H Ltd had acquired 75% of the equity share capital of S Ltd on 1-7-2008. It had received Rs.12000 as dividend for the year 2007-08. S Ltd had not provided for the dividend

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when the accounts for the year 2007-08 were prepared. Find out the capital & revenue profit if the profit & loss account balances

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were Rs 42000 & Rs 96000 respectively at the end of 2007-08 & 2008-09.


Profit and Loss Account = 96000

Op Balance Rs. 26000

= [42000- (12000*75%)]

= Capital profit

Total Capital Profit = Rs. 43500

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(17500 26000)

Current Year Profit = Rs.70000


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Capital Profit = 17500(70000*3/12)

= Revenue Profit = 52500 (70000*9/12)


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