Financial Reporting - May 2022

The draft Balance Sheet of JAY Ltd. and KAY Ltd. as at 315' March 2021 is given below: PARTICULARS JAY Limited | KAY Limited (@in lakh) (@in lakh) ASSETS NON-CURRENT ASSETS Property, Plant & Equipment 400 500 Investments 450 120 CURRENT ASSETS Inventories 180 130 Financial Assets - _ Trade Receivables 520 270 - Cash & Cash Equivalents 260 145 - Others 350 _175 TOTAL 2,160 1,340 EQUITY AND LIABILITIES EQUITY Share Capital - JAY Limited: Equity Shares of ₹10…

(a) PK Ltd. has a net worth of ₹450 crore. It manufactures bathroom accessories. The sales of the company are affected due to low demand. The company has provided following information: Particulars Amount (7 in crore) for year ended 31.3.2022 | 31.3.2021 | 31.3.2020 | 31.3.2019 Net Profit 3.50 7.75 4.25 4.00 Sales (Turnover) 600.00 850.00 700.00 710.00 During the financial year 2021-2022, PK Ltd. decided that on sale of certain selected items of bathroom accessories @ ? 0.50 paisa…

1% April, 2021, the fair value of the assets of Raj Ltd.'s defined benefit plan were valued at # 20,40,000 and the present value of the defined obligation was ₹21,25,000. On 31s! March, 2022, the plan received contributions from Raj Ltd. amounting to ? 4,75,000 and paid out benefits of ₹2,65,000. The current service cost for the financial year ending 31% March, 2022 is ₹5,10,000. An interest rate of 5% per annum is to be applied to the plan assets…

X Ltd. issues ₹1.5 crore convertible bonds on 1% April, 2018. The bonds have a life of 8 years and a face value of 10 each and offer interest @ 5.5% p.a. payable at the end of each financial year. Bonds are issued at their face value and each bond can be converted into one ordinary share of X Ltd. at any time in the next eight years. Companies of a similar risk profile have recently issued debt with similar…

(a) Shagun Ltd. received two different grants from State Government as per details below: (i) A cash grant of % 24 lakh was received on 31s! March, 2020 towards the skill development of employees over a period of 18 months, starting from 15 April, 2020. Actual costs of the skill development program in financial year 2020-2021 was 7 30 lakh and in financial year 2021-2022 was @ 20 lakh. State, how this grant should be accounted for in the books…

Shravan Ltd. owns 6,800 ordinary shares in PQR Ltd., an unquoted company. PQR Ltd. has a total share capital of 2,00,000 shares with nominal value of 10. PQR Ltd.’s after tax maintainable profits are estimated at @ 28,00,000 per year. An appropriate price/earnings ratio determined from published industry data is 12 (before lack of marketability adjustment). Shravan Ltd.'s management estimates that the discount for the lack of marketability of PQR Ltd.'s shares and restrictions on their transfer is 18%. Shravan…