Prepare Working Paper and consolidated balance sheet of Parent and Subsidiary Company for purchase of 70% shares of company B and also prepare Working Paper and consolidated balance sheet of Parent and Subsidiary Company if company A purchases 100% shares of company B. Company A acquired 70% shares of Company B at book value for Rs 196 (m) on January 1,2019. The balance sheets of both the companies after acquisition are as follows:Co. ACo. B(RS in thousand)Assets:(Rs in thousand)Investment in Co. BOther Assets196,000654,000850,000410,000410,000Total AssetsLiabilities & Stockholders' equityTotal Liabilities (current + long term)Capital StockAdditional paid in capital (share premium)Retained earningsTotal Liabilities & Stockholders' equity190,000400,000150.000110,000850,000130,000150,00075,00055,000410,000

Step 1 Consolidated balance sheet is the group balance sheet of holding and subsidiary.

Answered: Prepare Working Paper and consolidated…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Prepare Working Paper and consolidated balance sheet of Parent and Subsidiary Company for purchase of 70% shares of company B and also prepare Working Paper and consolidated balance sheet of Parent and Subsidiary Company if company A purchases 100% shares of company B.

Company A acquired 70% shares of Company B at book value for Rs 196 (m) on January 1,
2019. The balance sheets of both the companies after acquisition are as follows:
Co. A
Co. B
(RS in thousand)
Assets:
(Rs in thousand)
Investment in Co. B
Other Assets
196,000
654,000
850,000
410,000
410,000
Total Assets
Liabilities & Stockholders' equity
Total Liabilities (current + long term)
Capital Stock
Additional paid in capital (share premium)
Retained earnings
Total Liabilities & Stockholders' equity
190,000
400,000
150.000
110,000
850,000
130,000
150,000
75,000
55,000
410,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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