Financial Reporting - November 2020

Flywing Airways Ltd is a company which manufactures aircraft parts and engines and sells them to large multinational companies like Boeing and Airbus Industries. On 1 April 20X1, the company began the construction of a new production line in its aircraft parts manufacturing shed. Costs relating to the production line are as follows: Details Amount Rs.'000 Costs of the basic materials (list price Rs.12.5 million less a 20% trade discount) 10,000 Recoverable goods and services taxes incurred not included in…

2. (a) During the year ended 31st March,20X2, Blue Ocean group changed its accounting policy for depreciating property, plant and equipment, so as to apply components approach fully, whilst at the same time adopting the revaluation model. In years before 20X1-20X2, Blue Ocean group’s asset records were not sufficiently detailed to apply a components approach fully. At the end of 31st March, 20X1, management commissioned an engineering survey, which provided information on the components held and their fair values, useful…

(a) Entity A acquired a subsidiary, entity B, during the year. Summarised information from the consolidated statement of profit and loss and balance sheet is provided, together with some supplementary information. Consolidated statement of profit and loss Amount(Rs.) Revenue 3,80,000 Cost of sales 2,20,000 Gross profit 1,60,000 Depreciation (30,000) Other operating expenses (56,000) Interest cost ‘4,000 Profit before taxation 70,000 Taxation 15,000) Profit after taxation 55,000 Consolidated balance sheet 20X2 20X1 Amount(Rs.) | Amount(Rs.) Assets Cash and cash equivalents 8,000…

(a) Company EFG enters into a property lease with Entity H. The initial term of the lease is 10 years with a 5- year renewal option. The economic life of the property is 40 years and the fair value of the leased property is Rs.50 Lacs. Company EFG has an option to purchase the property at the end of the lease term for Rs.30 lacs. Lease is paid at the beginning of the year. The first annual payment is Rs.5…

Consolidated Balance Sheet as on 31st March, 20X2 of a group of companies comprising P Limited, S Limited and SS Limited. Their balance sheets on that date are given below: Rs.in lakhs P Ltd. SLtd.| SS Ltd. Assets Non-Current Assets Property, Plant and Equipment 320 360 Investment : 32 lakhs shares in S Ltd. 340 24 lakhs shares in SS Ltd. 280 Current Assets Inventories 220 70 50 Financial Assets Trade Receivables 260 100 220 Bills Receivable 72 - 30…

1 April 20X1, the fair value of the assets of XYZ Ltd’s defined benefit plan were valued at Rs.20,40,000 and the present value of the defined obligation was Rs.21,25,000. On 31s'March,20X2 the plan received contributions from XYZ Ltd amounting to Rs. 4,25,000 and paid out benefits of Rs. 2,55,000. The current service cost for the financial year ending 31 March 20X2 is Rs. 5,10,000. An interest rate of 5% is to be applied to the plan assets and obligations. The…