Lec-41 - Advanced Financial Accounting Lecture-41 Question Balance Sheet As on 31st December 2008 P(Rs Fixed assets Investment in S Current assets

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Advanced Financial Accounting Lecture-41
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Question Balance Sheet As on 31 st December 2008 P (Rs) S (Rs) Fixed assets 3,500 1,450 Investment in S 2,180 --- Current assets 2,700 1,250 Total assets 8,830 2,700 Share capital 5,000 1,000 Reserves 3,380 1,700 Total 8,830 2,700
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Question The parent Co. (P) acquired 800 of the 1,000 Rs. 1 ordinary shares of subsidiary Co. (S) on 1 st Jan. 2008 for Rs. 2,500. S Co. balance sheet at 31 st December 2007 showed a dividend payable of Rs. 400 and reserves Rs. 400 and reserves of Rs. 1,200. Goodwill impairment loss Rs. 105. Required: Prepare consolidated Balance sheet as on 31 Dec. 2008.
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Working-1 Holding % = 800/100 x100 = 80% Minority % = 100% - 80% = 20%
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Working-2 Pre-acquisition Post-acquisition Share capital 1,000 --- Reserves 1,200 500 Total 2,200 500
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Working-3 Group Reserve All reserves of P Co. 3,380 Add Post acquisition of S Co. 400 3,780 Less Impairment loss 105 3,675
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Working-4 Minority Interest Total owner’s equity of Subsidiary Co. x Minority interest 2,700 x 20% = 540
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Goodwill Cost of investment 2,500 Less Dividend pre-acquisition 320 2,180 Less Pre-acquisition reserve of
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This note was uploaded on 05/15/2010 for the course ACCOUNTING B97702031 taught by Professor Lyz during the Spring '09 term at Punjab Engineering College.

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Lec-41 - Advanced Financial Accounting Lecture-41 Question Balance Sheet As on 31st December 2008 P(Rs Fixed assets Investment in S Current assets

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