Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

On 1april2014, company A recently acquired 75% of the equity shares of company B. Company B had total shares outstanding of 100,000 of a

 

On 1april2014, company A recently acquired 75% of the equity shares of company B. Company B had total shares outstanding of 100,000 of a face value of Rs. 10. It had also issued convertible debentures, Company B had issued 20,000 such debentures and each debenture was convertible into 2.5 equity shares of a face value of Rs. 10. The debentures were convertible into equity shares before any company acquired a majority stake in company B. Further, company B had made profits of INR 10 crores in the financial year ended 31 March 2014, which represented only 5% of its total reserves on the b/s as on April 1,2014. Company A's outstanding and paid up share capital was INR 200 crores and it's reserves and surplus were INR 500 crore. Company A acquired company B by paying a consideration of INR 450 crore. using the above information, please calculate: A. Goodwill on consolidation B. Minority Interest C. company A's share in consolidated profits D. Minority share in consolidated profits.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

1 Outstanding number of shares of Company B100000 2 Converti... blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Accounting

Authors: Gail Fayerman

1st Canadian Edition

9781118774113, 1118774116, 111803791X, 978-1118037911

More Books

Students explore these related Accounting questions