Holding companies

Dear Friends,

Please calculate the profit & loss Balance( Pre & post) & capital / Goodwill on consolidation  to be considered for the purpose of analysis of networth for the following.

date of Acquistion- 1.10.04

Profit for the year ended  of S Ltd 31.3.2005- 82,000

Profit as on 1.4.05 of S Ltd is 30,000/-

Balance sheet period is 1.4.04 to 313.05.

The company i.e S ltd declared a dividend of 10% .

Share capital of S Ltd is 2,00,000/- (20,000) shares of Rs 10/ each

Investment in shares of S Ltd -done by H ltd is 16000 shares purchased at 340000/-

Please do the needful.

Replies (4)

                                                                                     p & l a/c for the yr 31.3.2005

to bal b/d (on 1.4.04)                                          32000

(bal fig)

to div paid                                                             20000              

to bal c/d                                                               30000                by profit earned during yr                               82000       

                                                                               82000                                                                                            82000

 

calculation of cap profit & rev profit:

                                                                             cap profit                                  rev profit

op bal of p/l                                                          (32000)

profit earned during the yr  82000                    41000                                        41000

(6m : 6m)

total                                                                           9000                                        41000

less:

div paid                                                                   20000

total                                                                        (11000)                                       41000

holding co int (16000/20000)80%                   (8800)                                         32800              

minority int   20%                                                 (2200)                                          8200

 

calculation of goodwill/cap res

inv in s ltd                                                                                                                     340000

less:

share cap                                                               160000

cap profit                                                                   (8800)                                        151200

goodwill                                                                                                                        188800

the above solution is incorrect, the information in the ques. is not complete, Ques. says profit FOR THE YEAR is 82000/- whereas priya has taken it as P&L balance as on 31-03-2005. Please provide clear details.

thanks for  your reply arihant.

actually due to alighnment problem my p&l a/c does not appear clear . i hv also taken profit for the yr 04-05 is rs 82000 & apportioned it in between cap profit & rev profit rs 41000 respectivly. bal of p& l a/c as on 31.3.2005 is rs 30000.

i hv calculated bal of p&L a/c as on 1.4.2004 as such to add in cap profit

                                                                              p&l a/c for the yr ending 31.3.2005

to bal b/d                                                32000                             by profit earned during yr                        82000

(bal fig)

to div paid                                               20000

to bal c/d                                                 30000                                                                                                   .........

                                                                  82000                                                                                                 82000

 

  • the bal fig rs 32000 of p&l a/c as on 1.4.2004 is loss
  • even now my ans is wrong plz reply me the correct ans

Assumption: Dividend declared is out of pre-acquisition profit:

Pre-acquisition profit - 32000+ 41000  - 20000 = 53000 - H Ltd- 42400  S Ltd- 10600

Post acquisition profit =41000 - H Ltd-32800 S Ltd- 8200

Minority Interest- 40000+ 10600+ 8200 + 4000(Dividend) = 62800

Cost of Control - 340000 -16000 = 324000

                               160000 + 42400 =202400

Therefore, goodwill is 121600.

Correct me, if i am wrong.

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
12 October 2026
Chartered Accountant - Internal Audit

HKC | Chartered Accountants & Business Advisors

Ludhiana

CA

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details
Company
08 October 2026
SALES TELECALLER

HIRE NOVA

Lucknow

Graduate (Any)

View Details
Company
ARTICLESHIP 23 October 2026
Articled Trainee

J Y & CO

Hyderabad

CA Inter

View Details
Company
ARTICLESHIP 07 October 2026
Article Trainee/ CMA Trainee

RMA And Associates LLP

New Delhi

CA Inter

View Details
Company
14 October 2026
Asst. Manager/Dy Manager (Costing)

manufacturing

Pune

CMA

View Details