The Balance Sheets of Bat Ltd. and Ball Ltd. as on 31.3.2000 are as follows:
|
|
Bat Ltd.
|
Ball Ltd.
|
|
Bat Ltd.
|
Ball Ltd.
|
|
|
Rs.
|
Rs.
|
|
Rs.
|
Rs.
|
|
Share Capital
(Shares of Rs. 10 each)
|
1,60,000
|
2,00,000
|
Investments
Shares in Ball Ltd.
|
1,96,000
|
-
|
|
Profit and Loss account
|
50,000
|
60,000
|
Debtors
|
-
|
1,20,000
|
|
Creditors
|
-
|
16,000
|
Stock
|
-
|
80,000
|
|
|
|
|
Cash at Bank
|
-
|
70,000
|
|
|
_______
|
_______
|
Cash in hand
|
14,000
|
6,000
|
|
|
2,10,000
|
2,76,000
|
|
2,10,000
|
2,76,000
|
Particulars of Bat Ltd.:
(1) This company was formed on 1.4.1999.
(2) It acquired the shares of Ball Ltd. as under:
|
Date of Acquisition
|
No. of Shares
|
Cost
|
|
|
|
Rs.
|
|
1.4.1999
|
8,000
|
1,10,000
|
|
31.7.1999
|
6,000
|
86,000
|
(3) The shares purchased on 31.7.1999 are ex-dividend and ex-bonus from existing holders.
(4) On 31.7.1999 dividend at 10% was received from Ball Ltd. and was credited to Profit and Loss Account.
(5) On 31.7.1999 it received bonus shares from Ball Ltd. in the ratio of one share on every four shares held.
(6) Bat Ltd. incurred an expenditure of Rs. 500 per month on behalf of Ball Ltd. and this was debited to the Profit and Loss Account of Bat Ltd., but nothing has been done in the books of Ball Ltd.
(7) The balance in the Profit and Loss Account as on 31.3.2000 included Rs. 36,000 being the net profit made during the year.
(8) Dividend proposed for 1999-2000 at 10% was not provided for as yet.
Particulars of Ball Ltd.:
(1) The balance in the Profit and Loss Account as on 31.3.2000 is after the issue of bonus shares made on 31.7.1999.
(2) The net profit made during the year is Rs. 24,000 including Rs. 6,000 received from insurance company in settlement of the claim towards loss of stock by fire on 30.06.1999 (Cost Rs. 10,800 included in opening stock).
(3) Dividend proposed for 1999-2000 at 10% was not provided for in the accounts.
Prepare the Consolidated Balance Sheet of Bat Ltd. as on 31.3.2000.
(16 marks)(November, 2000)
Answer
Consolidated Balance Sheet of Bat Ltd. and its subsidiary Ball Ltd.
as at 31st March, 2000
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
|
Rs.
|
|
Rs.
|
|
Share Capital
(Shares of Rs. 10 each)
Minority Interest
|
1,60,000
50,800
|
Stock
Debtors
Cash at Bank
|
80,000
1,20,000
70,000
|
|
Capital Reserve
|
3,040
|
Cash in hand
|
20,000
|
|
Profit and Loss Account
|
44,160
|
|
|
|
Creditors
|
16,000
|
|
|
|
Proposed Dividend
|
16,000
|
|
_______
|
|
|
2,90,000
|
|
2,90,000
|
Working Notes:
|
(1)
|
Analysis of profits of Ball Ltd.
|
|
Capital Profits
|
Revenue Profits
|
|
|
|
|
Rs.
|
Rs.
|
|
|
Profit and Loss Account on 1.4.1999
(60,000 – 24,000)
|
|
36,000
|
|
|
|
Profit for the year
|
24,000
|
|
|
|
|
Add back: Loss by fire
|
4,800
|
|
|
|
|
|
28,800
|
|
|
|
|
Less: Expenses not considered
|
6,000
|
|
|
|
|
|
22,800
|
|
|
|
|
Pre-acquisition profits =
|
7,600
|
|
|
|
|
Less: Loss in pre-acquisition period =
|
4,800
|
2,800
|
|
|
|
Post-acquisition profits
|
|
|
|
|
|
|
______
|
15,200
_____
|
|
|
|
|
|
38,800
|
15,200
|
|
|
Bat Ltd.’s share (80%*)
|
|
31,040
|
12,160
|
|
|
Minority’s share (20%)
|
|
7,760
|
3,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Minority interest
|
|
|
Rs.
|
|
|
Share capital
|
|
|
40,000
|
|
|
Capital profits
|
|
|
7,760
|
|
|
Revenue profits
|
|
|
3,040
|
|
|
|
|
|
50,800
|
|
(3)
|
Cost of control
|
|
|
Rs.
|
|
|
Face value of investments
|
|
1,60,000
|
|
|
|
Capital profits
|
|
31,040
|
1,91,040
|
|
|
|
|
|
|
|
|
Investment in Ball Ltd.
|
|
1,96,000
|
|
|
|
Less: Pre-acquisition dividend
|
|
8,000
|
(1,88,000)
|
|
|
Capital Reserve
|
|
|
3,040
|
|
(4)
|
Profit and Loss Account – Bat Ltd.
|
|
|
Rs.
|
|
|
Balance
|
|
|
50,000
|
|
|
Less: Pre-acquisition dividend wrongly credited
|
|
|
8,000
|
|
|
|
|
|
42,000
|
|
|
Less: Proposed dividend
|
|
|
16,000
|
|
|
|
|
|
26,000
|
|
|
Add: Expenses of Ball Ltd. written back
|
|
|
6,000
|
|
|
Add: Share in Ball Ltd.
|
|
|
12,160
|
|
|
|
|
|
44,160
|
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