Page 5 - 35. FR APRIL 22 MTP QP ANSWERS

Question 4

(a) Prepare the consolidated Balance Sheet as on 31st March, 20X2 of a group of companies comprising P
Limited, S Limited and SS Limited. Their balance sheets on that date are given below:

Rs. in lakh
P Ltd. S Ltd. SS Ltd.

Assets
Non-Current Assets
Property, Plant and Equipment 320 360 300
Investment:
32 lakh shares in S Ltd. 340
24 lakh shares in SS Ltd. 280
Current Assets
Inventories 220 70 50
Financial Assets
Trade Receivables 260 100 220
Bills Receivables 72 - 30
Cash in hand and at Bank 228 40 40
1440 850 640
Equity and Liabilities
Shareholder’s Equity
Share Capital (Rs. 10 per share) 600 400 320
Other Equity
Reserves 180 100 80
Retained earnings 160 50 60
Current Liabilities
Financial Liabilities
Trade Payables 470 230 180
Bills Payable
P Ltd. 70
SS Ltd. 30 - -
1440 850 640
The following additional information is available:

(i) P Ltd. Holds 80% shares in S Ltd. And S Ltd. Holds 75% shares in SS Ltd. Their holdings were acquired
on 30th September, 20X1.
(ii) The business activities of all the companies are not seasonal in nature and therefore, it can be assumed
that profits are earned evenly throughout the year.
(iii) On 1st April, 20X1, the following balances stood in the books of S Ltd. And SS Ltd.
Rs. in Lakhs

S Limited SS Limited
Reserves 80 60
Retained earnings 20 30
(iv) Rs. 10 lakh included in the inventory figure of S Ltd, is inventory which has been purchased from SS Ltd
at cost plus 25%. The sale of goods by SS Ltd. is done after acquisition of shares by S Ltd.
(v) The parent company has adopted an accounting policy to measure non-controlling interest at fair value

(quoted market price) applying Ind AS 103. Assume market prices of S Ltd and SS Ltd are the same as

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