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QUESTIONS FROM PAST EXAM PAPERS

Q12 (November 20 – 8 Marks)

Entity A acquired a subsidiary, Entity B, during the year ended March 3lst, 2020. Summarised information
from the Consolidated Statement of Profit and Loss and Balance Sheet is provided, together with some
supplementary information.
Consolidated Statement of Profit and Loss Amount (₹)
for the year ended March 31st, 2020.

Revenue 1,90,000
Cost of sales (1,10,000)

Gross profit 80,000
Depreciation (15,000)
Other operating expenses (28,000)
Interest cost (2,000)
Profit before taxation 35,000
Taxation (7,500)
Profit after taxation 27,500

Consolidated balance sheet March 31' 2020 March 31' 2019
Assets Amount (₹) Amount (₹)
Cash and cash equivalents 4,000 2,500
Trade receivables 27,000 25,000
Inventories 15,000 17,500
Property, plant and equipment 80,000 40,000
Goodwill 9,000 -
Total assets 1,35,000 85,000
Liabilities
Trade payables 34,000 30,000
Income tax payable 6,000 5,500
Long to debt 50,000 32,000
Total outside liabilities 90,000 67,500
Shareholders' equity 45,000 17,500
Total liabilities & shareholders' equity 1,35,000 85,000

Other information:
All of the shares of entity B were acquired. for ₹37,000 in cash. The fair values of assets acquired and
liabilities assumed were:
Particulars Amount (₹)
Inventories 2,000
Trade receivables 4,000

Cash 1,000
Property, plant and equipment 55,000
Trade payables (16,000)
Long term debt (18,000)

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