consolidation of accounts

guide me how to work on revaluation of Plant and machinery in balance sheet.

Following are the balance sheets of H. Ltd. and its subsidiary S. Ltd. as at

31st March, 2007 :

Liabilities H. Ltd. S. Ltd.

(Rs.) (Rs.)

Equity share capital :

Shares of Rs.10 each fully paid 6,00,000 2,00,000

General reserve 3,40,000 80,000

Profit and loss account 1,00,000 60,000

Creditors 70,000 35,000

11,10,000 3,75,000

Assets

Plant and machinery 3,90,000 1,35,000

Furniture 80,000 40,000

80% Shares in S. Ltd. (at cost) 3,40,000 —

Stock 1,80,000 1,20,000

Debtors 50,000 30,000

Cash at bank 70,000 50,000

11,10,000 3,75,000

Additional information :

(i) Profit and loss account of S. Ltd. stood at Rs.30,000 on 1st April, 2006 whereas

general reserve stood at Rs.80,000 even on this date.

(ii) H. Ltd. acquired 80% shares in S. Ltd. on 1st October, 2006.

(iii) S. Ltd.’s plant and machinery which stood at Rs.1,50,000 on 1st April, 2006

was considered worth Rs.1,80,000 as on 1st October, 2006, this figure is to be

considered while consolidating the balance sheets.

You are required to prepare consolidated balance sheet as at 31st March, 2007.

Replies (1)

Revalued amount of P&M                                                                                180000

Less: wdv as on the date of revaluation                                                       142500

     150000- (150000*10%*6/12)                                                                                                                              Profit on Revaluation (to be included in capital profit)                               37500

Also Rs.(9000+7500)-15000=1500 to be deducted from Revenue P/L.

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