Advanced Accounting - Jan Rtp 2026 RTP

1. Gases Ltd. is installing a 2,000 kms long gas pipeline for distribution of gasses (Project is a qualifying asset as per AS 16). For this purpose it borrowed funds for = 700 Lakhs at subsidised rates and has to pay annually an interest of = 70 Lakhs. The Company has also invested unused funds and is earning an income of % 7 Lakhs annually. During the next year the Company used all funds and no income is now being…

2. A dealer in machinery, Shakti Equipments Pvt. Ltd., leased out one of its machines to Delta Tools Ltd. on a 3-year operating lease. The machine was given on equal annual lease rentals, and the dealer intended to earn a 20% profit margin on the cost of the machinery. The cost of the machinery to the dealer was = 3,00,000. The economic life of the machinery is estimated at 5 years, and the total expected output over its useful life…

3. A private limited company manufacturing fancy terry towels had valued its closing inventory of inventories of finished goods at the realisable value, inclusive of profit and the export cash incentives. Firm contracts had been received and goods were packed for export, but the ownership in these goods had not been transferred to the foreign buyers. Comment on the valuation of the inventories by the company. AS 4 “Contingencies and Events Occurring after the Balance Sheet Date”

4. You are the accountant of Zenith Industries Ltd., a company engaged in the manufacture and sale of consumer products across India. The company has its corporate office in Mumbai and an extensive network of stockists and distributors throughout the country. You are preparing the financial statements for the year ended 31% March, 2025. After the close of the financial year, the following significant events and accounting considerations came to light: a. Fire Accident: On 10 April, 2025, a major…

5. The accountant of Beryl Limited has asked you to identify the following items as —- Change in Accounting Policies / Change in Accounting Estimates / Extraordinary Items / Prior period items / Ordinary Activity: (i) | Non- provision for salary already due in earlier year. (ii) | Attachment of the property of the enterprise. (iii) Introduction of new pension scheme for employees. (iv) Change in Reserve for obsolete inventory. (v) Settlement of litigation case. (vi) Legislative changes having long…

6. Best Ltd. is engaged in the business of providing consultancy services. A few days back, it received a notice from GST department raising a demand of GST on consultancy services provided by it for = 2,50,000. 14 JANUARY 2026 EXAMINATION REVISION TEST PAPERS ADVANCED ACCOUNTING Recently Best Ltd. paid the demand. In the books, the payment is recorded as an extraordinary expenditure. Whether payment of tax demand raised by the taxation authority can be recognised as an extraordinary item?…

7. A construction contractor has entered into a fixed-price contract of % 18,000 lacs to construct a bridge within a three-year time frame. The contract specifies the total contract price and includes provisions for variations in work, which may affect revenue and costs during the contract period. The contractor maintains detailed records of costs incurred and estimates of profit to be recognized each year. A summary of the financial data for the contract is as follows (amounts in % lacs)…