Model: Proposed dividend, received bonus shares, revaluation of assets, unrealized profit in stock and consolidation after some years of investment One 1 January 2008, A Ltd. acquired 16,000 shares of Rs.10 each of B Ltd. at Rs.1,80,000. The respective balance sheets as on 31 December 2010 are given as follows:
|
Liabilities |
A Ltd. |
B Ltd. |
Assets |
A Ltd. |
B Ltd. |
|
Share Capital (Rs. 10) |
2,00,000 |
2,00,000 |
Fixed Assets |
1,20,000 |
2,20,000 |
|
Reserve |
80,000 |
52,000 |
Investments |
2,00,000 |
30,000 |
|
Profit & Loss A/c |
72,000 |
70,000 |
Debtors |
50,000 |
40,000 |
|
Creditors |
1,42,000 |
96,000 |
Stock |
60,000 |
80,000 |
|
Bank |
64,000 |
48,000 |
|||
|
4,94,000 |
4,18,000 |
4,94,000 |
4,18,000 |
Additional information:
- At the time of acquiring shares, B Ltd. had Rs.48,000 in reserve and Rs.30,000 in profit & loss account.
- B Ltd. paid 10% dividends in 2008, 12% in 2009, 15% in 2010 for 2007, 2008 & 2009, respectively. All dividends received have been credited to P&L A/c of A Ltd.
- Proposed dividends of both the companies for 2010 is 10%.
- One bonus share for five fully paid shares held has been declared by B Ltd. Out of pre-acquisition reserves on 31 December 2010, no effect has been given to that in the above accounts.
- On 1 January 2008, Building of B Ltd. which stood in the books as Rs.1,00,000 was revalued as Rs.1,20,000. But no adjustment has been made in the books. Depreciation has been charged @ 10% p.a. or reducing balance method.
- In 2010, A Ltd. purchased from B Ltd. goods for Rs.20,000 on which B Ltd. made a profit of 20% on sales. 25% of such goods are lying unsold on 31 December 2010. You are required to prepare the consolidated balance sheet as 31 December 2010.