A Ltd. acquired 70% equity shares of B Ltd. @20 per share (Face value -10) on 31st March, 2026 at a cost of 140 lakhs. Calculate the amount of share…

CA Intermediate · Advanced Accounting · MTP · May 2026
A Ltd. acquired 70% equity shares of B Ltd. @20 per share (Face value -10) on 31st March, 2026 at a cost of 140 lakhs. Calculate the amount of share of A Ltd. and minority interest in the net assets of B Ltd. on this date. Also compute goodwill/capital reserve for A Ltd. on acquisition of shares of B Ltd. from the following information available from the balance sheet of B Ltd. as on 31st March, 2026: ₹ in lakhs Property, plant and equipment 360 Investments 90 Current Assets 140 Loans & Advances 30 15% Debentures 180 Current Liabilities 100

Suggested Answer and Working Notes:

Net assets of B Ltd. as on 31st March, 2026 ₹ in lakhs ₹ in lakhs Property, plant and equipment 360 Investments 90 Current Assets 140 Loans and Advances 30 Total Assets 620 Less: 15% Debentures 180.0 Current Liabilities 100.0 (280) Equity / Net Worth 340 Share of Minority Interest: in net assets (30% of 340) 102 A Ltd.'s share in net assets (70% of 340) 238 A Ltd.'s cost of acquisition of shares of B Ltd. (140lakhs) (140) Capital reserve 98

Topics: AS 21

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