A Ltd. acquired the whole of the shares in B Ltd. on 1 July 2010 at a total cost of 2,80,000. The balance sheets of both the companies as at 31 December 2010 were as follows:
|
Liabilities |
A Ltd. |
B Ltd. |
Assets |
A Ltd. |
B Ltd. |
|
Shares of Z 50 Each |
3,75,000 |
1,25,000 |
Land & Buildings |
2,57,500 |
75,000 |
|
General Reserve on |
2,37,500 |
5,000 |
Plant & Machinery |
75,000 |
67,750 |
|
1 January 2010 |
|||||
|
Profit & Loss A/c |
2,00,000 |
90,000 |
Debtors |
70,000 |
39,500 |
|
Creditors |
37,500 |
40,250 |
Stock |
85,000 |
50,500 |
|
Investments |
2,80,000 |
– |
|||
|
Cash at Bank |
82,500 |
27,500 |
|||
|
8,50,000 |
2,60,250 |
8,50,000 |
2,60,250 |
- The balance of profit & loss A/c of B Ltd. on 1 January 2010 was Rs.70,000. Included in the purchases from B Ltd. were goods for Rs.15,000 on which B Ltd. made a profit of Rs.3,750.
- Stock of A Ltd. included Rs.7,500 purchased from B Ltd. (part of Rs.15,000)
- Profit & Loss A/c of A Ltd. included interim dividend at the rate of 16% p.a. from B Ltd Make necessary adjustments and show a consolidated balance sheet as at 31 December 2010.