Consolidation of Financial Statements Prof. Dr.

Nomita Agrawal

1. The balance sheets of H Ltd and S. Ltd. as on 31.3.2012 were as follows:

Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.
Share Capital of Rs. 4,00,000 1,00,000 Land & Bldgs. 2,00,000 50,000
20/- each
Profit and Loss a/c. 1,00,000 - Plant & Machinery 2,00,000 80,000
General Reserve 80,000 - Investment in 5000 1,00,000 -
shares of S Ltd
Securities Premium 40,000 - Stock 1,00,000 70,000
Secured Loan 1,00,000 80,000 Debtors 1,20,000 70,000
Unsecured Loan - 70,000 Cash & Bank 50,000 30,000
Creditors 50,000 50,000
Total 7,70,000 3,00,000 Total 7,70,000 3,00,000
Prepare consolidated balance sheet as on 31.3.2012

2. Following are the balance sheets of H Ltd and its 100% subsidiary S. Ltd. as on 31.3.2012. H Ltd has owned
S Ltd since S Ltd was incorporated.
Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.
Share Capital of 1,00,000 50,000 Plant & Machinery 40,000 20,000
Rs. 10/- each
General Reserve 38,000 15,000 Furniture 20,000 20,000
Creditors ( due Investment in 5000 50,000 -
within 1 year) shares of S Ltd at
Due to H Ltd - 4,000 cost
Due to Others 7,000 7,000
Stock 20,000 15,000
Debtors
S Ltd 4,000
Others 6,000 15,000
Cash & Bank 5,000 6,000

Total 1,45,000 76,000 Total 1,45,000 76,000

Prepare consolidated balance sheet as on 31.3.2012

3. The balance sheets of H Ltd and S. Ltd. as on 31.3.2012 were as follows. S Ltd is a 100% subsidiary since its
inception.
Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.
Share Capital of 5,00,000 2,00,000 Fixed Assets ( Net 5,00,000 2,50,000
Rs. 10/- each Block)
Reserves & 3,25,000 75,000 Investment
Surplus Shares of S Ltd 2,20,000 -
Others 30,000 25,000
Secured Loan 1,00,000 45,000 Current Assets, 6,00,000 2,00,000
Loans & Advances
Unsecured Loan 1,25,000 30,000
Current Liabilities 3,00,000 1,25,000
& Provisions
Total 13,50,000 4,75,000 Total 13,50,000 4,75,000
Prepare consolidated balance sheet as on 31.3.2012
 4. From the following information prepare consolidated balance sheet of H Ltd. ad its subsidiary S Ltd. as on
31.3.2012
Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.
Share Capital of 5,00,000 1,00,000 Sundry Assets 7,00,000 4,00,000
Rs. 50/- each
Profit and Loss 1,00,000 50,000 1200shares in S 90,000 -
a/c. Ltd. acquired on
31.3.2012
Sundry Liabilities 1,90,000 2,50,000
Total 7,90,000 4,00,000 Total 7,90,000 4,00,000

5. From the following details prepare the consolidated balance sheet as on 31.3.2012
Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.
Share Capital 5,00,000 2,00,000 Sundry Assets 10,00,000 5,00,000
of Rs. 100/-
each
Profit and Loss 3,00,000 2,00,000 1500 shares in 3,50,000 -
a/c. S Ltd. acquired
on 31.3.2012
General 1,00,000 -
Reserves
Sundry 4,50,000 1,00,000
Liabilities
Total 13,50,000 5,00,000 Total 13,50,000 5,00,000

6. The balance sheets of H Ltd and S. Ltd. as on 31.3.2014 were as follows:

Liabilities H Ltd. S Ltd. Assets H Ltd. S Ltd.
Share Capital of Rs. 4,00,000 1,00,000 Land & Bldgs. 2,00,000 50,000
10/- each

Profit and Loss a/c. 1,00,000 80,000 Plant & Machinery 2,00,000 80,000

General Reserve 80,000 70,000 Investment in 8000 1,00,000 -

shares
Securities Premium 40,000 - Closing Stock 1,00,000 70,000

Secured Loan 1,00,000 - Debtors 1,20,000 70,000

Creditors 50,000 50,000 Cash & Bank 50,000 30,000

Total 7,70,000 3,00,000 Total 7,70,000 3,00,000

Information:
i. H acquired the shares on 31.3.2014.
ii. Creditors of S Ltd. include Rs. 20,000 for goods supplied by H Ltd. on which H Ltd. made a profit of Rs.
2,000. Half of the goods were still in stock on 31.3.2014.
Prepare consolidated Balance sheet as on 1.4.2014.
7. With reference to the above mentioned problem disclose how would:

i. Equity Share Capital ii. Profit and Loss a/c.

iii. Minority Interest and iv. Investments

appear in the consolidated Balance Sheet of H Ltd. for the year ended 31.3.2015 if the profit earned during the
year by H Ltd. would be Rs. 35,000 and of S Ltd. for the same year would be Rs. 20,000 and if there is no change in
the share holding pattern of H Ltd. and S Ltd.

8. The following are the Balance Sheets of X Ltd. and Y Ltd. as on 31.3.2012
Liabilities X Ltd. Y Ltd. Assets X Ltd. Y Ltd.
Share Capital of Rs. 4,00,000 1,00,000 Fixed Assets 2,50,000 95,000
10/- each
Profit and Loss a/c. 50,000 20,000 Other Assets 8,10,000 5,05,000
Other Liabilities 7,50,000 4,80,000 9,000 Equity shares of 1,40,000 -
Y Ltd. acquired on
31.3.2012
Total 12,00,000 6,00,000 Total 12,00,000 6,00,000
Prepare consolidated Balance sheet as on 31.3.2012.
Equipment of Y Ltd. was revalued by X Ltd. at 20% above its book value on 1.4.2012. Prepare consolidated
Balance sheet as on 1.4.2012 after giving effect to revaluation in the books.

9. Immediately after acquisition of controlling shares by X Ltd., it received dividend from Y Ltd. @ 20% which
was recorded as income by X ltd. in its books. The assets and liabilities of two companies as on 1.4.2012
were as follows:
Liabilities X Ltd. Y Ltd. Assets X Ltd. Y Ltd.
Share Capital of Rs. 4,00,000 1,00,000 Fixed Assets 2,50,000 95,000
10/- each
Profit and Loss a/c. 50,000 20,000 Other Assets 8,10,000 5,05,000
Other Liabilities 7,50,000 4,80,000 9,000 Equity shares of 1,40,000 -
Y Ltd. acquired on
1.4.2012
Total 12,00,000 6,00,000 Total 12,00,000 6,00,000