Hep me out if u can

In the books of H Ltd. (Holding Co.)= Profit % = Stk. Reserve/Inst. not due*100 = 400/2000*100 = 20% Instalment Due is inclusive of profit element already credited into P&L A/c. Hence profit entry need to be reversed at above % Dr. P&L A/c. 100 (500*20%) Cr. Instl. Due A/c. 100 Instalment not due is also profit inclusive but netting of stk. reserve will bring down the stk. value to its cost. Now both instl. due & not due have been valued at their original cost, which must be set off against HP liability shown in the books of S Ltd. In the books of S Ltd. (Subsidiary Co.)= HP asset will be recognised at cash price and its equivalent is credited to HP liability A/c. This cash price margin component should be removed simultaneously from Asset A/c. and HP liability a/c. The rest in HP liability will be setoff by Inst. due & not due as aforesaid. The Asset account is shown at original cost. Example : Inst.due - 3000,Inst. Not due - 9000,Stk. Res-2250, original cost - 9000, cash price - 10500. Book of H- Profit element on inst. due is 750 (25%on3K) Now cost of both Inst. due & not due is [3000-750+9000-2250]=9000 which is original cost of the asset. Books of S- Remove cash price from both asset & HP liability Asset = [10500-1500] HP Liability = [10500-1500] HP liability & Cost of Inst. due & not due are netted off. Asset of Rs.9K shown in consolidated B/s. which is the original cost to H Ltd.

thank mr satish karunakaran give good example thanks again satish