Problem

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 when the accounts for the year 2007-08 were prepared. Find out the capital & revenue profit if the profit & loss account balances were Rs 42000 & Rs 96000 respectively at the end of 2007-08 & 2008-09.

Solution:-

Profit and Loss Account = 96000

Op Balance Rs. 26000

= [42000- (12000*75%)]

=   Capital profit

Total Capital Profit = Rs. 43500 (17500+26000)

Current Year Profit = Rs.70000

=   Capital Profit  =  17500(70000*3/12)

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

 

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Post Navigation