Illustration Questions Q.1 Parent Ltd and Son Ltd have been operating in Ghana for many years. On 1st April 2011, Parent Ltd acquired 80% of the entire shareholding of Son Ltd from a strategic investor, thereby making Son Ltd a subsidiary of Parent Ltd. The net worth of son Ltd as at 31st December 2010 is shown below: Stated capital Capital surplus Income surplus GHS 30,000 12,000 45,000 87,000 The balance sheets of these two companies as at 31st December 2011 are as follows: Parent Ltd GHS Non-current assets Property Plant and Equipment 96,000 Son Ltd GHS 90,000 Investment in shares of Son Ltd 150,000 Current Assets Inventory 90,000 75,000 Receivables 105,000 45,000 Bank and cash 60,000 9,000 501,000 219,000 Financed by: Stated capital 300,000 30,000 Capital surplus 21,000 12,000 Retained earnings 120,000 117,000 441,000 159,000