Here is a compilation of top nine problems on holding companies with its relevant solutions. Problem 1 (Wholly Owned Subsidiary): Note: Investment which is made by the Holding Company in the form of shares of subsidiary company is replaced by the subsidiary company's assets and liabilities. Problem 2 (Goodwill): The following are the Balance Sheet of H and S as [...]
In this article we will discuss about the Dividend from Subsidiary Company Pre-acquisition and Post Acquisition Profits along with Solved Illustrations. Dividend received by the holding company from its subsidiary out of pre-acquisition profits is treated as capital receipt; the journal entry for its record being as follows:— Dividend received from the subsidiary company out of pre-acquisition profits. Its effect [...]
In this article we will discuss about the Holding Companies:- 1. Definition of Holding Companies 2. Advantages of Holding Companies 3. Disadvantages of Holding Companies. Definition of Holding Companies: A holding company is a company which controls another company known as subsidiary company by owning its majority of the shares carrying voting rights or controlling the composition of its board [...]