Hi All,
I have attached a problem, please help in solving "Analysis of Profits" part of the solution.
Date of Acquisition is 1-Jan-03.Interim dividend(Rs.4000) was paid on 30 Nov 2002. Please let me know if this will be accounted as pre-acquisition dividend and reduced from opening balance of P&L Account(Rs.12,000). If not, then why not.
Regards,
Prachi.
HI prachi,
Such belongs to the profit of financial year or part of financial year before it was being acquired.
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Reserves as on 31.12.2002 is adjusted to that extend which will be incorporated in the books of the Holding Co..
In short opeining balance will reduced to the extend of such dividend but it not a pre acquisition dividend.
Saini Pati Shah & Co LLP, Chartered Accountants
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