Model: Bonus issue out of revenue profits (Post-acquisition profits) C Ltd. acquired 10,000 equity shares of Rs.10 each in D Ltd. on 31 March 2010. The summarized balance sheets of the two companies as on 31 March 2011 were as follows:
|
Particulars |
C Ltd. |
D Ltd. |
|
Liabilities: |
||
|
Equity Share Capital (Shares of Rs.10 Each) |
4,00,000 |
1,25,000 |
|
Reserves |
1,50,000 |
25,000 |
|
Profit and Loss Account |
50,000 |
50,000 |
|
Creditors |
1,00,000 |
25,000 |
|
7,00,000 |
2,25,000 |
|
|
Assets: |
||
|
Fixed Assets |
3,50,000 |
1,25,000 |
|
Current Assets |
2,00,000 |
1,00,000 |
|
10,000 Shares in D Ltd. at Cost |
1,50,000 |
— |
|
7,00,000 |
2,25,000 |
D Ltd. had a credit balance of Rs.25,000 in the reserves and Rs.10,000 in the P&L A/c when C Ltd. acquired shares in D Ltd. D Ltd. issued bonus shares in the ratio of 1 share for every 5 shares held out of the profits earned during 2010–11. This is not shown in the above balance sheet of D Ltd. Prepare a consolidated balance sheet of C Ltd. and its subsidiary on 31 March 2011 giving all the necessary workings.