The summarised Balance Sheets of H Ltd. and S Ltd. as on 31st March, 2025 is given below : Equities and Liabilities H Ltd. S Ltd. Share capital (Face value of ₹ 10 per share) 30,00,000 6,00,000 Reserves 4,80,000 1,80,000

CS Executive · Corporate Accounting and Financial Management · PYQS · June 2025
The summarised Balance Sheets of H Ltd. and S Ltd. as on 31st March, 2025 is given below : Equities and Liabilities H Ltd. S Ltd. Share capital (Face value of ₹ 10 per share) 30,00,000 6,00,000 Reserves 4,80,000 1,80,000 Profit and Loss Account 3,60,000 2,40,000 38,40,000 10,20,000 Assets Sundry Assets 30,00,000 10,20,000 48,000 shares in S Ltd. 8,40,000 38,40,000 10,20,000 S Ltd. had reserves of ₹ 1,80,000 when H Ltd. acquired shares in S Ltd. The P & L balance of S Ltd. was fully earned after the acquisition of shares by H Ltd. S Ltd. decided to issue bonus shares out of post-acquisition profit in the ratio of 1 share for every 10 shares held. Calculate the cost of control before and after issue of bonus shares.

Answer & Explanation:

Cost of control before and after issue of bonus shares of S Ltd. Calculation of cost of control before issue of bonus shares ₹ Amount of consideration 8,40,000 Less: Face Value of Shares acquired 4,80,000 3,60,000 Less: Shares amount in reserves (180,000 * 80%) 1,44,000 Cost of control/Goodwill before issue of bonus shares 2,16,000 Calculation of cost of control after issue of bonus shares ₹ Amount of consideration 8,40,000 Less: Face Value of Shares acquired 4,80,000 3,60,000 Less: Shares amount in reserves (180,000*80%) 1,44,000 2,16,000 Less: H Ltd's share in bonus [600000*80%*1/10] 48,000 Cost of Control/Goodwill 1,68,000

Topics: Corporate Accounting

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