On April 1, 2010 Gussain Limited (GL) purchased 30% equity shares of George Huss Limited (GHL) at
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On April 1, 2010 Gussain Limited (GL) purchased 30% equity shares of George Huss Limited (GHL) at a cost of ₹1,80,000. The equity of GHL Limited on this date comprised
(a) Equity share capital ₹3,00,000,
(b) Securities premium ₹2,00,000,
(c) Reserve and surplus ₹1,00,000.
During the year 2010–11, GHL earned a net profit of ₹90,000 out of which 50% was distributed as dividend among equity shareholders. Show how GL should account for its investment in GHL.
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Initial recognitioninitial carrying amount Here GL holds 30 equity shares of GHL this evidences that ...View the full answer
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