Financial Reporting - May 2018 MTP

Equity Investments Ltd., wants to re-classify its investments in accordance with AS 13. (i) Long term investments in Company A, costing ` 17 lakhs are to be re-classified as current. The company had reduced the value of these investments to `13 lakhs to recognize a permanent decline in value. The fair value on date of transfer is `13.6 lakhs. (ii) Long term investments in Company B, costing ` 14 lakhs are to be re-classified as current. The fair value on…

Ltd. and CD Ltd. two private companies, decide to amalgamate their business into a new holding company EF Ltd., which was incorporated on 1st August, 2017 with an authorised capital of ` 40,00,000 in equity shares of ` 10 each. The new company plans to commence operations on 1 st October, 2017. From the information given below, and assuming that all transactions are completed by 31st March, 2018, you are required to: (a) Prepare Projected Statement of Profit & Loss…

Following are the summarized Balance Sheets of A Ltd., B. Ltd. & C Ltd., as on 31.3.201 8: Liabilities A Ltd. B Ltd. 5,00,000 3,00,000 80,000 60,000 50,000 24,000 Shares in Profit & Loss A/c 1,00,000 80,000 60,000 B Ltd. Sundry Creditors B Ltd. Balance 70,000 20,000 30,000 6,000 40,000 C Ltd. C Ltd. Balance 1,20,000 Share capital of ` 10 each General Reserves C Ltd. Assets A Ltd. B Ltd. C Ltd. 2,00,000 1,50,000 1,20,000 2,00,000 Fixed Assets Investment…

(a) You are provided with the following details in respect of ABC Limited: (i) 10,000 equity shares of nominal value of ` 10 each were issued on 31 st March, 2014; (ii) Exercise price of equity shares granted under ESOP was ` 160 per share; (iii) Market price of share was ` 400 each on the date of the grant; (iv) Vesting of shares was in the ratio of 30%, 60% and 100% after 1 year, 2 year and 3…

Following is the Balance Sheet of Suvarn Ltd. as on 31 st March, 2018: Liabilities ` Assets 5,00,000 Building 3,50,000 2,50,000 Plant and Machinery 4,30,000 Profit & Loss A/c 2,20,000 Patents 15% Debentures 1,20,000 Sundry debtors 2,00,000 General Reserve 1,80,000 Stock in trade 2,90,000 Creditors 1,50,000 Cash at Bank 70,000 50,000 Equity shares of ` 10 each 2,500, 12% ` 100 each Preference shares 80,000 14,20,000 14,20,000 Buildings & Plant and Machinery were acquired many years ago and should be…

(a) Atul Ltd., has been successful jewellers for the past 100 years and sales are against cash only. The company diversified into apparels. A young senior executive was put in charge of Apparels business and sales increased 5 times. One of the conditions for sales is that dealers can return the unsold stocks within one month of the end of season. Sales return for the year was 25% of sales. Suggest a suitable Revenue Recognition Policy, with reference to AS…

The summarised Balance Sheet of Dhiraj Ltd. as on 31 st March, 2018 is as under: Liabilities (Rs. in Assets lakhs) (Rs. in lakhs) Equity shares of Rs. 10 each 6,000 Patents 1,488 Reserves (including provision for taxation of Rs. 600 lakhs) Premises and Land at cost 2,000 Plant and Machinery Profit & Loss A/c: 6,000 Motor vehicles Balance from previous year 64 (purchased on 1.10.2017) Profit for the year (after taxation) 800 2,200 2,264 Raw materials at cost 80…