CASE STUDY
HOLDING COMPANY
- (Revaluation of assets). From the following Balance Sheets of H ltd., and its subsidiary S ltd., drawn up to 31st March, 2002, prepare a Consolidated Balance Sheet as at that date having regard to the following:
- Reserve and p &l (cr.) of s ltd., stood as rs. 25000 and rs. 15000 respectively on the date of acquisition of its 80% shares by h ltd., and
- Machinery (book value rs. 1,00,0000 ) and furniture (Book value
. 20,000) of S Ltd. Were revalued at 
. 1,50,000 and 
. 15,000 respectively for the purpose of fixing the price of its shares; book valuesof other assets remaining unadjusted.
BALANCE SHEETS OF H LTD. & S LTD.
as on 31st March, 2002
Liabilities |
H Ltd |
S Ltd |
Assets |
H Ltd |
S Ltd |
Share Capital (Shares of 100 each) |
5,00,000 |
1,00,000 |
Machinery |
3,00,000 |
90,000 |
Reserve |
2,00,000 |
75,000 |
Furniture |
50,000 |
17,000 |
Profit & loss A/c |
1,00,000 |
25,000 |
Other Assets |
4,40,000 |
1,43,000 |
Creditors |
1,50,000 |
50,000 |
Shares of S Ltd. 800 at .200 each |
1,60,000 |
|
9,50,000 |
2,50,000 |
9,50,000 |
2,50,000 |
CONSOLIDATED BALANCE SHEET OF H LTD. AND ITS SUBSIDIARY, S LTD
as on 31st March, 2002
Liabilities |
Rs. |
Rs. |
Assets |
Rs. |
Rs. |
Share Capital: |
Goodwill |
12,000 |
|||
Minority Interest |
Machinery |
||||
Resrves: |
H Ltd |
3,00,000 |
|||
H Ltd |
2,00,000 |
S Ltd |
1,35,000 |
4,35,000 |
|
S Ltd |
40,000 |
2,40,000 |
Furniture |
||
Profit and Loss Account: |
H Ltd |
50,000 |
|||
H Ltd |
1,00,000 |
S Ltd |
12,750 |
62,750 |
|
S Ltd |
4,600 |
1,04,600 |
Other Assets |
||
Creditors: |
H Ltd |
4,40,000 |
|||
H Ltd |
1,50,000 |
S Ltd |
1,43,000 |
5,83,000 |
|
S Ltd |
50,000 |
2,00,000 |
|||
10,92,750 |
10,92,750 |