dear all,
this is gupta here,
During the previous year one of my Subsidiary company is sold off and profit on sale of Subsidiary is credited to Profit and Loss account of Holding Company the scheme of entry is as below : -
Dr. Bank Account 14956158
Cr. Investment in Subsidiary A 2740000
Cr. Profit on Sale to PnL 12216158
But while doing my consolidation during the year What effect should i give for my subsidiary opening Balances as on 31 - 03 - 2007 which is my closing balance as on 01-04-2007 as the company was sold off in that date
whereas my subsidiary'A' - Stand alone balance sheet shows a Negative Networth of Rs. -59, 48, 124/- as compared to Consolidated balances of this subsidiary is a positive networth of Rs.49, 31, 429/- which is on account of knocking off of inter company transactions
i want know the above entry in holding company is correct or not ?
also i want to know which net worth to give effect during the year ?
hope to get the better replies from u .
| Net Worth of Subsidiary as on date of sale of subsidiary | ||||||
| PARTICULARS | As per Stand Alone Balance Sheet | As per Consolidated Balance Sheet | Difference is inter company balances being knocked off | |||
| Fixed Asset | 2,953,396 | 2,953,396 | - | |||
| current asset | 1,861,954 | 1,861,954 | - | |||
| current liability | (9,650,692) | (12,850) | (9,637,842) | |||
| Deferred Tax Liability | (612,782) | (612,782) | - | |||
| Goodwill | - | 6,204,777 | (6,204,777) | |||
| Net Worth | (5,448,124) | 10,394,495 | (15,842,619) | |||
| Less : | ||||||
| Share Capital | 500,000 | - | 500,000 | |||
| Reserves & Surplus | (5,948,124) | 4,931,429 | (10,879,553) | |||
| Balancing Figure | - | 5,463,066 | (5,463,066) | |||
thanks
Gupta
CAclubindia
