Accounts Paper

3. Under what circumstances, an amalgamation is classified as an 'amalgamation in the nature of

merger' ? (5 Marks)

4. What are the conditions to be satisfied in case of amalgamation in the nature of merger as per
Accounting Standard (AS) – 14 ? (5 Marks)

5. Contingent liability in respect of a transaction between holding and wholly owned subsidiary
companies will not appear in the footnote of the consolidated balance sheet. (5 Marks)
 Accounts Paper

H Ltd. acquired the shares on 1st August, 2011. The profit and loss account of S Ltd. showed a debit
balance of `1,50,000 on 1st April, 2011. During June, 2011 goods of S Ltd. costing `6,000 were
destroyed by fire against which insurer paid only `2,000. Trade payables of S Ltd. include `20,000 for
goods supplied by H Ltd. on which H Ltd. made a profit of `2,000. Half of the goods were still in stock
on 31st March, 2012. Prepare a consolidated balance sheet and show the complete working.

(9 marks )