Financial Reporting - January 2026

(a) Zebra Limited is considering to grant an interest free loan of ₹ 25,00,000 to 10 its wholly owned Indian subsidiary company, Camel Limited. No transaction cost is attached with this loan. With respect to other terms and conditions, the following alternate options are being considered : ¢ Option 1 : The loan is interest free and is repayable on demand; ¢ Option 2 : The loan is interest free and is repayable in a single bullet payment after 4…

Kagaz Limited, Chennai purchased a modern offset manufacturing machine 8 from a supplier at Mumbai for ₹20.00 lakhs being Maximum Retail Price (MRP) on the following terms and conditions : e The supplier would buy-back the existing machine of Kagaz Limited. The carrying value of the existing machine is % 6.60 lakhs. ¢ The supplier would give a special discount of 5%; | e Acash payment of % 15 lakhs would be made by Kagaz Limited to the supplier; e…

(a) U Limited had purchased a production plant for ₹9.00 lakhs on 1 April 6 2022. The useful life of the plant is 9 years and is depreciated on straight line method with Nil residual value. On 1 April 2024, U Limited temporarily stops using the production plant as demand had declined. However, the plant is maintained in a workable condition and it will be used in future when demand picks up. The accountant of U Limited decided to treat…

(a) Grant Limited enters into a contract with a customer to sell a machinery. 5 | The machinery is transferred to the customer when the contract is signed. The price as per the contract .is ₹10,00 lakhs plus contractual rate of interest at 8% per annum, payable in 5 annual equal instalments of | = 2,50,438 each. No down payment is envisaged for the sale. Grant Limited avails loan @ 10% per annum from its banker for similar back-to-back transactions.…

You, a Chartered Accountant, have recently been appointed as the new 5 1 Chief Financial Officer (CFO) at Digitization Solutions Limited, a listed company in the hardware distribution sector. While reviewing the financial t statements for the financial year 2024-25, before submitting the same for audit, you identify the following issues : Issue 1 : Channel Stuffing and Premature Revenue Recognition e Products worth & 18 crores were shipped to distributors on March 30, 2025, but there were no confirmed…