Professional Documents
Culture Documents
1.The nature of the examination is described in the ________ paragraph of the audit report.
2. The responsibilities of management and the auditors with respect to the financial
statements are described in the _____________ paragraph of the audit report.
3.An audit report, in a separate paragraph following the opinion paragraph, described the
impact of related party transactions that have been properly reflected and disclosed in the
financial statements. This form of report illustrates ___________.
4. Monetary values of the reputation, connections and profit earning capacity a firm._______
5. An asset which is not fictitious but intangible in nature, having realisable value________.
9.Excess of average profit earned by the firm over and above its normal profit___________.
14. In the case of an exchange of assets, if the acquired asset cannot be valued______
1. Average capital employed in M/s. X Ltd. Is Rs. 30,00,000 whereas net trading profits for
the last three years have been rs. 14,60,000 Rs. 14,45,000 and rs. 15,20,000. In these three
years , a manager was paid a salary of Rs. 5,000 p.m. but now he would be paid a salary of
Rs. 7,500 per month. Normal rate of return expected in the industry in which M/s. X ltd. Is
engaged is 20%. Calculate goodwill on the basis of two years purchase of the super profits.
5. calculate goodwill if a company earns a net profit of Rs. 12000 with a capital of Rs.
60,000. The normal rate of return in the business is 10%. Use capitalization of super profits
method to value the goodwill.
6. A company earns profits of Rs. 2,00,000. The NRR in the similar type of business is 10%.
The value of total assets (excluding goodwill) and total outside liabilities as on the date of
valuation of goodwill are Rs. 22,00,000 and 5,60,000 respectively. Calculate the value of
goodwill according to capitalization of super profit method.
7. Bills payable of B ltd. Includes Rs. 4,000 issued to A Ltd. Which the company discounted
for Rs. 1,000. In the consolidated balance sheet what will be the effect.
8.on January 1, 2010, P Ltd. Acquired 80% of S Ltd.’s 2,00,000 equity shares for Rs.
50,00,000. During 2010 S ltd. Reported net income of Rs. 5,50,000 and paid dividends of rs.
1,65,000. What is the minority interest ?
9. H ltd. With 80% shares of S Ltd. Supplied goods to s Ltd. For Rs. 50,000 with a profit of
10% on sale. 40% of the goods are still in the stock of s Ltd. The unrealized profit on stock
is?
10. H ltd acquired 60% shares of s Ltd. On January 1 ,2007 at a price of Rs. 3,00000. The
profit and loss account showed a debit balance of Rs. 1,00,000 on April 1, 2009 and credit
balance of Rs. 50,000 as on March 31, 2010. The capital profit of H Ltd. is?