Consolidate the following balance sheet first equity and liabilities s...
Consolidated Balance Sheet Overview
To consolidate the balance sheet of H Limited and its subsidiary AS Limited, follow these steps:
1. Shareholders' Funds
- Share Capital:
- H Limited: 1,400
- AS Limited: 1,000
- Reserves and Surplus:
- H Limited: 300
- AS Limited: 200
2. Current Liabilities
- Trade Payables:
- H Limited: 2,800
- AS Limited: 350
3. Total Equity and Liabilities
- Combined Total:
- H Limited: 4,200
- AS Limited: 4,800
4. Assets
- Non-Current Assets:
- Fixed Assets:
- H Limited: 3,000
- AS Limited: 4,800
- Non-Current Investments:
- H Limited: 900
- Shares in AS Limited at cost: 1,200
5. Total Assets
- Combined Total:
- H Limited: 4,200
- AS Limited: 4,800
6. Profit and Loss Statement Implications
- When H Limited acquired shares in AS Limited, the profit and loss statement of AS Limited showed a retained earnings balance of 200. This amount will be integrated into the consolidated reserves and surplus when preparing the consolidated balance sheet.
Conclusion
The consolidated balance sheet will reflect the combined financial position of H Limited and AS Limited, ensuring that all interests and investments are accurately represented. This process helps stakeholders understand the financial health of the entire group rather than just individual entities.