Holding Company Accounts - Case Study Problem

1. Dr.G.KARTHIKEYAN
Assistant Professor of Commerce
(Former Controller of Examinations)
A.V.C.College (Autonomous)
Mannampandal – 609 305
Mayiladuthurai
Holding Company Accounts – Case Study
Problem

2. GK Ltd acquired 75% of shares of GP Ltd on 31st July, 2015 at cost Rs.2,80,000. On 31st March, 2016 the balance
sheets of GK Ltd and its subsidiary GP Ltd shows the following balances: In GK Ltd Share Capital Rs.8,00,000,
General Reserve Rs.1,50,000, Profit and Loss Account Rs.90,000, Creditors Rs.1,20,000, Fixed Assets Rs.5,50,000,
Stock 1,05,000 and other current assets Rs.2,25,000. In GP Ltd Share Capital Rs.2,00,000, General Reserve
Rs.70,000, Profit and Loss Account Rs.55,000, Creditors Rs.80,000, Fixed Assets Rs.1,00,000, Stock 1,77,000 and
other current assets Rs.1,28,000. Further GP Ltd earned profit of Rs.45,000 for the year ended 31st March,2016. In
January 2016 GP Ltd sold to GK Ltd goods costing Rs.15,000 for Rs.20,000. On 31st March, 2016 half of these goods
were lying as unsold in the godown of GK Ltd.
Analyze the above case and answer the following questions:
a. What was the GK Ltd share of revenue profit?
b. What was the Minority share of capital profit?
c. What was the Minority Interest?
d. What should be the provision for unrealized profit in stock?
Holding Company Accounts – Case Study Problem

6. Thank You