22.26- PROBLEM 1.

The following are the balance sheets of H Ltd. and its subsidiary S Ltd. As at 31 st March, 2000:-

Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.

Rs. Rs. Rs. Rs.

2,00,00 3,00,00
Share Capital: 6,00,000 0 Machinery 0 1,00,000
Shares of Rs. 10 each, Furniture 70,000 45,000
70% shares in S 2,60,00
fully paid Ltd., 0
General Reserve 1,50,000 70,000 at cost
1,75,00
Profit and Loss account 70,000 50,000 Stock 0 1,89,000
Creditors 90,000 60,000 Debtors 55,000 30,000
Cash at bank 50,000 10,000
Preliminary
Expenses - 6,000
9,10,00 9,10,00
0 3,80,000 0 3,80,000
th
H Ltd. acquired the shares of S Ltd. On 30 June, 1999. On 1st April, 1999 S Ltd.’s General
Reserve and Profit and Loss Account stood at Rs. 60,000 and Rs. 20,000 respectively. No part of
Preliminary Expenses was written off during the year ended 31st March, 2000.

Prepare the consolidated balance sheet of H Ltd. and its subsidiary S Ltd. as at 31 st March, 2000.

4- PROBLEM 2. The following are the Balance Sheet of R Ltd. and S Ltd. as at 31st march, 1989:

Liabilities R Ltd. S Ltd. Assets R Ltd. S Ltd.

Rs. Rs. Rs. Rs.
Share Capital:
Equity Shares of Rs. 10 each Fixed Assets 5,00,000 2,40,000
1,50,00
fully paid shares 4,00,000 0 Investment in 15,000 equity
14% Preference, Shares shares in S Ltd. on
1,00,00
of Rs.100each, fully paid up - 0 April 1,1988 2,00,000 -
General Reserve 50,000 40,000 Current Assets (including
Profit and Loss Account Rs. 10,000 stock-in-trade
(before appropriation for dividends) 30,000 25,000 purchased from R Ltd.) 3,00,000 2,60,000
14% Debentures 2,00,000 -
 1,85,00
Current Liabilities and Provision 3,20,000 0
5,00,00
10,00,000 0 10,00,000 5,00,000

Prepare the Consolidated Balance Sheet as at 31st March, 1989, assuming that (a) S Ltd.’s
General Reserve and Profit and Loss Account (after appropriation for dividends) stood at Rs.
25,000 and Rs. 10,000 respectively on April 1, 1988, and (b) R Ltd. sells good at a profit of 25%
on cost.

5-PROBLEM 3. The following are the Balance Sheet of M Ltd. and N Ltd. as on 31st, 1989:

Liabilities M Ltd. N Ltd.

Rs. Rs.
Equity Shares of Rs. 10 each, fully paid 3,00,000 2,00,000
Capital Redemption Reserve 1,20,000 -
Capital reserve 1,00,000 30,000
Profit and Loss Account (before any appropriation) 60,000 40,000
Debentures 2,00,000 1,00,000
Outstanding Interest on Debentures for one year 30,000 15,000
Other Liabilities 1,90,000 1,15,000
10,00,00 10,00,00
Total 0 0

Assets M Ltd. N Ltd.

Rs. Rs.
Fixed Assets 6,00,000 3,40,000
Investments in : 15,0000 Equity Shares in N Ltd. on
30.9.1988 2,00,000 -
Debenture of N Ltd. at par 50,000 -
Debenture of M Ltd. at par - 60,000
Current Assets 1,50,000 1,00,000
10,00,00 10,00,00
Total 0 0

Prepare the Consolidated Balance Sheet as at 31st March, 1989 assuming that N Ltd. has earned
uniformly in 1988-89 and its Profit and Loss Account showed a debit balance of Rs.20, 0000 on
April 1, 1988.
3- PROBLEM.4 The summarized balance sheets of P Ltd. and S Ltd. on 31st March,1989 were as
follows:

P Ltd. S Ltd. P Ltd. S Ltd.

Rs. Rs. Rs. Rs.
1,50,00 2,44,70
Share Capital: Fixed Assets 0 0
3,000 shares of Rs. 100 3,00,00 1,70,00
each 0 - Investment in S Ltd.;at cost 0 -
10,000 shares of Rs. 10 1,00,00
each - 0 Stock 40,000 20,000
Capital Reserve - 55,000 Loan at P Ltd. - 2,000
1,05,00 Bills Receivable (including Rs.
General Reserve 30,000 0 200 from S Ltd.) 1,200 -
Profit and Loss Account 38,200 18,000 Debtors 20,000 15,000
Loan from S Ltd. 2,100 - Cash 7,000 5,000
Bills Payable (including
Rs.500 to P Ltd.) - 1,700
Creditors 17,900 7,000
3,88,20 2,86,70 3,88,20 2,86,70
0 0 0 0

There is a contingent liability of Rs.1, 000 for bills discounted appearing in the balance sheet of
P Ltd.

P Ltd. acquired 8,000 shares of Rs. 10 each in S Ltd., on 31st March, 1989.

You are given the following additional information:

(i) S Ltd. made a bonus issue on 31st March, 1989of one share for every two share held,
reducing General Reserve by an equivalent amount, but the transaction is not shown
in the balance sheets.
(ii) Interest receivable amounting to Rs. 100 in respect of loan due by P Ltd. has not
been credited in the accounts of S Ltd.
(iii) The directors decided that the fixed assets of S Ltd. were overvalued and should be
written down by Rs.5000.
 Prepare a Consolidated Balance Sheet of the two Companies as on 31 st March,
1989, giving all the workings.

11-PROBLEM 5. The following balance sheets are presented to you:

Balance Sheet 31st March, 1989

H Ltd. S Ltd. H Ltd. S Ltd.
Rs. Rs. Rs. Rs.
Share Capital: Fixed Assets 3,50,000 1,50,000
Shares of Rs. 100 each 5,00,000 2,00,000 Stock-in-trade 90,000 40,000
General Reserve 1,00,000 Debtors 60,000 30,000
14% Debentures in S Ltd.
Profit and Loss Account 80,000 acquired at par 60,000
14% Debentures 1,00,000 Shares in S ltd. 1,50@Rs.80 1,20,000
Trade Creditors 75,000 45,000 Cash at bank 75,000 25,000
Profit and Loss account 1,00,000
7,55,000 3,45,000 7,55,000 3,45,000

H Ltd. acquired the shares on 1st August 1988. The Profit and Loss Account of S Ltd. showed a
debit balance of Rs. 1, 50,000 on 1st April, 1988. During June 1988, goods costing Rs. 6,000 were
destroyed against which the insurer paid only Rs. 2,000.Trade creditors of S Ltd. include Rs.
20,000 for goods supplied by H Ltd. on which H Ltd. made a profit of Rs. 2,00. Half of the goods
were still in stock on 31st March, 1989.

Prepare the consolidated Balance Sheet.

12-PROBLEM 6: The Balance Sheets of Harry Ltd. and its subsidiary Suman Ltd. as at 31 st March,
1989 are as follows:

Balance Sheet of Harry Ltd. as on 31st March, 1989

Liabilities Assets
Share Capital 1,00,000 Goodwill 20,000
General Reserve 34,000 Land & Building 76,000
Profit & Loss Account 11,100 Investment 28,000
Bills Payable 41,000 Stock 52,000
Sundry Creditors 63,900 Sundry Debtors & Advances(including
loan to Suman Ltd.: Rs.1,000) 58,000
Cash at Bank 15,200
2,50,00
2,50,000 0

*The investment consists of 2,400 shares of Rs. 10 each fully paid in its subsidiary Suman Ltd.
which were acquired on 1st July, 1988.

Balance Sheet of Suman Ltd. as on 31st March, 1989

Liabilities Assets
Share Capital(d) 30,000 Goodwill 4,400
General Reserve(e) 5,000 Plant & Machinery (a) 29,000
Profit & Loss Account(e) 4,400 Bills Receivable 6,000
Loan 21,000 Stock 12,500
Sundry Creditors 28,400 Sundry Debtors 30,000
Cash at Bank 6,900
88,000 88,000

(a) On 1st April, 1988 the plant and machinery were revalued at Rs. 32,000 which should be
taken in the consolidated balance sheet. Ignore depreciation. There were no additions or
deletions to plant during the year.
(b) Total bills receivable were Rs. 41,000 (all accepted by Harry Ltd.) of which bills for Rs.
11,000 had been discounted with the banker and were yet to mature.
(c) Cash at Bank Balances were arrived at after sending a cheque for Rs. 1,000 to Harry Ltd.
on account of repayment of loan.
(d) Share Capital of Suman Ltd. consists of 3,000 equity shares of Rs. 10 each.
(e) Balances as on 1st April, 1988:
Profit & Loss account Rs. 1,200
General Reserve Rs. 4,000

Prepare a consolidated balance sheet as on 31st March, 1989. Workings will be part of your
answer.
20- PROBLEM 7: As on 31st March, 1989, the Balance Sheets of three companies showed the
following positions:

Fig. Ltd. Run. Ltd. Trot. Ltd.

Rs. Rs. Rs. Rs. Rs. Rs.
Fixed Assets:
Freehold Land and Buildings,
10,00,00
at cost 4,00,000 0 6,50,000
13,00,00 8,70,00
Plant & Machinery, cost 0 5,60,000 0
6,00,00
Less: aggregate depreciation 5,00,000 8,00,000 2,20,000 3,40,000 0 2,70,000
12,00,00 13,40,00
0 0 9,20,000
Investments:
11,50,00
Shares in Run Ltd. at cost 0
18,50,00
Shares in Trot Ltd., at cost 7,00,000 0
Current assets:
5,41,40
Stocks on hand 5,70,000 6,80,000 0
4,21,90
Debtors 9,63,400 4,32,450 0
19,75,90 11,04,25 22,16,70 1,14,09 10,77,39
Balance at Bank 4,42,500 0 0 0 0 0
50,25,90 35,56,70
0 0
Deduct:- Current Liabilities
3,42,87
Creditors 3,23,960 6,17,100 0
2,44,00
Income Tax 7,24,500 5,20,000 0
12,00,00 22,48,46 19,37,10 1,00,00
Proposed Dividends 0 0 8,00,000 0 0 6,86,870
27,77,44 16,19,60 13,10,52
0 0 0
Financed by:
Share Capital, authorized and
issued : Equity shares of Rs.
10/-
20,00,00 10,00,00
fully paid 0 8,00,000 0
Capital Reserve 2,00,000 4,00,000 -
Revenue Reserve 5,77,440 4,19,600 3,10,520
27,77,44 16,19,60 13,10,52
0 0 0

You are also given the following information:

(1) Fig. Ltd. acquired 50,000 shares in Run Ltd. in 1983-84 when the Balance on capital
reserve had been Rs.2,00,222 and on revenue reserve Rs. 1,60,000, A further 20,000
shares were purchased in 1985-86 when the balance on capital reserve and revenue
reserve had been Rs. 4,00,000 and Rs. 2,40,000 respectively.
(2) Fig. Ltd. had purchased 75,000 shares in Trot Ltd. in 1985-85 when there had been an
adverse balance on revenue reserve of Rs. 60,000.
(3) During the year ended 31st March, 1989, Fig Ltd. had purchased a machine from Run Ltd.
for Rs. 1,00,0000 which had yielded a profit on selling price of 30% of that company.
Depreciation on the machine had been charged in the accounts at 20% on cost.
(4) Run Ltd. purchases goods from Fig. Ltd. providing Fig Ltd. with a standard gross profit on
invoice price of 33 1.3%. On 31st March, 1989 the stock valuation of Run Ltd. included an
amount of Rs. 1, 60,000 being goods purchased from Fig Ltd. for Rs. 1, 80,000.
(5) The proposed dividends from subsidiary companies have been included in the figure for
debtors in the accounts of the parent company.

You are required to prepare the Consolidated Balance sheet of Fig Ltd. and its subsidiaries as on
31st March, 1989, together with your consolidation schedules.