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Question 5 The summarized Balance Sheets of Super Limited and Clear Limited as on 31st March,2024 is as below: Particulars Note Super Limited ` Clear Limited ` Equity and Liabilities Shareholders’ Funds (a) Share Capital 1 95,00,000 50,00,000 (b) Reserves and Surplus 2 25,75,000 12,25,000 Non-Current Liabilities (a) Long term borrowings 3 5,00,000 2,00,000 Current Liabilities (a) Short term borrowings 4,50,000 - (b) Trade Payables 3,65,000 2,45,000 Total 1,33,90,000 66,70,000 Assets Non-current assets (a) Property, Plant and Equipment 4 77,00,000 54,00,000 (b) Non-Current Investment 5 41,50,000 - Current Assets (a) Inventories 6,75,000 5,65,000 (b) Trade Receivables 5,85,000 4,90,000 (c) Cash and Cash equivalents 2,80,000 2,15,000 Total 1,33,90,000 66,70,000 Notes to Accounts: Particulars Super Limited ` Clear Limited ` 1. Share Capital 8,00,000 Equity Shares of ` 10 each fully paid up 80,00,000 5,00,000 Equity Shares of ` 10 each fully paid up - 50,00,000 15,000 Preference Shares of ` 100 each fully paid up 15,00,000 - 95,00,000 50,00,000 2. Reserves and Surplus General Reserve 15,50,000 6,50,000 Profit and Loss Account 10,25,000 5,75,000 25,75,000 12,25,000 3. Long term borrowing 10% Debentures 5,00,000 - 9% Debentures - 2,00,000 4. Property, Plant & Equipment Land & Building 65,00,000 45,50,000 Plant & Machinery 9,50,000 6,75,000 Furniture & Fittings 2,50,000 1,75,000 77,00,000 54,00,000 5. Non–Current Investment Investment in Clear Limited 41,50,000 - Additional Information: (a) Super Limited holds 75% of Equity Shares in Clear Limited since the incorporation of Clear Limited. (b) 25% of Trade Receivables of Super Limited is due from Clear Limited. ADVANCED ACCOUNTING (c) During the year Super Limited sold inventory costing ` 2,00,000 to Clear Limited at a price of 15% above cost. The entire inventory remains unsold with Clear Limited at the end of financial year. You are required to prepare Consolidated Balance Sheet of Super Limited and Clear Limited as on 31st March, 2024. (14 Marks)

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Detailed Solution & Explanation

Consolidated Balance Sheet of Super Ltd. and its subsidiary Clear Ltd. as at 31st March, 2024 Particulars Note No. (`) I. Equity and Liabilities (1) Shareholders’ Funds (a) Share Capital 1 95,00,000 (b) Reserves and Surplus 2 34,63,750 (2) Minority Interest [W.N.4] 15,56,250 (3) Non-current Liabilities (a) Long term borrowings 3 7,00,000 (4) Current Liabilities (a) Short-term borrowings 4,50,000 (b) Trade payables 4 4,63,750 Total 1,61,33,750 II. Assets (1) Non-current assets (a) Property, Plant & Equipment 5 1,31,00,000 (b) Intangible Assets – Goodwill 4,00,000 (2) Current assets (a) Inventory 6 12,10,000 (b) Trade Receivables 7 9,28,750 (c) Cash and Cash Equivalents 4,95,000 Total 1,61,33,750 Notes to Accounts ` ` 1. Share Capital Equity Share Capital 8,00,000 Equity Shares of ` 10 each fully paid up 80,00,000 Preference Share Capital 15,000 Preference Shares of ` 100 each fully paid up 15,00,000 Total 95,00,000 2. Reserves and Surplus General Reserve (WN 5) 20,37,500 Profit & Loss A/c (WN 5) 14,26,250 Total 34,63,750 3. Long term borrowings 10% Debentures 5,00,000 9% Debentures 2,00,000 Total 7,00,000 4 Trade payables Super Ltd. 3,65,000 Clear Ltd. 2,45,000 Less: Mutual Owing (1,46,250) 4,63,750 5 Property Plant & Equipment Land & Building Super Ltd. 65,00,000 Clear Ltd. 45,50,000 1,10,50,000 Plant & Machinery Super Ltd. 9,50,000 Clear Ltd. 6,75,000 16,25,000 ADVANCED ACCOUNTING Furniture & Fittings Super Ltd. 2,50,000 Clear Ltd. 1,75,000 4,25,000 6 Inventory Super Ltd. 6,75,000 Clear Ltd. 5,65,000 Less: Unrealized profit (30,000) 12,10,000 7 Trade Receivables Super Ltd. 5,85,000 Clear Ltd. 4,90,000 Less: Mutual Owing (1,46,250) 9,28,750 Working Notes: 1. Shareholding Pattern Super Ltd 5,00,000 Shares Holding 75% 3,75,000 shares Minority Interest 25% 1,25,000 shares 2. Analysis of Profit of Clear Ltd. Capital Profit Revenue Reserve Revenue Profit Opening Balance of General Reserve - 6,50,000 - Opening Balance of P&L - - 5,75,000 Total ` 6,50,000 5,75,000 Share of Minority (25%) 1,62,500 1,43,750 Share of Holding (75%) 4,87,500 4,31,250 3. Computation of Cost of Control (Goodwill / Capital Reserve) Computation ` Cost of Investment Given 41,50,000 Less: Share of Equity Capital in Clear Ltd. 50,00,000 × 75% (37,50,000) Less: Pre -acquisition Profit WN 2 - Goodwill 4,00,000 4. Calculation of Minority Interest Particulars ` Share in Equity Share Capital 50,00,000 × 25% 12,50,000 Share in Revenue Reserve 6,50,000 × 25% 1,62,500 Share in profit & loss 5,75,000 × 25% 1,43,750 Total 15,56,250 5. General Reserve and Consolidated Profit & Loss A/c Particulars General Reserve Profit & Loss A/c Balance from Balance Sheet 15,50,000 10,25,000 Revenue Profit (WN 2) - 4,31,250 Revenue Reserve (WN 2) 4,87,500 - Unrealized Profit - (30,000) Total 20,37,500 14,26,250

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