Balance Sheet of S Ltd. is given below Particulars Amount (₹) Liabilities Share Capital of 10/- each fully paid 6,00,000 General Reserve 1,50,000 Profit and Loss Account 1,05,000 Creditors 1,80,000 10,35,000 Assets Fixed

CS Executive · Corporate Accounting and Financial Management · PYQS · December 2024
Balance Sheet of S Ltd. is given below Particulars Amount (₹) Liabilities Share Capital of 10/- each fully paid 6,00,000 General Reserve 1,50,000 Profit and Loss Account 1,05,000 Creditors 1,80,000 10,35,000 Assets Fixed Assets 3,00,000 Current Assets 7,35,000 10,35,000 Other information: Holding company H Ltd. has bought 48,000 shares in its subsidiary S Ltd. Consideration for purchase of shares in S Ltd. ₹9,00,000/- General Reserve of S Ltd. on date of acquisition ₹1,20,000/- Profit and Loss Account on date of acquisition ₹24,000/- Calculate: Minority Interest and Goodwill. How will goodwill be treated in consolidated books of accounts ?

Answer & Explanation:

H Ltd. ₹ Minority Interest Share Capital 1,20,000 Capital Profit (Pre acquisition Capital Reserve + Pre acquisition P&L A/c) x Minority shareholding 28,800 Revenue Profit (General Reserve for the year + P&L A/c addition for the year) x minority shareholding 22,200 1,71,000 Goodwill Consideration ₹9,00,000 Less: Face value of shares acquired 4,80,000 Less: General Reserve (₹1,20,000 x 4/5) 96,000 Less: P&L Account (₹24,000 x 4/5) 19,200 Goodwill 3,04,800 Goodwill will be shown on the Asset side of Consolidated Balance Sheet of H Ltd.

Topics: Corporate Accounting

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