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Pinnacle Academy
Solutions of Tests of
April 2015 Batch
201-202, Florence Classic, Besides Unnati Vidhyalay,
Jain Derasar Road, Ashapuri Society, Akota, Vadodara-20. ph: 98258 561 55
Test of
CFS – 2
Conducted on 19th September 2015
(Solution is at the end with markings for self assessment)
Time Allowed-1 hour
Q1
Maximum Marks- 20
Balance sheets as on 31st March 2012 are as under:
Sun
Moon
Share Capital
(Rs.10)
1,50,000 1,00,000
Reserves
50,000
40,000
P & L A/c
60,000
50,000
Creditors
30,000
35,000
Sun Ltd.
----10,000
Light
60,000
30,000
40,000
25,000
8,000
Sun
Fixed
Assets
Shares
in:
Moon
Light
Stock
Debtors
Moon Ltd
Light Ltd.
Cash
2,90,000 2,35,000 1,63,000
Moon
Light
70,000 1,20,000 1,03,000
90,000
40,000
50,000
40,000
30,000
20,000
20,000
25,000
30,000
12,000
8,000
10,000
10,000
10,000
2,90,000 2,35,000 1,63,000
i.
Additional Information:
Sun Ltd. held 8,000 shares of Moon Ltd. and 1,800 shares of Light Ltd.
ii.
Moon Ltd. held 3,600 shares of Light Ltd.
iii.
All these investments were made on 1st July 2011.
iv.
10 % dividend is proposed by Sun Ltd.
v.
Moon Ltd. invoiced goods to Sun Ltd. for Rs.4,000 at a cost plus 25% in December
2011. The closing stock of Sun Ltd. includes such goods valued at Rs.5,000.
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vi.
Light Ltd. sold to Moon Ltd. an equipment costing Rs.24,000 at a profit of 25% on
selling price on 1st January 2012. Depreciation at 10% p.a. was provided by Moon
Ltd. on the equipment.
vii.
On 1st July 2011 the position was as shown below:
Moon
Light
Reserves
25,000 15,000
Profit and Loss A/c 20,000 25,000
(20 Marks)
(Assessed answer papers shall be returned latest by 3rd October 2015)
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Solution of Test of CFS – 2
Conducted on 19th September 2015
Q1
Sun has 80% in Moon and 30% in Light.
Moon has 60% in Light.
Working Notes:
(i) Profit earned during 01.7.11 to 31.03.12:
P & L A/c on 31.03.12
Add: Transfer to reserves
Less: P & L A/c on 01.07.11
Moon
50,000
15,000
65,000
20,000
45,000
Light
40,000
15,000
55,000
25,000
30,000
Note: P & L A/c balance is on 01.07.11, which is also the relevant date. Thus, profit
determined as above is entirely revenue in nature.
(2 Marks)
(ii) Analysis of Profits:
Light Ltd.:
Reserves on 01.07.11
P & L A/c on 01.07.11
Profit from 01.07.11 to 31.03.12
Transfer to reserves
Unrealised profit in sale of equipment to
Moon net of depreciation
[24,000 X 25 / 75 i.e. 8,000 – Dep:
(8,000 X 10% X 3 / 12) i.e. 200]
Minority (10%)
Moon Ltd. (60%)
Sun Ltd. (30%)
Moon Ltd.:
Reserves on 01.07.11
P & L A/c on 01.07.11
Profit from 01.07.11 to 31.03.12
Share from Light Ltd.
Transfer to reserves
Unrealised profit on sale of goods to
Sun Ltd. [4,000 X 25 / 100]
Minority (20%)
Sun Ltd. (80%)
Capital
Profits
Revenue
Profits
Revenue
Reserves
15,000
25,000
--------40,000
---------
----------------30,000
30,000
(15,000)
--------------------------------15,000
--------40,000
4,000
24,000
12,000
(7,800)
7,200
720
4,320
2,160
--------15,000
1,500
9,000
4,500
25,000
20,000
--------45,000
---------
----------------45,000
4,320
49,320
(15,000)
------------------------9,000
9,000
15,000
--------45,000
9,000
36,000
(1,000)
33,320
6,664
26,656
--------24,000
4,800
19,200
(Direct Approach)
(5 Marks)
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(iii) Cost of Control:
Cost of Shares
Less: Paid-up value
Share in capital profits
Sun Ltd. in
Moon Ltd.
Light Ltd.
90,000
40,000
80,000
18,000
36,000
12,000
(26,000)
10,000
Capital Reserve
Moon Ltd. in
Light Ltd.
50,000
36,000
24,000
(10,000)
26,000
(2 Marks)
(iv) Minority Interest:
Paid-up value of shares
Add: Share in profits
Moon Ltd. Light Ltd.
20,000
6,000
20,464
6,220
40,464
12,220
52,684
(1 Mark)
(v) Consolidated P & L A/c:
P & L A/c on 31.03.12 of Sun Ltd.
Add: Share in revenue profits from Moon Ltd.
Light Ltd.
Provision for own proposed dividend (1,50,000 X 10%)
60,000
26,656
2,160
(15,000)
73,816
(1 Mark)
(vi) Consolidated Reserves:
Reserves on 31.03.12 of Sun Ltd.
Add: Share in reserves from Moon Ltd.
Light Ltd.
Capital reserve on consolidation
50,000
19,200
4,500
26,000
99,700
(1 Mark)
Consolidated Balance Sheet of Sun Ltd. as on 31st March 2012
I.
1.
(a)
(b)
Equity and Liabilities:
Shareholders’ Funds
Share Capital
Reserves and Surplus
2.
Minority Interest
3.
Current Liabilities
Trade Payables
Short term provisions (Proposed dividend)
Note No.
Amount
1
1,50,000
1,73,516
Amount
3,23,516
52,684
Total
1,05,000
2
90,000
15,000
4,81,200
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II.
1.
2.
Assets:
Non Current Assets
Tangible Fixed Assets
3
Current Assets
Inventories
Trade Receivables
Cash and Cash Equivalents
4
5
6
2,85,200
2,85,200
1,96,000
89,000
75,000
32,000
Total
4,81,200
See accompanying notes.
Note
No.
1
2
Amount
(Rs.)
Reserves and Surplus
Consolidated Reserves
Consolidated Profit and Loss Account
99,700
73,816
1,73,516
Trade Payables
Creditors (30,000 + 35,000 + 25,000)
Add: Inter-Company (10,000 + 8,000)
90,000
18,000
1,08,000
18,000
90,000
Less: Mutual Obligation
3
Tangible Fixed Assets
As given
Less: Unrealised profit
4
Inventories
Less: Unrealised Profit
5
Trade Receivables
Debtors
Add: Inter-company (12,000 + 8,000)
2,93,000
7,800
2,85,200
90,000
1,000
89,000
Less: Cheque in transit (20,000 – 18,000)
Less: Mutual Obligation
7
Cash and Cash Equivalents
Cheque-in-transit
Cash in hand and at bank
75,000
20,000
95,000
2,000
93,000
18,000
75,000
2,000
30,000
32,000
(8 Marks)
Solution prepared by
CA. Ashish Lalaji
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