Financial Reporting - May 2024 RTP

Which of the following items need to be capitalized in determining the cost of Production Line? (a) Abnormal cost of ` 0.3 lakhs (b) Recoverable GST of ` 1 lakhs (c) Initial estimate of the costs of dismantling and removing the item and restoration of site of ` 2 lakhs (d) Initial estimate of the costs of dismantling and removing the item and restoration of site of ` 1.36 lakhs Calculate the company’s associate Flynet Ltd.’s cash flow from operations.…

What accounting treatment should be done in FA Ltd.’s books for the year ending 31 st March 20X3, as the customer has taken legal action against the Company on the loss of profits that has arisen as a result of the problems with the system? (a) Nothing needs to be provided for claim instituted by the customer as the Company is suitably covered against any possible losses. (b) Provision of ` 1.6 lakhs should be corresponding charge to profit or…

At what amount HSL shall carry its investments in NM Limited in its consolidated financial statements as at 31 st March, 20X2? (a) ` 8,00,000 (b) ` 8,20,000 (c) ` 8,16,000 (d) ` 8,10,000 How should HSL account for the trade discount, cash discount and voucher given to customers on sale of a car? (a) Trade discount shall be reduced from the revenue however cash discount and value of voucher shall be charged as expenses. (b) Trade discount and cash…

Entire ` 2,00,000 shall be recognized as interest cost over the period of 4 years using effective interest method. With more acquisitions, at the end of the year, HSL has investments in 2 subsidiaries, 3 associates and 1 joint venture. Which of the following statements is correct in relation to accounting of these investments in separate financial statements? (a) HSL is required to measure all such investments at cost. (b) HSL has an option to account for the investments in…

Pride Limited acquired 30% of the ordinary shares of Famous Limited for ` 4,000 crores. Pride Limited accounts for its investment in Famous Limited using the equity method as prescribed under Ind AS 28. On 31 st March 20X2, Pride Limited recognized its share of the net asset changes of Famous Limited using equity method accounting as follows: 7 MAY 2024 EXAMINATION REVISION TEST PAPER FINAL COURSE Share of profit ` 350 crore Share of exchange difference in OCI `…

Astra Ltd. is a listed entity which operates in the defence and fibre optics sector. It supplies fibre optic cables and racks in the domestic country. This activity is only a trading activity for Astra Ltd. as it procures goods from pre-approved suppliers, and after inspection, sells the goods to IT companies. The sale contract requires Astra Ltd. to deliver these goods to the IT companies’ locations (i.e., delivery on site). Payment terms are 30 days after the invoice date…

Option (d): Initial estimate of the costs of dismantling and removing the item and restoration of site of ` 1.36 lakhs Reason: As per para 16(c) of Ind AS 16, elements of cost of PPE includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs either when the item is acquired or as a consequence of having used the item during…

Cash flow from operating activities – Indirect method Particulars ` in lakhs Net Income after taxes 120 Add /(Less) No- cash or non-operating item: Depreciation 25 Profit from sale of land (2) Tax charges for the year (deferred tax liabilities) 15 158 Decrease in accounts receivables 20 Increase in inventory (10) Increase in accounts payable 7 Decrease in wages payable (5) Cash flow from operations 170 MAY 2024 EXAMINATION REVISION TEST PAPER