26.08.

2021
Ex: 22
Pg: 14.80

Workings:

1. Holding Minority Ratio

H Ltd: 100%
S Ltd : 0%

2. Revenue Profit -Nil

3. Capital Profit
Reserves 25000
Less: Preliminary exp 3000
22,000
4. Minority Interest - Nil
5. Capital reserve / Goodwill
Amount paid by holding company 117000
Less: Face value of shares 100000
Share of capital profit 22000 122000
Capital reserve -5,000
Notes to Account

1. Share capital

Share capital of H ltd 250,000

2. Reserves and Surplus

Reserves of H Ltd 50,000

Capital reserve 5,000 55,000

3. Trade Payables

H ltd 40,000

S ltd 30,000 70,000

4. Tangible Assets

H Ltd 223000

S Ltd 152000 375000

CONSOLIDATED BALANCE SHEET OF H LTD AND IT SUBSIDARY S LTD AS ON 31.3.1999

Particulars Nots no Amount

I Equities and Liabilities

Shareholders Fund

Share capital 1 250,000

Reserves and surplus 2 55,000

Minority interest -

Current Liabilities

Trade Payables 3 70,000

375000

II Assets

Non current assets

Tangible assets 4 375000

Intangible assets - -

375000
1. Ex.No: 24 – 14.81

Solution
Y Ltd., - 3/4-
Minority Interest - 1/4
Subsidiary Company (Z Ltd.,)
Calculation of Goodwill/ Capital Reserve

Particulars Amoun Amount

t
Share capital – 10,000*3/4 7,500
General Reserves – 3,000*3/4 2,250
P & L A/c – 2,000*3/4 1,500
11,250
Less : Payment 10,000
Capital Reserve 1,250

Calculation of Minority Interest

Particulars Amoun Amount
t
Share capital – 10,000*1/4 2,500
General Reserves – 3,000*1/4 750
P & L A/c – 2,000*1/4 500
Minority Interest 3,750
V. Capital Profit or Revenue Profit
Before acquiring – Capital profit
After acquiring – Revenue profit
Notes to Account

1. Share capital

Share capital of y ltd 20000

2. Reserves and Surplus

Reserves of Y Ltd 5000

P & L y ltd 3000

Minority interest 3750

Capital reserve 1250 13000

3 Long term borrowings

10% debentures of Y ltd 10000

Z ltd 5000 15000

4 Trade Payables

Y ltd 5000

Z ltd 2000 7000

5. Tangible Assets

Y ltd 20000

Z ltd 10000 30000

6 Other current assets

Current assets - x ltd 13000

Z ltd 12000 25000

2. Ex.No.19 – 14.79
Solution
H Ltd., -900/1,000 – 9/10
Minority Interest – 100(1,000-900)/1,000 – 1 /10
Subsidiary Company (S Ltd.,)

Calculation of Capital Profit

Capital Profit - Rs.200 - 9/10 – Rs.180

- 1/10 - Rs.20
Calculation of Revenue Profit
Revenue Profit – (Rs.300(P&L) – Rs.200(Cr.Bal) – Rs.100
9/10 – Rs.90 – Shown in Balance sheet under reserves and surplus
1/10 -Rs.10

Calculation of Goodwill/ Capital Reserve

Particulars Amoun Amount

t
Share capital – 900
 1,000*9/10
Capital profit 180
1,080
Less : Payment 1,200
Goodwill 120
Calculation of Minority Interest
Particulars Amoun Amount
t
Share capital – 1,000 * 100
1/10
Capital profit 20
Revenue profit 10
Minority Interest 130

Notes to Account

1. Share capital

Share capital of H ltd 1400

2. Reserves and Surplus

Reserves of H Ltd -- --

Share of revenue profit 90 90

Minority interest 130

3. Trade Payables

H ltd --

S ltd 500 500

4. Tangible Assets

H Ltd 200

S Ltd 1800 2000

5 Intangible assets

Goodwill 120
3.

ans: B/S – Rs.3,350

Solution
H Ltd., -128/160 – 8/10 – 4/ 5
Minority Interest – 32(160-128)/160 – 1/5
Subsidiary Company (S Ltd.,)

Calculation of Capital Loss

Capital Loss - Rs.100(given in adjustment) - 4/5 – Rs.80

- 1/5 - Rs.20
Calculation of Revenue Profit
Revenue Profit – Rs.100(loss)+Rs.50(C.Y. profit)- Rs.150
4/5 – Rs.120 – Shown in Balance sheet under reserves and surplus
1/5 -Rs.30
Calculation of Goodwill/ Capital Reserve

Particulars Amount Amount

Share capital – 1280
1,600*4/5
Less: Capital Loss 80
1,200
Less : Payment 1,000
Capital Reserve 200

Calculation of Minority Interest

Particulars Amount Amount
Share capital – 320
1,600*1/5
Less: Capital Loss 20
300
Revenue profit 30
Minority Interest 330

4. Ill 14 – 14.61
Solution
H Ltd., - 3,000 shares/4,000 shares – ¾
Minority Interest – 1,000(4,000-3,000)/4,000 shares – ¼

Calculation of increase or decrease in value of assets.

Land and building

Particulars Amount Amount
Land and building
Cost price(WDV) 1,60,000
Revaluation value 1,50,000
Decrease in value 10,000
There is no depreciation for land and building. Depreciation not provided for that.
Machinery
Particulars Amount Amount
Written down value given at 90%(less 10% depreciation ) – Rs.1,35,000
Then 100% = ? 1,50,000
Book value = 1,35,000/90*100
Less: Depreciation Jan-June 6 months 7,500
1,50,000*10/100*6/12
1,42,500
Less: Revaluation value 1,92,500
Increase in value 50,000

Calculation of Capital Profit – Jan- June 6 months

Particulars Amoun Amount
t
General reserve 50,000
Profit and loss a/c on 1.4.90 30,000
Profit for 1990 (current year) 40,000
S Ltd., 80,000*6/12
 1,20,000
Add: Increase in value of machinery 50,000
1,70,000
Less: Decrease in value of land & Building 10,000
1,60,000
Less: Preference Dividend 1,00,000*10/100 – 10,000*6/12 5,000
1,55,000

¾- 1,55,000 *3/4 – 1,16,250

¼ - 1,55,000*1/4 – 38,750

Calculation of Revenue Profit

Particulars Amoun Amount
t
Profit for 1990 (current year) 40,000
S Ltd., 80,000*6/12

Less: Depreciation on machinery 50,000*10/100*6/12 2,500

37,500
Less: Preference Dividend 1,00,000*10/100 – 10,000*6/12 5,000
32,500
¾- 32,500 *3/4 – 24,375
¼ - 32,500*1/4 –8,125

Calculation of Goodwill/ Capital Reserve

Particulars Amoun Amount

t
Share capital – 3,00,000
4,00,000*3/4
Capital Profit 1,16,250
4,16,250
Less: Payment 4,50,000
Goodwill 33,750

Calculation of Minority Interest

Particulars Amoun Amount
t
Share capital – 1,00,000
4,00,000*1/4
Capital Profit 38,750
Revenue profit 8,125
Preference share capital 1,00,000
Preference Dividend 10,000
Minority Interest 2,56,875
Ex: 18
Pg: 14.78

Workings

1. Holding ratio: H ltd: 9/10

S ltd : 1/10

2. Revenue profit

Date of acquisition - not given

Date of balance sheet - not given
But difference in p & L a/c balance ie 320 and 220
We have to calculate revenue profit and capital profit
P& L A/c

To balance(Closing) 320 By balance b/d 220

By profit earned during the 100
year(BF)

320 320

So revenue profit is rs. 100

H ltd : 9/10 = Rs. 90
S ltd : 1/10 = Rs. 10

3. Capital Profit
General reserve -
P & l on balance sheet - 220
220
H Ltd share = 220 X 9/10 = 198
S ltd = 220 X 1/10 = 22

4. Minority interest

Face value of shares 100

Add: share of capital profit 22
Share of revenue profit 10 32
132
 5. Capital reserve / Goodwill

Amount paid by holding company 1125

Less : Face value of share 900
Share of capital profit 198 1098
27
Goodwill

Notes to Accounts

1. Share capital

Share capital of H ltd 1400

2. Reserves and Surplus

Reserves of H Ltd -

P&L 260

Share of revenue profit 90

Minority interest 132 482

3. Trade Payables

H ltd 350

S ltd 190 540

4. Tangible Assets

H Ltd 885

S Ltd 1510 2395

5 Intangible assets

Goodwill 27
P: 10
Pg: 14.87

1. Holding minority ratio

Sun – 100%
Moon 0 %
2. Revenue Profit
Date of acquisition – 1.1.96
Balance sheet date – 31.12. 1996

P& L A/c

To balance(Closing) 80000 By balance b/d 35000

By profit earned during the 45000
year(BF)

80000 80000

Therefore revenue profit is 45,000

3. Capital profit

General reserve 100000

P & L as on 1.1.96 35000
135000

4. Minority interest - NIL

5. Capital reserve or goodwill

Amount paid to holding shares 360000

Less: Face value of shares 200000
Share of capital profit 135000 335000

Goodwill 25000
Notes to Accounts

1. Share capital

Share capital of Sun Ltd 300000

2. Reserves and Surplus

Reserves of Sun Ltd 150000

P & L of sun ltd 100000

Share of revenue profit 45000 295000

3. Trade Payables

Sun ltd 30000

Moon ltd 20000 50000

4. Tangible Assets

Sun ltd 220000

Moon ltd 400000 620000

5 Intangible assets

Goodwill 25000

Problem21
Pg: 14.94

Workings:
1. Holding Minority Ratio
M acquired all shares
M ltd : 100%
C ltd : 0%
2. Revenue Profit
Date of acquisition : 30.06.1998
Balance sheet date : 31.12.1998
P & L Account

To amount transferred to 500 By balance b/d -

reserve (1000 – 500)

To balance c/d 1000 By profit earning during 1500

the year(BF)

1500 1500

So revenue profit = Rs. 1500 X 6/12

= Rs. 750
3. Capital profit
General reserve 500
Pre acquisition profit 750
1250
Holding company share in revenue profit(100%) = Rs.1250

4. Minority interest _- NIL

5. Capital reserve or goodwill:

Amount paid for holding company share 6500

Less: Face value of share 5000

Share of capital profit 1250 6250

GOODWILL 250
Notes to Accounts

1. Share capital

Share capital of M ltd 12,000

2. Reserves and Surplus

Reserves of M Ltd 5000

P & L of M ltd 2000

Share of revenue profit 750 7750

3. Trade Payables

M ltd 7500

C ltd 1000 8500

4. Tangible Assets

M ltd 20000

C ltd 8000 28000

5 Intangible assets

Goodwill 250

Problem:22
Pg: 14.95

Workings:
1. Holding minority ratio
Sun ltd: 18000 shares
Moon ltd: 20000 – 18000 = 2000
18,000 : 2000
9 : 1
2. Revenue Profit
Date of acquisition : 1.10.1986
Balance sheet date : 31.12.1986

P & L Account

To balance c/d 20000 By balance b/d 6,000

By profit earning during 14000

the year(BF)

20000 20000

So, revenue profit -= Rs. 14,000 X 3/12 = 3500

Ratio: 9:1
Holding company share = 3500 X 9/10 = 3150
Minority company share = 3500 X 1/10 = 350

3. Capital Profit
General reserve = 40,000
P& L Balance 6000
46,000
Pre acquisition profit
(14,000 X 9/12) 10500
56,500
Holding company share = 56500 X 9/10 = 50850
Minority company share = 56,500 X 1/10 = 5650

4. Minority interest

Face value of shares (2000 X 10) 20000

Add: Share of revenue profit 350
Share of capital profit 5650
26000
5. capital reserve or Goodwill

Amount paid for holding company share 250000

Less: Face value of share(18,000 X 10) 180000

Share of capital profit 50850 230850

GOODWILL 19150
Notes to Accounts

1. Share capital

Share capital of Sun Ltd 250000

2. Reserves and Surplus

Reserves of Sun Ltd 50000

P & L of sun ltd 30000

Share of revenue profit 3150 83150

3. Trade Payables

Sun ltd 20000

Moon ltd 10000 30000

4. Tangible Assets

Sun ltd 100000

Moon ltd 270000 370000

5 Intangible assets

Goodwill 19150