ST. JOSEPH’ "> ieee $ COLLEGE OF COMMERCE ND SEMESTER EXAMINATION oe ~OcTo} B.COM (Regular) -V SemEsreR men ea 15 MC 503: FINANCIAL RI sean tours EPORTING SECTION. 4 as ) Answer any TEN questions. Each carries 1 mark ark, Give any two objectives of Accounting Stand; (Gere) andard. What are the various Elements of Financial St Define Biological Transformation. ommeole Name two types of Government Grants, State the point of time at which thy capitalised. Yeenes the borrowing costs can no longer be 6. Name the recognition criteria for Proper 7. Why internally generated goodwill Aurel tee jie 8, How a” Person” is recognized as a Related rae 9. _ List THREE conditions a Provision must meet to be 10. Whois a Key Management Personnel? recognised. 11, What do you mean by Interim Financial Reports? 12. Define Bearer Plants. : SECTION -B Tl) Answer any THREE questions. Each carries 6 marks. {3x6-18) 43. Briefly explain the Conceptual Framework for Financial Reporting. 14. What are the various functions of Accounting Standard Board? 15. Sunny Ltd. Is developing a new production process. During Year 1 ( financial any has incurred total expenditure of Rs.40 lakhs on the year), the Comp: process. On Ist February, the process has met the norms 0 be recognized as" Intangible Assets”, and the expenditure incurred till that date is Rs.16 lakhs. During Year 2 ( next financial year) the Company has further incurred Rs.70 lakhs. The Recoverable Amount of the process al the end of Year 2 is estimated to be Rs.62 lakhs. Compute: a. Expenditure to be charged to (Ignore depreciation) b. Carrying Amount of the I P & Lac for the two financial years e end of both ntangible Assets a5 at th (+3) f each month. Financial Years. . ) 16. What do you mean by Provision? Differentiate Provision and Contingent Liability with an example. «entry of Suge in band 5 17, R Ltd, Is leading distributor of Sugar, A detail inventory DT 0 gar a tent taken when the books are closed at the end of month, the following information isav Sales - Rs.23,62,500, General overheads © beginning - 50,000 Kgs at Rs.15 per Kg page tof 4 ginning ilable: ailable: gt ~ Rs.62,500, Inventory atPurch ASS ¢ a, fy ©. Closing 1.7 2u8 } = One Lakh x, 1g Inver kh Kgs e 000 Compute ey 65,000 kgs 85 at Rs.14.25 b. June 30 - 50,000 Kgs ay W845 followi Value of Inver ney tHe FIFO as per IndAS 2: . Amount of Cos on tune 30 © Profit / Loss fer oe oods sold “i for the month of June Qa N) Answer any two SECTION-C 18. What is tag _eestions, Each carries 15 marks. (2x15=39) by TASB, oo? Explain the structure of IASB and the standard setting prope, 19 Aha om, Aga, oma Ses ie following estimates of Cash Flows Feloting 10 a Figg Fweton 31.3.2017. the Discount Rate is 13%. i {ear ending Bist March [3018] 2019] 2020__[ 2021 _[ 20235 (Cash ish flow (Rs. In lakhs) [4,000 16,000 | 6.000_|8,000 | 4.000 |) feaidual Value as on 313.2022 - Rs.1,000 lakhs ed Asset purchased on 14.2014 - Rs.40,000 lakhs Useful life -8 years Fair value on 31.3,2017 - RS.20,000 lakhs Calculate for the year ended 313.2017: (10 marks) | a. Value in Use at the year-end b. Carrying amount at year-end c. Recoverable amount at year-end d. Impairment Loss for the year c. Revised carrying amount at year-end after Impa irment Loss | £, Depreciation charge for the next financial year B. Briefly explain the appropriate treatment for the following, under IndAs, | (5 marks) a, Property held by Z Ltd, a Real Estate Firm, in the ordinary course of business developing and selling properties. b. A Building owned X Ltd and leased out under Operating lease to Y Ltd. c. Land held by X Ltd. For undetermined future use. d. Property held by P Ltd, For the use in production. e. Bearer Plant 20. A. A Fixed Asset is purchased for Rs.25 lakhs, Government Grant received towards it is Rs.10 lakhs. Residual value is Rs.5 lakhs and useful life is 5 yeas ‘Assume SLM depreciation. After 1 year, Grant becomes refundable to extent of Rs.6 lakhs due to non-compliance with conditions. Give necess3) Journal entries to record the above. (8 marks) | B. V Ltd. Sold 1 lakh Refrigerators during the year with a warranty condition to make good by repair/ replacement any manufacturing defects repot within six months from the date of sale. Past experience in this regard sho" | that there were no replacements carried out but minor/ major repairs Wer st necessitated to the extent of 10% / 5% respectively of the units sold. The oo page ztai. guch minor { major repairs woud noe iedom Ie atge the B€CoUNtS for the yeas, 900 / Rs.6,000 respectively. Reoeiian inthis regard. Commeny, 7°¥ 1 company doce not reflet any |. Reported a Profit before (7 marks) 20th September. On enquiry, you oe RS7 lakhs for the quarter ending treatment required under IndAS 34 an¢ M* following. Give the income. sand Aacertain the correct quarterly &. Dividend income of Rs5 i (7 marks) : 85 lakhs recoie o, Spies tte eet ot Ted el during the gurter has been . 80% of the Sales Promotion Expe ee quarter has been deferred to tigress RS, 15 lakhs incurred in this quite bao he next quarter, as the sales in the next ©. Cumulative loss of Rs. included Rs. 2 Lakhs related eS Fecognized in the 2nd quarte, which 2 : earlier quarter 4. Gain of Rs.15 lakhs from Sale of Investments sold in the Ist quarter as apportioned equally over the full year ein : e es uate the Company changed depreciation method from WDV sono nan uate in excess depreciation of R12 lakhs. The entire a ebited in this quarter though the share of this quarter cosa uarier though the share of this quart £. Bad debts of Rs.40,000 incurred during the year , 50% of the Bad debts have teen deferred to the next quarter B. What do you mean by Related Party Transaction? Give any six examples for Related Party Transactions. (8 marks) SECTION-D (1x12=12) IV) Case Study - Compulsory question. 22. X Ltd. Started construction on a Building for its own use on Ist October 2015. The following costs were incurred. - | Rs30,00,000 Purchase price of land ‘Stamp Duty and Legal fee Rs.2,00,000 | Architect fee Rs.2,00,000 | Site preparation ~_[Rs50,000 Materials Rs.10,00,000 Direct labour Cost _ | Rs.4,00,000 General overheads - — | Rs.1,00,000 leted in 9 months from the date of construction start, st October next year (ie. 1 year from start date). The t the start date, for construction Company had taken a Loan of Rs.40,00,000 on al i of the Building (which is a Qualifying Asset as per IndAS 23). The Loan carried is repays later 18 October 2015. interest rate of 8% p.a. and is repayable 2 years ; On i n excavator for Rs.12,60000 with an On the same date X Ltd. purchased a estimated residual value of Rs.60,000; details relating to the excavator are The building was compl and brought in use on 1 Page 3 of 4