The following Balance Sheets are given as on 31st March, 2008:
|
|
(Rs. in lakhs) |
|
(Rs. in lakhs) |
||
|
|
Best Ltd. |
Better Ltd |
|
Best Ltd. |
Better Ltd |
|
Share Capital: |
|
|
|
|
|
|
Shares of Rs. 100, each fully paid |
20 |
10 |
Fixed Assets |
25 |
15 |
|
Reserve and Surplus |
10 |
8 |
Investments |
5 |
- |
|
Other Liabilities |
20 |
2 |
Current Assets |
20 |
5 |
|
|
50 |
20 |
|
50 |
20 |
The following further information is given —
(a) Investments of Best Ltd. include Rs. 3 lakhs representing shares in Better Ltd. having a face value of Rs. 2 lakhs.
(b) Better Limited issued shares on 1st April, 2008, in the ratio of one share for every two held, out of Reserves and Surplus.
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What would be the position on 01/04/2008.
|
|
(Rs. in lakhs) |
|
(Rs. in lakhs) |
||
|
|
Best Ltd. |
Better Ltd |
|
Best Ltd. |
Better Ltd |
|
Share Capital: |
|
|
|
|
|
|
Shares of Rs. 105, each fully paid |
21 |
15 |
Fixed Assets |
25 |
15 |
|
Reserve and Surplus |
10 |
3 |
Investments |
6 |
- |
|
Other Liabilities |
20 |
2 |
Current Assets |
20 |
5 |
|
|
50 |
20 |
|
50 |
20 |
Reasons:
Share capital of Better ltd. : Due to issuance of bonus shares (10,00,000 + 5,00,000)
Reserves and Surplus of Better Ltd. : 8,00,000 – 5,00,000 (use of reserves and surplus in bonus issue)
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Investment of Best Ltd. : 5 Lakhs to 6 Lakhs due to issuance of bonus share by Better Ltd.
(2,00,000/100 = 2000 shares, after bonus share, 3000 shares x Rs. 100 = 3,00,000)
Share capital of Best Ltd. : 20 Lakhs to 21 Lakhs due to impact on investment by bonus shares issued by Better ltd.
Am I correct ?
CAclubindia
