Question
Parent Ltd. acquires 75% of Subsidiary Ltd. on 1 July
2024. Subsidiary’s profit for the year ended 31 March 2025 is ₹16,00,000, earned evenly. Calculate pre-acquisition and post-acquisition profits and the parent’s share in post-acquisition profits.Solution
• Pre-acquisition: 3 months (Apr–Jun) = 3/12 × 16L = ₹4L. • Post-acquisition: ₹12L. • Parent’s share = 75% × ₹12L = ₹9L.
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