The following are the summarized Balance Sheets of Seva Limited and its subsidiary Meva Limited as at 31 st March 2025: Particulars Seva Limited (₹…

Consolidated Balance Sheet of Seva Ltd. and its subsidiary Meva Ltd. as at 31 st March, 2025 Particulars Note No. (₹ in Lacs) I. Equity and Liabilities (1) Shareholder's Funds (a) Share Capital 1 6,000 (b) Reserves and Surplus 2 5,840 (2) Minority Interest [W.N.6] 1,335 (3) Non-current liabilities (a) Long term borrowings 3 2,000 (4) Current Liabilities (a) Trade payables 4 2,580 Total 17,755 II. Assets (1) Non-current assets (a) Property, Plant and Equipment 5 11,260 (2) Current assets (a) Inventories 6 2,475 (b) Trade receivables 7 2,420 (c) Cash and cash equivalents 8 1,600 Total 17,755 Notes to Accounts (₹ in lacs) (₹ in lacs) 1 Share Capital Authorized share capital 900 Equity shares of 10each, fully paid up 9,000 Issued and Subscribed: 600 Equity shares of 10each, fully paid up 6,000 Total 6,000 2 Reserves and surplus Capital Reserve (Note 5) 1,640 General Reserve (Note 8) 1,660 Profit and Loss Account (Note 8) 2,540 Total 5,840 3 Long term Borrowings 10% Debentures of 10each (1,180 + 820) 2,000 4 Trade payables Seva Ltd. 1,500 Meva Ltd. 1,080 2,580 5 Property, plant and equipment Land and Buildings Seva Ltd. 4,000 Meva Ltd. 4,150 8,150 Plant and Machinery Seva Ltd. 1,460 Meva Ltd. 1,650 3,110 Total 11,260 6 Inventories Seva Ltd. 1400 Meva Ltd. 1,100 2,500 Less: Unrealized profit (25) 2,475 7 Trade receivables Seva Ltd. 1,420 Meva Ltd. 1,000 2,420 8 Cash and cash equivalents Cash at Bank (550 + 600) 1,150 Cash in hand (350+100) 450 1,600 Working Notes: 1. Meva Ltd.'s General Reserve Account ₹ in lakhs ₹ in lakhs To Bonus to equity shareholders (WN-8) 1,000 By Balance b/d 2,000 To Balance c/d 1,200 By Profit and Loss A/c 200 2,200 2,200 2. Meva Ltd.'s Profit and Loss Account ₹ in lakhs ₹ in lakhs To General Reserve [WN 1] 200 By Balance b/d 800 To Balance c/d 1,500 By Net Profit for the year (Balancing figure) 900 1,700 1,700 3. Distribution of Revenue profits ₹ in lakhs Revenue profits (W. N. 2) 900 Less: Share of Seva Ltd. Share in General Reserve (80% of 200) = 160 Share in P&L A/c (80% of 700) = 560 (720) Share of Minority Shareholders (20%) 180 4. Calculation of Capital Profits ₹ in lakhs General Reserve on the date of acquisition less bonus shares (2,000 – 1,000) 1,000 Profit and loss account on the date of acquisition 800 1,800 Seva Ltd.'s share = 80% of 1,800 lakhs = 1,440 lakhs Minority interest = 1,800 - 1,440 = 360 lakhs 5. Calculation of capital reserve ₹ in lakhs Paid up value of shares held (80% of 4,000) 3,200 Add: Share in capital profits [WN 4] 1,440 4,640 Less: Cost of shares (3,000) Capital reserve 1,640 6. Calculation of Minority Interest ₹ in lakhs 20% of share capital (20% of 4,000) 800 Add: Share in revenue profits [WN 3] 180 Share in capital profits [WN 4] 360 1,340 Less: Unrealized profit (80% of 25) 5 Minority Interest 1,335 7. Unrealized profit in respect of inventory 25 lakhs (80% Related to Seva Ltd. and 20% related to Meva Ltd) 8. Calculation of Consolidated General Reserve and Profit & Loss A/c of Seva Ltd. General Reserve P&L A/c Balance on reporting date 1,500 2,000 Share in post-acquisition or revenue profits of Meva Ltd. 160 560 1,660 2,560 Less: Unrealized profit - 20 Closing Balance 1,660 2,540 9. Computation of bonus to equity shareholders ₹ in lakhs Shares as on 31 March 2025 including bonus share issued on 1 Nov. 2024 4,000 Or we can say these are 1 + 1/3 or 4/3 i.e. Shares before bonus issue should have been (4,000/4) x 3 = 3,000 Accordingly, bonus issue would be (4,000-3,000) 1,000