The Balance Sheets of H Ltd. and S Ltd. as on 31st March 2026 were as under: Particulars H Ltd. (₹) S Ltd. (₹) I. EQUITY AND LIABILITIES (1) Shareholder's Funds a) Authorised Share Capital : Issued and Subscribed Equity

CS Executive · Corporate Accounting and Financial Management · PYQS · June 2026
The Balance Sheets of H Ltd. and S Ltd. as on 31st March 2026 were as under: Particulars H Ltd. (₹) S Ltd. (₹) I. EQUITY AND LIABILITIES (1) Shareholder's Funds a) Authorised Share Capital : Issued and Subscribed Equity Shares capital of ₹ 100 each 5,00,000 2,00,000 b) Reserves and Surplus : General Reserve 1-4-2025 1,00,000 60,000 P. & L. A/c 1,40,000 90,000 (2) Non-Current Liabilities (3) Current Liabilities Bills Payables 40,000 Trade Payables (Creditors) 80,000 50,000 Total 8,20,000 4,40,000 II. ASSETS (1) Non-Current Assets a) Fixed Assets : (i) Tangible Assets 3,60,000 2,20,000 (ii) Intangible Assets : Goodwill 40,000 30,000 b) Non-Current Investments 1,500 Shares in S Ltd. 2,40,000 c) Other Non-Current Assets (2) Current Assets Stock 1,00,000 90,000 Bills Receivables (Debtors) 20,000 75,000 Cash and Cash Equivalent 60,000 25,000 Total 8,20,000 4,40,000 The Profit & Loss Account of S Ltd. showed a credit balance of ₹50,000 on 01.04.2025. A dividend of 15% was paid in January 2026 for the year 2024-2025. This dividend was credited by H. Ltd. to its Profit & Loss Account. The shares were acquired on 1st October 2025. The bills payable was all issued in favour of H Ltd. included in the creditors of S Ltd. ₹20,000 are related to goods sold by S Ltd. included in the stock of S Ltd. are goods of the value of ₹8,000 supplied by H Ltd. at a profit of 33⅓% on cost. You are required to calculate consolidated profit of the companies, Net Worth of S Ltd. as on 1st October 2025 and minority interest.

Answer & Explanation:

Answer 4(a) Working Note: 1. Profit earned during the year by S Ltd. Particulars Amount in ₹ Balance of Profit on 31-3-2026 90,000 Less: Opening balance of profit on 1-4-2025 50,000 40,000 Add: Dividend paid (15% on ₹2,00,000) 30,000 Profit earned during 2025-26 70,000 2. Calculation of Unrealized Profit Particulars Amount in ₹ Closing stock of S Ltd. out of goods purchased from H Ltd. 8,000 Profit included @33⅓% on cost i.e., 25% on sale value 2,000 Calculation of Consolidated Profit Particulars Amount in ₹ Balance of Profit of H Ltd. 1,40,000 Less: Dividend received from S Ltd. out of Pre-acquisition Profit 22,500 1,17,500 Less: Unrealized profit in closing stock of S Ltd. 2,000 1,15,500 Add: Share in post-acquisition profit of S Ltd. (₹70,000 * 6/12 * 75/100) 26,250 Consolidated Profit 1,41,750 Calculation of Net Worth of S Ltd. as on 1st October 2025 Particulars Amount in ₹ Paid up share capital 2,00,000 Add: General Reserve 60,000 Profit & Loss a/c (1-4-2025) (After dividend for 2024-25 i.e. ₹50,000 - ₹30,000) 20,000 Profit earned upto 1st October 2025 or Pre-acquisition profit: (₹70,000 * 6/12) 35,000 Net Worth 3,15,000 Calculation of Minority Interest Particulars Amount in ₹ 25% Share in Net worth 78,750 Add: 25% Share in Post-acquisition Profit (₹70,000 * 6/12 * 25/100) 8,750 Minority Interest 87,500

Topics: Corporate Accounting

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