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    Question

    H Ltd owns 80% of S Ltd. S Ltd made a profit of ₹10

    lakh this year. There are unrealized profits in closing stock of ₹1 lakh due to inter-company sale. What is group share in consolidated profits?
    A ₹8 lakh Correct Answer Incorrect Answer
    B ₹7.2 lakh Correct Answer Incorrect Answer
    C ₹9 lakh Correct Answer Incorrect Answer
    D ₹10 lakh Correct Answer Incorrect Answer

    Solution

    Unrealized profit = ₹1L ⇒ Reduce group share accordingly Group share = 80% of (₹10L – ₹1L) = ₹7.2L

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