ‘ |
S Ltd. |
Assets |
R Ltd. |
S Ltd. |
|
Share Capital: |
Land & Buildings |
3,00,000 |
3,60,000 |
||
|
10,000 Ordinary Shares of |
10,00,000 |
— |
Plant & Machinery |
4,80,000 |
2,18,800 |
|
Z100 Each |
|||||
|
4,000 Shares of ? 100 |
— |
4,00,000 |
Investments in S Ltd. at |
6,80,000 |
— |
|
Each |
Cost |
||||
|
Capital Reserve |
— |
2,40,000 |
Stocks |
2,40,000 |
72,000 |
|
General Reserve |
4,80,000 |
— |
Debtors |
88,000 |
80,000 |
|
Profit & Loss A/c |
1,14,400 |
72,000 |
Bills Receivable (Including |
31,600 |
— |
|
Z 6,000 from S Ltd.) |
|||||
|
Bank Overdraft |
1,60,000 |
Cash at Bank |
29,000 |
16,000 |
|
|
Bills Payable (Including |
— |
16,800 |
|||
|
Rs.8,000 to R Ltd.) |
|||||
|
Creditors |
94,200 |
18,000 |
|||
|
18,48,600 |
7,46,800 |
18,48,600 |
7,46,800 |
You are supplied the following information:
- S Ltd. has made a bonus issue on 31 December 2010 of one ordinary share for every two shares held by its shareholders. Effect has yet to be given in the accounts for the issue.
- The directors are advised that land & buildings of S Ltd. are undervalued by Rs.40,000 and plant & machinery of S Ltd. are overvalued by Rs.20,000. These assets have to be adjusted accordingly.
- Sundry creditors of X Ltd. include Rs.24,000 due to S Ltd.
You are required to prepare the consolidated balance sheet as on 31 December 2010.