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