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19,25,000
Add: Depreciation for 2nd half charged on pre- revalued
value 75,000
Less: Depreciation on Rs. 20,00,000
for 6 months (1,00,000) 19,00,000
43,00,000

Consolidated retained earnings Rs.

Particulars DEF Ltd. XYZ Ltd. Total

As given 5,72,000 8,20,000 13,92,000
Consolidation adjustments:
(i) elimination of pre-acquisition element (3,00,000 +
3,60,000) 0 (6,60,000) (6,60,000)
(ii) elimination of intra-group dividend (2,00,000) 2,00,000 0
(iii) impact of fair value adjustments 0 (25,000) (25,000)
Adjusted retained earnings consolidated 3,72,000 3,35,000 7,07,000

Q22. (March 21 – 10 Marks)
Enterprise Ltd. has 2 divisions: Laptops and Mobiles. Division Laptops has been making constant profits while

division Mobiles has been invariably suffering losses.
On 31st March, 20X2, the division-wise draft extract of the Balance Sheet was:
(Rs. in crores)
Laptops Mobiles Total
Property, Plant and Equipment cost 250 500 750
Depreciation (225) (400) (625)
Net Property, Plant and Equipment (A) 25 100 125
Current assets: 200 500 700
Less: Current liabilities (B) (25) (400) (425)
175 100 275
Total (A+B) 200 200 400
Financed by:
Loan funds - 300 300
Capital : Equity Rs. 10 each 25 - 25
Surplus 175 (100) 75
200 200 400
Division Mobiles along with its assets and liabilities was sold for Rs. 25 crores to Turnaround Ltd. a new
company, who allotted 1 crore equity shares of Rs. 10 each at a premium of Rs. 15 per share to the members
of Enterprise Ltd. in full settlement of the consideration, in proportion to their shareholding in the company.

One of the members of the Enterprise Ltd. was holding 52% shareholding of the Company.
Assuming that there are no other transactions, you are asked to:
(i) Pass journal entries in the books of Enterprise Ltd.
(ii) Prepare the Balance Sheet of Enterprise Ltd. after the entries in (i).

(iii) Prepare the Balance Sheet of Turnaround Ltd.
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