Holding Co. Doubt

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Question is related to  consolidated Balance sheets as per AS 21-

In case dividend is proposed by Subsidiary co., & same is included in debtors of Holding Co. as it's  receivables , then what is the need of deducting the same amount in balance sheet from debtors ? how this is a contra item ? 

Replies (3)

see sahil

when dividend is declared by the subsidiary you must have done this entry in holding co books

dividend receivable a/c (asset side of holding)            dr

           to p&l a/c

and in books of subsidiary it is standing as

p&l approation a/c                         dr

            to dividend payable a/c (liability side of subsidiary)

to cancell both these in consolidated balance sheet u have to pas this entry on date of consolidation

dividend payable a/c             dr

             to dividend receivable a/c

( being our dividend receivable cancelled with dividend payable of subsidiary )

hope ur query is resolved or else u can contact me at muditrastogi1988 @ gmail.com

Agree with Mr. Mudit..........

AGREE  WITH ABOVE

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