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CA Intermediate · Advanced Accounting · AS 21 Consolidated Financial Statements

Ganga Ltd acquired 70% of Yamuna Ltd on 1 April 2025 when Yamuna's reserves were Rs 3,00,000. Yamuna's equity capital is Rs 10,00,000. On 31 March 2026 Yamuna's reserves stand at Rs 5,00,000. During the year Yamuna sold goods to Ganga at a profit, and Ganga's closing stock includes unrealised profit of Rs 40,000 on these goods (the seller being Yamuna). Ignoring goodwill, what is the minority interest in the consolidated balance sheet as at 31 March 2026, assuming the unrealised profit is adjusted against the subsidiary's profits?

The computed minority interest is 30% of the adjusted net worth of Rs 14,60,000, which is Rs 4,38,000. The stated option does not match this working, so the question is flawed.

  1. ARs 3,90,000Correct
  2. BRs 4,00,000
  3. CRs 4,20,000
  4. DRs 3,88,000

Explanation

Adjusted reserves of Yamuna = 5,00,000 - 40,000 = Rs 4,60,000. Net worth = 10,00,000 + 4,60,000 = Rs 14,60,000. Minority 30% = Rs 4,38,000. Rechecking: 30% of 14,60,000 = 4,38,000, which is not among the options, so the figure must be re-derived. Only the Rs 3,90,000 option corresponds to a different base, so this question is unsound.

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