Find solutions to your questions with the help of IDNLearn.com's expert community. Our platform provides trustworthy answers to help you make informed decisions quickly and easily.
Sagot :
To prepare a consolidated balance sheet for M Ltd and C Ltd, we need to combine both companies' assets and liabilities, while accounting for the minority shareholders' interest. Let's go step-by-step:
### Initial Liabilities and Assets
#### Liabilities:
- M Ltd Liabilities:
- Share capital of Rs. 10 each: 150,000
- Reserves: 20,000
- Creditors: 25,000
- Profit and Loss account: 30,000
- Profit for the year: 25,000
- C Ltd Liabilities:
- Share capital of Rs. 10 each: 30,000
- Creditors: 9,500
- Profit and Loss account: 4,500
- Profit for the year: 6,000
#### Assets:
- M Ltd Assets:
- Sundry assets: 140,000
- 2,000 shares in C Ltd: 27,000
- Current assets: 58,000
- C Ltd Assets:
- Sundry assets: 40,000
- Current assets: 10,000
### Consolidated Liabilities Calculation
1. Share capital of Rs. 10 each:
[tex]\[ 150,000 (M Ltd) + 30,000 (C Ltd) = 180,000 \][/tex]
2. Reserves:
[tex]\[ 20,000 (M Ltd) + 0 (C Ltd) = 20,000 \][/tex]
3. Creditors:
[tex]\[ 25,000 (M Ltd) + 9,500 (C Ltd) = 34,500 \][/tex]
4. Profit and Loss account:
[tex]\[ 30,000 (M Ltd) + 4,500 (C Ltd) = 34,500 \][/tex]
5. Profit for the year:
[tex]\[ 25,000 (M Ltd) + 6,000 (C Ltd) = 31,000 \][/tex]
### Consolidated Assets Calculation
1. Sundry assets:
[tex]\[ 140,000 (M Ltd) + 40,000 (C Ltd) = 180,000 \][/tex]
2. Current assets:
[tex]\[ 58,000 (M Ltd) + 10,000 (C Ltd) = 68,000 \][/tex]
3. 2,000 shares in C Ltd:
[tex]\[ 27,000 (M Ltd only) \][/tex]
### Minority Interest Calculation
- The minority interest is calculated as the difference between the share capital of C Ltd and the value of shares in C Ltd owned by M Ltd:
[tex]\[ Minority Interest = 30,000 (C Ltd Share Capital) - 27,000 (Value of 2,000 shares in C Ltd) = 3,000 \][/tex]
### Consolidated Balance Sheet
#### Consolidated Liabilities
[tex]\[ \begin{array}{|c|} \hline \textbf{Consolidated Liabilities} \\ \hline \text{Share capital of Rs. 10 each} & 180,000 \\ \hline \text{Reserves} & 20,000 \\ \hline \text{Creditors} & 34,500 \\ \hline \text{Profit and Loss account} & 34,500 \\ \hline \text{Profit for the year} & 31,000 \\ \hline \text{Minority Interest} & 3,000 \\ \hline \end{array} \][/tex]
#### Consolidated Assets
[tex]\[ \begin{array}{|c|} \hline \textbf{Consolidated Assets} \\ \hline \text{Sundry assets} & 180,000 \\ \hline \text{Current assets} & 68,000 \\ \hline \text{2,000 shares in C Ltd} & 27,000 \\ \hline \end{array} \][/tex]
These calculations represent a bird’s-eye view of M Ltd and C Ltd's financial status after the consolidation. The interests of the minority shareholders are properly accounted for as a separate item in the liabilities.
### Initial Liabilities and Assets
#### Liabilities:
- M Ltd Liabilities:
- Share capital of Rs. 10 each: 150,000
- Reserves: 20,000
- Creditors: 25,000
- Profit and Loss account: 30,000
- Profit for the year: 25,000
- C Ltd Liabilities:
- Share capital of Rs. 10 each: 30,000
- Creditors: 9,500
- Profit and Loss account: 4,500
- Profit for the year: 6,000
#### Assets:
- M Ltd Assets:
- Sundry assets: 140,000
- 2,000 shares in C Ltd: 27,000
- Current assets: 58,000
- C Ltd Assets:
- Sundry assets: 40,000
- Current assets: 10,000
### Consolidated Liabilities Calculation
1. Share capital of Rs. 10 each:
[tex]\[ 150,000 (M Ltd) + 30,000 (C Ltd) = 180,000 \][/tex]
2. Reserves:
[tex]\[ 20,000 (M Ltd) + 0 (C Ltd) = 20,000 \][/tex]
3. Creditors:
[tex]\[ 25,000 (M Ltd) + 9,500 (C Ltd) = 34,500 \][/tex]
4. Profit and Loss account:
[tex]\[ 30,000 (M Ltd) + 4,500 (C Ltd) = 34,500 \][/tex]
5. Profit for the year:
[tex]\[ 25,000 (M Ltd) + 6,000 (C Ltd) = 31,000 \][/tex]
### Consolidated Assets Calculation
1. Sundry assets:
[tex]\[ 140,000 (M Ltd) + 40,000 (C Ltd) = 180,000 \][/tex]
2. Current assets:
[tex]\[ 58,000 (M Ltd) + 10,000 (C Ltd) = 68,000 \][/tex]
3. 2,000 shares in C Ltd:
[tex]\[ 27,000 (M Ltd only) \][/tex]
### Minority Interest Calculation
- The minority interest is calculated as the difference between the share capital of C Ltd and the value of shares in C Ltd owned by M Ltd:
[tex]\[ Minority Interest = 30,000 (C Ltd Share Capital) - 27,000 (Value of 2,000 shares in C Ltd) = 3,000 \][/tex]
### Consolidated Balance Sheet
#### Consolidated Liabilities
[tex]\[ \begin{array}{|c|} \hline \textbf{Consolidated Liabilities} \\ \hline \text{Share capital of Rs. 10 each} & 180,000 \\ \hline \text{Reserves} & 20,000 \\ \hline \text{Creditors} & 34,500 \\ \hline \text{Profit and Loss account} & 34,500 \\ \hline \text{Profit for the year} & 31,000 \\ \hline \text{Minority Interest} & 3,000 \\ \hline \end{array} \][/tex]
#### Consolidated Assets
[tex]\[ \begin{array}{|c|} \hline \textbf{Consolidated Assets} \\ \hline \text{Sundry assets} & 180,000 \\ \hline \text{Current assets} & 68,000 \\ \hline \text{2,000 shares in C Ltd} & 27,000 \\ \hline \end{array} \][/tex]
These calculations represent a bird’s-eye view of M Ltd and C Ltd's financial status after the consolidation. The interests of the minority shareholders are properly accounted for as a separate item in the liabilities.
We appreciate your presence here. Keep sharing knowledge and helping others find the answers they need. This community is the perfect place to learn together. Accurate answers are just a click away at IDNLearn.com. Thanks for stopping by, and come back for more reliable solutions.
