Question:

Following Information relates to Paracha Limited:

Information relating to a cruise:

* PL brought a cruise ship on 1 April 2018. After completing all the required formalities, the ship
was ready to sail on 1 May 2018.
* Details regarding components of the ship are as under:

Cost Estimated
Components Useful Life
Rs.in RV Rs.in
Engine 900 55,000 hours 40
Body 575 20 years 45
Dry-docking 75 5 years -

* On 1 June 2019, the ship suffered an accident which damaged its body. Repair work took 3
months and costed Rs. 32 million. The repair work did not change useful life and residual values

* The average monthly sailing of the ship during the last three years are as under:

Years Hours
2018 370
2019 500
2020 650

* The revalued amounts of the ship as at 31 December 2019 and 2020 were determined
as Rs. 1,400 million and Rs. 1,000 million respectively. Revalued amounts are apportioned
between the components on the basis of their book values before the revaluation.

Information relating to a Building:

On 1 July 2020, Paracha Limited decide to lease out the old Head office building to AN Limited.
The Bulding was leased out on 1 August 2020 Building was acquired at a price of Rs. 45 Million
on 30 June 2018, the depreciation rate is 12% and the residual value is 5 Million.The fair value of
Building at different Dates are as under:

Date Fair Value

31-Dec-18 50
31-Dec-19 36
1-Jul-20 42
1-Aug-20 40
31-Dec-20 45

Information relating to a Building:

On 30 March 2020 the company decided to move his head office in the Building which was
rented out to the SL since the many years. The building was vacated by SL on 1 May 2020. The
office was occupied by Anna limited on 30 May 2020.The building was purchased on 31 March
2016.The details of the fair value are:
Remaining Useful life of the Building is 8 Years.

Date Fair Value

1-Jan-20 32M
30-Mar-20 30M
1-May-20 28M
30-May-20 30M
31-Dec-20 35M

PL uses revaluation model for subsequent measurement. PL accounts for revaluation on

net replacement value method and transfers the maximum possible amount from the revaluation
surplus to retained earnings on an annual basis.

Required:
Prepare Balance sheet and PNL Extracts at 31 December 2020.