1. The summarised balance sheet of H ltd and S ltd as on 31.12.

12 are given below:

Liabilities H ltd S ltd Assets H ltd S ltd
Share capital of Rs 10 5,00,000 1,00,000 Sundry assets 5,00,000 1,70,000
P & L a/c 60,000 40,000
6,40,000 1,70,000 6,40,000 1,70,000
2,72,500 1,58,200 2,72,500 1,58,000

S ltd had the reserve of Rs.30,000 when H ltd acquired the shares in S ltd but the profit and
loss account balance of S ltd was fully earned after the purchase of shares.
S ltd decided to issue bonus shares out of the post acquisition profit in the ratio of 2 for every
5 shares held.

Calculate cost of control before and after the issue of bonus shares.

2. (Treatment of inter-company Owings, unrealised profit in stock and contingent liability)

Liabilities and assets of H ltd and its subsidiary S ltd on 31.3.2013 was as under:
Liabilities H ltd S ltd Assets H ltd S ltd
Equity shares of Land and
Rs.10 each fully paid 20,00,000 5,00,000 buildings 6,00,000 -
General reserve on Plant and
1.4.2012 3,00,000 1,00,000 machinery 20,00,000
-
Surplus a/c Furniture and
Balance on 1.4.12 4,00,000 2,00,000 fixtures 90,000 1,00,000
Profit for the year 30,000 shares
ended 31.3.12 5,00,000 2,50,000 in S ltd at cost 6,50,000 -
Bills payable 1,50,000 - Stock 4,00,000 7,50,000
Creditors 3,00,000 3,00,000 Debtors 1,00,000 2,80,000
Bank overdraft 2,00,000 - Cash in hand 10,000 20,000
Bills receivable - 2,00,000
38,50,000 13,50,000 38,50,000 13,50,000
30,000 shares in S ltd were acquired by H ltd on 1.10.2012. Bills receivable held by S td Include
bills of H ltd for Rs.1, 20,000. Included in debtors of S ltd is a sum of Rs.60, 000 owing by H ltd
in respect of goods supplied by S ltd. Stock of H ltd includes goods worth Rs.30, 000 purchased
from S ltd for which the later company has charged profit at 25% on cost. Contingent liability
for bills discounted by S ltd Rs.25, 000.

You are required to prepare a consolidated balance sheet of H ltd and its subsidiary ltd
as at 31.3.12. Give all your working notes clearly.

3. (Revaluation of assets and preference share in Subsidiary ltd)

Balance sheet of H ltd and S ltd as on 313.13 was as follows:

Liabilities H ltd S ltd Assets H ltd S ltd
 10% preference - Buildings 3,10,000 1,60,000
shares of Rs.100 1,00,000
each
Equity shares of Machinery
Rs.100 each 10,00,000 4,00,000 Less: 10% 2,70,000 1,35,000
depn.
General reserve 1,00,000 50,000 3,000 shares in
S ltd 4.50,000 -
P & L A/c Stock at cost 2,20,000 1,50,000
(1/4/12) 40,000 30,000
Profit for the year Debtors 1,55,000 90,000
12-13 2,00,000 80,000
Creditors 1,50,000 70,000 Cash 85,000 1,95,000
14,90,000 7,30,000 14,90,000 7,30,000

H ltd acquired 3,000 shares in S ltd on 1/10/12. As on the date of acquisition H ltd found that
the value buildings and machinery of S ltd should be Rs.1, 50,000 and Rs.1, 92,500 respectively.

Prepare consolidated balance sheet of H ltd and its subsidiary S ltd as on 31/3/13 taking into
consideration the fact that asset to be taken at their proper values.