Financial Reporting - May 2023 RTP

An entity has following details regarding cost and retail price of the goods purchased and unsold at the beginning of the year: Retail Price Opening inventory 6,250 8,000 Purchases 19,500 34,000 Inventory on hand (23,000) Sales for the period 19,000 Applying the retail method, compute the following: (a) Percentage of cost price over retail price; (b) Cost of closing inventory; (c) Value of cost of sales (at cost); and (d) Profit earned during the year on sale of inventory Ignore…

From the following particulars, compute the net defined benefit liability and expense to be recognized in Profit and Loss account. (` in lakhs) Particulars Defined benefit obligation Plan Assets 31st Dec. 20X2 31st Dec. 20X1 Balance at the beginning of the year 63.25 47.08 21.80 14.65 Current service cost 5.84 4.97 Interest cost 4.27 3.56 Changes in demographic assumptions 0.62 1.86 Changes in financial assumptions 3.58 1.93 - 31st Dec. 31st Dec. 20X2 20X1 10 Experience variance (2.49) 4.46 Benefits…

Entity A runs a copper-mining business. Entity A has a year-end of 31 st March. Dividends declared on the shares accrue to the employees during the three -year period. If the condition is met, the employees will receive the shares together with the dividends that have been declared on those shares during the three years upto 31st March, 20X3. The entity estimates that on 1 st April, 20X0 its shares are valued at ` 10 each. The grant date fair…

ABC Ltd., a public limited company, is in the business of exploration and production of oil and gas and other hydrocarbon related activities outside India. It operates overseas projects directly and/or through subsidiaries, by participation in various joint arrangements and investment in associates. The company was following Accounting Standards as notified under the Companies (Accounting Standards) Rules until 31st March, 20X1. However, it has adopted Indian Accounting Standards (Ind AS) with effect from 1 st April, 20X1. PAPER – 1…

LT Ltd. is in the process of constructing a building. The construction process is expected to take about 18 months from 1 st January 20X1 to 30 th June 20X2. The building meets the definition of a qualifying asset. LT Ltd. incurs the following expenditure for the construction: 1 st January, 20X1 ` 5 crores 30th June, 20X1 ` 20 crores 31st March, 20X2 ` 20 crores 30th June, 20X2 ` 5 crores 12 On 1 st July 20X1, LT…

Company X enters into an agreement on 1 st January, 20X1 with a customer for renovation of hospital and install new air-conditioners for total consideration of ` 50,00,000. The promised renovation service, including the installation of new air conditioners is a single performance obligation satisfied over time. Total expected costs are ` 40,00,000 including ` 10,00,000 for the air-conditioners. Company X determines that it acts as a principal in accordance with Ind AS 115 because it obtains control of the…

Company X built a new plant that was brought into use on 1 st April, 20X1. The cost to construct the plant was ` 1.5 crore. The estimated useful life of the plant is 20 years and Company X accounts for the plant using the cost model. The initial carrying amount of the plant included an amount of ` 10 lakh for decommissioning, which was determined using a discount rate of 10%. On 31st March, 20X2, Company X remeasures the…

A Ltd. received a government grant of ` 10,00,000 to defray expenses for environmental protection. Expected environmental costs to be incurred is ` 3,00,000 per annum for the next 5 years. How should A Ltd. present such grant related to income in its financial statements? Ind AS 116