Financial Reporting - November 2015 MTP

(a) Cost of a machine acquired on 01.04.2011 was Rs. 5,00,000. The machine is expected to realize Rs. 50,000 at the end of its working life of 10 years. Straight-line depreciation of Rs. 45,000 per year has been charged upto 2013-2014. For and from 2014-15, the company switched over to 15% p.a. reducing balance method of depreciation in respect of the machine. The new rate of depreciation is based on revised useful life of 15 years. The new rate shall…

On the basis of the following information, calculate the value of goodwill of Worth Ltd. at three years’ purchase of super profits, if any, earned by the company in the previous four completed accounting years. Draft Balance Sheet of Gee Ltd. as at 31st March, 2015 Liabilities Rs.in Assets lakhs Rs. in lakhs Share Capital: Goodwill 310 Authorised 7,500 Land and Buildings 1,850 Machinery 3,760 Issued and Subscribed 5 crore equity shares of Rs. 10 each, fully paid up Capital…

The summarised Balance Sheets of R Ltd. and P Ltd. for the year ending on 31.3.2014 are as under: R Ltd. P Ltd. R Ltd. P Ltd. Rs. Rs. Rs. Rs. 55,00,000 25,00,000 27,00,000 23,00,000 Equity share Capital (in shares of Rs. 10 each) 24,00,000 12,00,000 Fixed Assets Current Assets 8% Preference Share Capital (in shares of Rs. 10 each) 8,00,000 10% Preference Share Capital (in shares of Rs. 10 each) 4,00,000 Reserves 30,00,000 24,00,000 Current Liabilities 18,00,000 10,00,000 ________…

(a) Prepare a value added statement for the year ended on 31.03.2015 and reconciliation of total value added with profit before taxation, from the profit and loss account of Heaven Ltd. for the year ended on 31-03-2015. Income: (Rs. in lakhs) Sales Other income Total 254.00 6.00 260.00 Expenditure: Operating cost Excise duty 222.00 11.20 Interest on bank overdraft 1.00 Interest on 9% debentures 15.00 249.20 Profit before depreciation 10.80 Depreciation 4.10 Profit before tax 6.70 Provision for tax (2.40)…

1st April, 2014, a company offered 100 shares to each of its 500 employees at Rs. 50 per share. The employees are given a month to decide whether or not to accept the offer. The shares issued under the plan (ESPP) shall be subject to lockin on transfers for three years from grant date. The market price of shares of the company on the grant date is Rs. 60 per share. Due to post-vesting restrictions on transfer, the fair value…

Aman Limited purchased 48,000 shares in Shanti Limited on 31st March 2013, at 50% premium over face value by issue of 8% Debentures at 20% premium. The Balance Sheets of Aman Limited and Shanti Limited as on 31-03-2013, i.e., on the date of purchase were as under: (in Rs.) Liabilities Ltd. Share capital of Rs. 10 10,50,000 Shanti Assets Ltd. 6,00,000 Fixed Assets Ltd. Shanti Ltd. 6,50,000 2,00,000 General Reserve 1,20,000 40,000 Inventory in Trade 3,00,000 1,80,000 Profit and Loss…

A Company follows April to March as its financial year. The Company recognizes cheques dated 31st March or before, received from customers after balance sheet date, but before approval of financial statement by debiting ‘Cheques in hand account’ and crediting ‘Debtors account’. The ‘cheques in hand’ is shown in the Balance Sheet as an item of cash and cash equivalents. All cheques in hand are presented to bank in the month of April and are also realised in the same…