Glamour Ltd. and its subsidiary Fashion Ltd. has provided you the following information for the year ended 31st March, 2026: Particulars Glamour…

CA Intermediate · Advanced Accounting · PYQS · May 2026
Glamour Ltd. and its subsidiary Fashion Ltd. has provided you the following information for the year ended 31st March, 2026: Particulars Glamour Ltd. in '000 Fashion Ltd. in '000 Equity share capital 1,000 750 Sales and other operating revenue 4,500 2,800 Inventory as on 1.04.2025 545 390 Inventory as on 31.03.2026 750 615 Dividend income 125 80 Raw materials consumed 1,550 940 Production expenses 710 680 Administrative expenses 314 129 Selling & Distribution expenses 285 230 Interest expenses 150 95 Depreciation 70 45 Wages & salaries 880 740 Loss on sale of investment - 35 Other non-operating income 74 22 Other information: (i) On 1st April, 2024 Glamour Ltd. acquired 6,000 equity shares of 100 each fully paid up in Fashion Ltd. (ii) Fashion Ltd. paid a dividend of 12% for the year ended 31st March, 2025, the same was correctly accounted for by Glamour Ltd. (iii) Glamour Ltd. purchased goods worth - 5,00,000 (Invoice Price) from Fashion Ltd. at a profit of 25% on cost. 50% of these goods are still in stock of Glamour Ltd. (iv) Selling & Distribution expenses of Fashion Ltd. includes - 45,000 paid to Glamour Ltd. as brokerage fees. (v) Administrative expenses of Glamour Ltd. include - 65,000 paid to Fashion Ltd. as consultancy fees. (vi) Consultancy fees and brokerage fee is to be considered as operating revenues. You are required to prepare consolidated Profit and Loss Account of Glamour Ltd. and its subsidiary Fashion Ltd. for the year ended 31st March, 2026 as per Schedule III of the Companies Act, 2013.

Suggested Answer and Working Notes:

Consolidated statement of profit and loss of Glamour Ltd. and its subsidiary Fashion Ltd for the year ended on 31st March, 2026 Particulars Note No. (in 000) Revenue from operations 1 6,690 Other Income 2 194 Total revenue (I) 6,884 Expenses: Cost of material purchased/consumed 3 3,380 Changes (Increase) in inventories of finished goods 4 (380) Employee benefit expense 5 1,620 Finance cost 6 245 Depreciation and amortization expense 7 115 Other expenses 8 848 Total expenses (II) 5,828 Profit before tax (I-II) 1,056 Notes to Accounts (in 000) (in 000) 1. Revenue from operations Sales and other operating revenues Glamour Ltd. 4,500 Fashion Ltd. 2,800 7,300 Less: Inter-company sales (5,00) Consultancy fees received by Fashion Limited from Glamour Ltd. (65) Brokage received by Glamour Ltd. from Fashion Ltd (45) 6,690 2. Other Income Dividend income: Glamour Ltd. 125 Fashion Ltd 80 Sub-Total: 205 Less: Dividend realized from Fashion Ltd. (6,00,000 x 12%) (72) 133 Other Non-operating Income Glamour Ltd. 74 Fashion Ltd. 22 Sub Total: 96 Less: Loss on sale of investments Fashion Ltd (35) 61 194 3. Cost of material purchased/consumed Glamour Ltd. 1,550 Fashion Ltd. 940 Less: Inter company purchase (500) 1,990 Direct expenses (Production) Glamour Ltd. 710 Fashion Ltd. 680 1,390 3,380 4. Changes (Increase) in inventories of finished goods Glamour Ltd. (750-545) (205) Fashion Ltd. (615-390) (225) (430) Less: Unrealized profits 2,00,000 × 25% 50 (380) 5. Employee benefits and expenses Wages and salaries: Glamour Ltd. 880 Fashion Ltd. 740 1,620 6. Finance cost Interest: Glamour Ltd. 150 Fashion Ltd. 95 245 7. Depreciation Glamour Ltd. 70 Fashion Ltd. 45 115 8. Other expenses Administrative expenses: Glamour Ltd. 314 Fashion Ltd. 129 443 Less: Consultancy fees received by Fashion Ltd from Glamour Ltd. (65) 378 Selling and distribution Expenses: Glamour Ltd. 285 Fashion Ltd. 230 515 Less: Brokerage received by Glamour Ltd. from Fashion Ltd. (45) 470 848

Topics: AS 21

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