Consolidated Financial Statements

Sithara Chachuzzz

H Ltd. acquired the shares of S Ltd. on 1-7-20X1 opening Balance of profit and loss account of S Ltd. on 1-4-20X1 was 30,000(This 30,000 is clearly pre-acquisition profit which is earned by s ltd in previous years, No participation of H Ltd in this earning) 30,000*80%=24,000-----(1st portion) and profit and loss account of S Ltd. on 31-03-20X2 was 40,000 (opening was 30,000 and 10,000 earned this year) 10,000 is earned in 12 months from 1-4-20X1, but H Ltd. acquired the shares of S Ltd. on 1-7-20X1 (this 3 month is also clearly pre-acquisition profit which is earned by s ltd before acquisition, No participation of H Ltd in this earning) so, 3 month profit=10,000*3months/12months =2500 share of S Ltd=2500*80% =2000 So, Total =24,000(calculated earlier)+2000 =26,000

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Thanks a lit