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Pinnacle Academy
Chapter Tests [CT] Series
August 2015 Batch
201-202, Florence Classic, Besides Unnati Vidhyalay,
Jain Derasar Road, Ashapuri Society, Akota, Vadodara-20. ph: 98258 561 55
Solution of Test of
CFS – 2
[FR – CA Final]
Conducted on 26th March 2016
(Solution is at the end with markings for self assessment)
Time Allowed-1 hour
Q1
Maximum Marks- 20
The balance sheets of A Ltd. and B Ltd. as on 31.12.2015 are as follows:
Sources of Funds:
A Ltd.
B Ltd.
Share Capital in equity shares of Rs.10 each
Capital Reserve
General Reserve
Profit and Loss Account
Creditors
Total
2,00,000
20,000
30,000
8,000
34,000
2,92,000
50,000
5,000
5,000
8,000
20,000
88,000
Application of Funds:
Fixed Assets
Shares in B Ltd.
Shares in C Ltd.
Stock
A Ltd.
1,74,800
66,000
25,200
26,000
2,92,000
B Ltd.
80,000
--------8,000
88,000
Total
A Ltd. had acquired 4,000 shares in B Ltd. on 1st January, 2015 and sold 1,000 of
them at the Rs.30 on 1st October, 2015. A Ltd. credited the sale proceeds of shares
sold to investment account. An interim dividend of 10% for the full year was paid by
B Ltd. on 1st July, 2015.
Balance in capital reserve, general reserve and Profit and Loss account of B Ltd. on
1st January 2015 were Rs.3,000, Rs.2,000 and Rs.6,000 respectively.
A Ltd. had also acquired 1,200 shares of C Ltd. as on 1st January 2015 for Rs.15 per
share. On that date the profit and loss account of C Ltd. had a balance of Rs.4,400.
A Ltd. acquired another 400 shares for Rs.18 per share on 1st April 2015 when the
profit and loss account of C Ltd. showed a balance of Rs.5,300.
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Balance sheet of C Ltd. as on 31st December 2015 is as under:
Liabilities
Share Capital:
Eq. Shares of Rs. 10 each
Profit & Loss A/c
Creditors
Amount Assets
Fixed Assets
20,000 Stock
7,200
4,800
32,000
Amount
30,000
2,000
32,000
Prepare consolidated balance sheet of A Ltd. and its subsidiaries B Ltd. and C Ltd.
as on 31st December 2015.
(20 Marks)
(Assessed answer papers shall be returned latest by
14th April 2016)
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Solution of Test of CFS – 2
Conducted on 26th March 2016
Q1
A Ltd.
3,000 / 5,000
1,600 / 2,000
1,200 / 2,000 i.e. 60 % (01.01.15)
60%
(01.01.15)
80%
400 / 2.000 i.e. 20 % (01.04.15)
B Ltd.
C Ltd.
Working Notes:
(1) Profits earned by subsidiaries during 2015:
B Ltd. C Ltd.
(Rs.)
(Rs.)
8,000 7,200
3,000 ------5,000 ------16,000 7,200
6,000 4,400
10,000 2,800
P & L A/c as on 31.12.15
Add: Transfer to general reserve
Interim Dividend for 2015
Less: P & L A/c as on 01.01.15
(2 Marks)
(2) Analysis of Profits of Subsidiaries:
(a) B Ltd.
General Reserve on 01.01.15
Capital Reserve on 01.01.15
P & L A/c on 01.01.15
Profits in 2015
Transfer to general reserve
Interim dividend for 2015
Increase in capital reserve
Minority (40%)
A Ltd. (60%)
(b) C Ltd.
P & L A/c on 01.01.15
Profits in 2015
Minority (20%)
A Ltd. (80%)
Adjustment for additional 20%
shares for profits earned from
01.01.15 to 01.04.15
(5,300 – 4,400 i.e. 900 X 20%)
A Ltd. (Revised)
Capital Revenue Revenue
Capital
Profits
Profits Reserve Reserve
2,000
------------------------3,000
------------------------6,000
--------------------------------10,000
----------------11,000
10,000
------------------------(3,000)
3,000
----------------(5,000)
----------------------------------------2,000
11,000
2,000
3,000
2,000
4,400
800
1,200
800
6,600
1,200
1,800
1,200
4,400
------4,400
880
3,520
------------------------180
3,700
-------2,800
2,800
560
2,240
------------------------(180)
2,060
---------------------------------------------------------------------------------
--------------------------------------------------------------------------------(5 Marks)
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(3) Rectified cost of investment in shares of B Ltd.:
As per balance sheet
Add: Sale proceeds wrongly credited
Less: Cost of shares sold
(96,000 / 4,000 i.e. 24 X 1,000)
Rectified Cost
No. of Amount
shares
3,000
66,000
1,000
30,000
4,000
96,000
1,000
3,000
24,000
72,000
(2 Marks)
(4) Cost of Control:
Cost of Shares
Less: Paid up value
Share in capital profits
Goodwill
B Ltd. C Ltd.
72,000 25,200
30,000 16,000
6,600
3,700
35,400
5,500
40,900
(2 Marks)
(5) Minority Interest:
Paid up value of shares
Share in profits and reserves
B Ltd. C Ltd.
20,000 4,000
7,200 1,440
27,200 5,440
32,640
(1 Mark)
(6) Consolidated P & L A/c:
P & L A/c as on 31.12.15 of A Ltd.
Add: Share in revenue profits (2,060 + 1,200)
Profit on sale of shares of B (30,000 – 24,000)
Amount
(Rs.)
8,000
3,260
6,000
17,260
(1 Mark)
(7) Consolidated General Reserve and Capital Reserve:
Reserve as on 31.12.15 of A Ltd.
Add: Share from B
General
Capital
Reserve Reserve
30,000
20,000
1,800
1,200
31,800
21,200
(1 Mark)
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Consolidated Balance Sheet of A Ltd. as on 31st December 2015
Note No.
Amount
Amount
I.
1.
(a)
(b)
Equity and Liabilities:
Shareholders’ Funds
Share Capital
Reserves and Surplus
2.
Minority Interest
32,640
3.
Current Liabilities
Trade Payables
58,800
2,70,260
1
2,00,000
70,260
58,800
3,61,700
Total
II.
1.
2.
Assets:
Non Current Assets
(a) Tangible Fixed Assets
(b) Intangible Fixed Assets (Goodwill)
3,25,700
2,84,800
40,900
Current Assets
Inventories
36,000
36,000
3,61,700
Total
See accompanying notes to Consolidated Balance Sheet.
Notes forming part of Consolidated Balance Sheet
Note
No.
1
Amount Amount
(Rs.)
(Rs.)
Reserves and Surplus
Consolidated Capital Reserve
Consolidated General Reserve
Consolidated Profit and Loss Account
21,200
31,800
17,260
70,260
(6 Marks)
Solution prepared by
CA. Ashish Lalaji
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