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Accounts Assignment 2
Accounts Assignment 2
ANALYSIS OF PROFITS
Pre-Acquisition Profits TOTAL H Ltd.
Opening Balances
Reserves 15,000
Surplus A/c 3,000
Profit for the year during Pre-Acquisition Phase
=9/12[10,000-3,000] 5,250
23,250 23.250
Post-Acquisition Profits
=3/12[10,000-3,000] 1,750 1,750
COST OF CAPITAL
Investments done in S Ltd. = 50,000
Less:
Shares in S Ltd. = (30,000)
Share in Pre-Acquisition Profits = (23,250)
Soln 3
In the Books of Downhill Ltd.
Particulars Dr. Cr.
Equity Share Capital A/C 20,00,000
Dr. 1,00,000
To Equity Share Capital a/c 19,00,000
To Capital Reduction a/c
(Being Equity Shares reduced by rs 95.)
Shareholders’ Funds
Share Capital 1 8,00,000
Total 13,00,000
Assets
Current Assets
Stock 2,70,000
Debtors 60,000
Less: Provision for Doubtful debts (5,000) 55,000
Cash at bank 4,85,000
Total 13,00,000
Notes to Accounts
1. Share Capital
10,000 equity shares of rs 10 each = 1, 00, 000
20,000 equity shares of rs 10 each = 2, 00, 000
50,000 equity shares of rs 10 each = 5, 00.000
Soln 4-
1. Profit & Loss a/c Dr. 16,000
To Investment in B Ltd 16,000
ANALYSIS OF PROFITS
PRE ACQUISITION PROFITS TOTAL A Ltd B Ltd.
Opening balance
P&L a/c 8000 6, 400 1, 600
Reserves 1,00,000 80,000 20,000
POST-ACQUISITION PROFITS
COST OF CAPITAL
Goodwill = 15,600
MINORITY INTEREST
M.I. = 83,525
Total 10,94,825
Assets
Non- current assets
Fixed assets
Land & Building 3,70,000
Plant & Machinery 4,10,625
Goodwill 7,200
Current assets
Stock 1,86,000
Sundry debtors 84,000
Trade receivables 14,800
Cash 22,200
Total 10,94,825
Soln 5-
IN THE BOOKS OF GREEN LTD.
Particulars Dr. Cr.
Bank a/c Dr. 10,00,000
To Equity Share Capital 10,00,000
(Being uncalled amount of rs 10 per share
called for 1 lakh shares.)
X Dr. 14,00,000
To 14% First Debentures a/c 7,00,000
To Capital Reduction a/c 7,00,000
(Being cancellation of rs 7 lakh of X &
balance amount paid in the form of
debentures.
Total 42,00,000
Assets
Non-Current Assets
Fixed assets
Building 10,00,000
Plant 10,00,000
Computers 10,00,000
Current assets
Cash & Cash Equivalents 12,00,000
Total 42,00,000
Notes to Accounts
1. Share Capital
1, 50, 000 equity shares of rs 20 each = 30, 00, 000
2. Long Term Borrowings
14% First Debentures = 10, 00, 000