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AS Notes

The document discusses various accounting principles and practices, including the preparation of financial statements, accounting equations, and the effects of transactions on balance sheets. It also covers topics such as historical cost, current cost, and financial capital maintenance. Additionally, it provides examples of transactions and their impact on a trader's financial position.

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14 views211 pages

AS Notes

The document discusses various accounting principles and practices, including the preparation of financial statements, accounting equations, and the effects of transactions on balance sheets. It also covers topics such as historical cost, current cost, and financial capital maintenance. Additionally, it provides examples of transactions and their impact on a trader's financial position.

Uploaded by

Sv
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
F siitonce toienree ONErOD Ueki eon to Accounting .» Why o posticitas Atandard thttreh Wilen accoumaiing aseo % cover and + wong Scpp2 + Not applicable to Lohitn Stems. DefiaLtien > criterion. Voter mage Ow atem/{ transaction) gvent un hep Punt __s| meotusement > at DWhae vote to wecord faesentoeiion > Where to Show tn EC [Diectotese + Quattotive ond Quonkitive daccdptiem of Simt/Tixancaatdont Of Qceoun Eaomp i: MachLingrgs tt Coer = 19 OOD and life = IDYyre. m= | -Me@osteement Oe = Z1pso ale @i Entry = n (ogo __|Reeoantkiuon TeMoch 100d SPL. Dep™ aud Amprt? tood Phe tonteytd ion Deon le Chosged eon Sim Diseip turn: ©) Aduoutagas of AL & Crosdosogti sw D Dérctocure, © Compas tug Con a) fe Sobel i 2, ICA! has pectic al Foe 51 Whieh formutatesr As. Stape SLéuefayso. Study Group Drage vs tommant1Liews EMP OLiune Dacpet Comme nes Viewe Mt Oatifyy ot ot fos er Noerg'ed cy NERA Amon 40 Compare RavieD | 6avieiion Ls ke lo fe In ie he |e [— Corporate. Non Corporate Cnetuida £ Pasetndé dass, abd Seamption exLempion M@olitery @intorprise) 3 Condition gor sme or me me D not .kted (nor in bine process ef? Wastin’) ta. kt ( Fenaned vetitbad beomn| OF i cormpany. Ui) Tuxnover dogs not. oveaed 7p Crores (ome tudung olher Oncprme) iu) Sorrowengs dows not exeaed Sp Crones Yok o holding! Lusty of forge ontet. 4, Lt. fe ic c gentile _Eal meme As Fully not Sf Faxtot Opplicomte ‘turnovers ocr ¥elaxation Ko aM mame | Borrow Ung 6!0cr CAS tp inpt Hptduna | dusacy au meme D1, 20, 2 Of aloova MEME 10, I, 18, 19, then 22,,26,28,29 18 Gund 28 arg not ape icaints + Ell Apolicabititys on Corporate Entities sme Bauer ieto Nom Sne- Fut AS-17 Apply As. Cc opkienad fL-1" HDAC, £8) Uniitizd Paxtiat AS tS 14,10, 26 NW Csper Apply As Concept -S > Ctotue of Ac See 12.9(/ Com, s Requiras companict to prasent the EL in Actoudanw unde Sea 1b% oy Mer Sec 1%) (2) Quattor is drt Atare Wu Quedtkore Useport Whetner Fe Comply bola mb Or not B | kee 12965) Co. thor t from At eine Weatenfor devtakecem ard Qmpock FFiurantio nature. Od aleo Seam. not & do nek disetntg toue aid Fair VEAD. 4. Ore® ax eae Pricrrilie 4% low Bod fe Bed ce tt Concept —5 ~ Frame Work of AS 3 - : : Fe) to das l i np Ae is quattouls foro paxtoulos Cransocttem 69. Agricesttiure Occ ountén y a - 7 bed in & omen Q ponca Atote mona __FjAceot —teo omic. Reto g In Control of Enti tip =SPHourng Putters Economic penertt — tianiti =)S8t is a or = i j ici Crom patt ave, SS) Dhieh can oe dethled oy outptouDd ee =) donomic rotouscas . St can ba measured [ egeai ty =| A4a05 twee iaiititiae => St is radiduas invoraet =) St changes dus to IG Transaction ley Kyuarvanptder SEICSH [Link] O° Aros | FroenCopitod. efademption, buy Back ® Dividend DrawWenae iF Progit [lass « _! noone. f COLe in TaAtource pith ous fneragaLe in Wosoltctiy Expense | Dealing in resources withe Oegcrags¢ in asset 4 Usens ‘ fat St Opening Balance Sheet of Mr. A is showing the aggregate value of assets, liabilities and equity #8 lakh, #3 lakh and #5 lakh respectively. During accounting period, Mr. A has the following transactions: (1) Earned 10% dividend on 2,000 equity shares held of ¢ 100 each (2) Paid # 50,000 to creditors for settlement of # 70,000 (3) Rent of the premises is outstanding # 10,000 (4) Mr. A withdrew #9,000 for his personal use. You are required to show the effect of above transactions on Balance Sheet in the form of Assets - Liabilities = Equity after each transaction. Assets, liabilities and equity of a trader on 1.4.20X1 are % 5 lakh, % 2 lakh and % 3 lakh respectively. Prepare accounting equation with following transactions during the accounting period: (@) (b) (©) @) ©) (fy) Introduced capital = 20,000. Earned income from investment % 8,000. Liability of € 31,000 was finally settled on payment of € 30,000. Wages paid % 2,000. Rent outstanding % 1,000. Drawings ¥ 4,000. Agtovent Rellauote E& Ahowld oo muioble ae Ahoutd Tree Core!) sneutcd Slip | ba and Fattoud fotan Complete, Fa utactomnr)g Concept Gupitineuk ove re anu form __— Pnaddence distort on orlolos . Should ba dumpte un ond (aundiszag¢ oro. Snoutd permit onlh Inter fm Compari.4lon Berger paint Ve Otiow paints on Proviout year We Currant Year in fin onc Aoeermen Hustorec. p. a et are ord@d at ore, a. Oo oF Dp Agrak' on Quien . Lote Litt 2s arm recorded as Folr VOlue of Consideration fecoiuad. rent Cos: OSsabs arg recordgd ar the Arun that Wo d oz req rad Oeguiva the aséecgt today alli et are recorded of jount thak Wolld ragquéire tp Settle the obUigakrien today RAgoli cats a Q a 2% are recordd@d as (recorded af tnas WOW poicd toda Mr. X purchased a machine on 1st January, 20X1 at #7,00,000. As per historical cost- basis, he has to record it at € 7,00,000 ie. the acquisition price. As on 1.1.20X6, _____Mr. X found that it would cost #25,00,000 to purchase that machine. Mr. X also took _ loan from a bank as on 20X71 for 75,00,000 @ 18% p.a. repayable at the end of 15th- _____ year together with interest. Hisepricay Cost 7 Ottet = Ucoioitatig = ———A machine was acquired for $ 10,000 on deferred payment basis. The rate of. exchange on the date of acquisition was #49 per $. The payments are to be made in. ———5 equal annual instalments together with 10% interest per year. The current market- _____value of similar machine in India is #5 lakhs, Qand get rata + ! Sf pert Currant (est @f see iste ‘Carrying amount of a machine is % 40,000 (Historical cost less depreciation). The machine is expected to generate # 10,000 net cash inflow. The net realisable value ——— (or net selling price) of the machine on current date is # 35,000. The enterprise’s required earning rate is 10% per year. ——The enterprise can either use the machine to earn ¢ 10,000 for 5 years. This is equivalent of receiving present value of 2 10,000 for 5 years at discounting rate 10% on current date. The value realised by use of the asset is called value in use. The value in use is the value of asset by present value convention. ob = te Le a ti ir ____|pasettsi 24 J @ @ eo historical Curren Pnysicos Cot cose Cast - moirnters nocd. +¥o -ve tnok coun id (ntroducad be woth rea uon aakion of Proget ( = é price. Hietorleay Com Current Cost. cap RniflagLon Acsucted) L _| wane Lid ehiLni Cpstn ree, Pus Un capi Indore une Opening prise @ ygor Index Hr ip- +> Growli/Agtained Earnings dtep-7 lose Step a [capsule #1 LA trader commenced business on 01/01/20X1 with @ 12,000 represented by 6,000 ———1units of a certain product at® 2 per unit. During the year 20X17 he sold these units at ——} #3 per unit and had withdrawn %6,000. Let us assume that the price of the product at the end of year is #2.50 per unit. In other words, the specific price index applicable | to the product is 125. | Mohan started a business on 1% April 20X1 with % 12,00,000 represented by | 60,000 units of #20 each. During the financial year ending on 31% March, 20X2, he sold the entire stock for ¢ 30 each. In order to maintain the capital intact, ___| calculate the maximum amount, which can be withdrawn by Mohan in the year —— 20X1-X2 if Financial Capital is maintained at historical cost. Mr. Unique commenced business on 1/04/17 with ‘20,000 represented by 5,000 units _ of the product @ “4 per unit. During the year 2017-18, he sold 5,000 units @ °5 per - unit. During 2017-18, he withdraw “4.000. +31/03/18 : Price of the product @ °4.60 per unit ; *Average price indices: 1/4/17: 100 - & 31/3/18 : 120 ; Find out: Financial capital maintenance at Historical Cost i Financial capital maintenance at Current Purchasing power ; Physical Capital Maintenance ALtd. has entered into a binding agreement with Gamma Ltd. to buy a custom - made machine # 1,00,000. At the end of 20X1-X2, before delivery of the machine, A Ltd. had to change its method of production. The new method will not require the machine ordered and it will be scrapped after delivery. The expected scrap value is nil. You are required to advise the accounting treatment and give necessary journal entry in the year 20X1-X2. A trader purchased article A on credit in period 1 for 750,000. He also purchased article B in period 1 for 2,000 cash. [ The trader sold article A in period 1 for #60,000 in cash. |(d) Healso sold article B in period 1 for #2,500 on credit. ;Profit and Loss Account of the trader by two basis of accounting are shown below. A look at the cash basis Profit and Loss Account will convince any reader of the irrationality of cash basis of accounting. \_|J.K, SHAH AS-! eS ee DUS ure o'@ ting Poul Pet Ramee | __ are @noray Funancias ts (QPrt) Ot tnelicde, —_— T T 1 principias and method of OU GPRS Ahowd be preparad Opply tng thace prineLpta.e. fououwing & aécempiicn Example d) Going Concasin Seen Kain 6) Geceruatc Valuation of FiFD| WAM ©) Consietanciy | Snventory shen sclocie . SP anty FAS Valuativn mf Cast) Revaluation W ie not fotiowed Iien FA only fact Shout be. Vatuatien Avan} Super « dlectotad. Of Good —____ —, we __ [Factors to be considera. 9 __|tohitz. Se e Xe be —f —————————— oprovicted Ihore is o change Prirmarty Leeondarts tn Low, AS Or for better True. and Prudence pracentatler un Ee Faxviem DBubstante but aot the me a Change Over for diectoce. )MOLON Lela Aad al policy 3 Accson for AU Significant b)Ni Bhowd oe |disetncaDd d) Senet ot i Y ; cH In the books of M/s Prashant Ltd., closing inventory as on 31.03.2015 amounts to % 1,63,000 (on the basis of FIFO method). ——+ The company decides to change from FIFO method to weighted average method for —— ascertaining the cost of inventory from the year 2014-15. Onthe basis of weighted average method, closing inventory as on 31.03.2015 amounts to ® 1,47,000. Realisable value of the inventory as on 31.03.2015 amounts to ¥ 1,95,000. Discuss disclosure requirement of change in accounting policy as per AS1. X Ltd, sold its building to mini Ltd. For % 60 Lakhs on 30.09.2010 and gave possession of the property to mini Ltd. However, documentation and legal formalities are pending. Due to this, the company has not recorded the sale and has shown the amount received as an advance. The book value of the building is € 25 lakhs as on 31st March, 2011. Do you agree with this treatment? If you do not agree, explain the reasons with reference to the accounting standard. State whether the following statements are ‘True’ or ‘False: Also give reason for your answer. (i) Certain fundamental accounting assumptions underline the preparation and presentation of financial statements. They are usually specifically stated because their acceptance and use are not assumed. (i) If fundamental accounting assumptions are not followed in presentation and preparation of financial statements, a specific disclosure is not required. (ii) All significant accounting policies adopted in the preparation and presentation of financial statements should form part of the financial statements. (iv) Any change in an accounting policy, which has a material effect should be disclosed. Where the amount by which any item in the financial statements is affected by such change is not ascertainable, wholly or in part, the fact need not to be indicated. {v) There is no single list of accounting policies which are applicable to all circumstances. Summarised Balance Sheet of Cloth Trader as on 31.03.2017 is given below: Liabilities Amount (2) Assets Amount (2) Proprietor's Capital 3,00,000 | Fixed Assets 3,60,000 Profit & Loss Account 1,25,000 | Closing Stock 150,000 10% Loan Account 2,10,000 | Sundry Debtors 1,00,000 Sundry Creditors 50,000 | Deferred Expenses 50,000 Cash & Bank 25,000 6,85,000 6,85,000 Additional Information is as follows : (1) (2) (3) (4) (5) (6) (7) (8) (9) The remaining life of fixed assets is 8 years. The pattern of use of the asset is even. The net realisable value of fixed assets on 31.03.2018 was % 3,25,000 Purchases and Sales in 2017-18 amounted to % 22,50,000 and % 27,50,000 respectively. ‘MB The cost and net realizable value of stock on 31.03.2018 were % 2,00,000 and % 2,50,000 respectively. Expenses for the year amounted to ¥ 78,000. Deferred Expenses are amortized equally over 5 years. Sundry Debtors on 31.03.2018 are ® 1,50,000 of which @ 5,000 is doubtful. Collection of another % 25,000 depends on successful re-installation of certain product supplied to the customer; Vo Closing Sundry Creditors are ¥ 75,000, likely to be settled at 10% discount. Cash balance as on 31.03.2018 is & 4,22,000. There is an early repayment penalty for the loan of @ 25,000. You are required to prepare: (Not assuming going concern) (1) (2) Profit & Loss Account for the year 2017-18. Balance Sheet as on 31st March, 2018. | Jagannath Ltd. had made a rights issue of shares in 20X2. In the offer document to — its members, it had projected a surplus of #40 crores during the accounting year to _ end on 31% March, 20X2. The draft results for the year, prepared on the hitherto _ ___| followed accounting policies and presented for perusal of the board of directors _ ——| showed a deficit of #10 crores. The board in consultation with the managing director, — —— decided on the following: a ___ (@) Value year-end inventory at works cost (#50 crores) instead of the hitherto a method of valuation of inventory at prime cost (#30 crores). _ (i) Provide for permanent diminution in the value of investments, which had taken place over the past five years, the amount of provision being #10 crores. —— As chief accountant of the company, you are asked by the managing director to draft. — ——— the notes on accounts for inclusion in the annual report for 20X1-20X2. a Spin ___| As per AS 1, any change in the accounting policies which has a material effect in _ —— the current period or which is reasonably expected to have a material effect in later — —— periods should be disclosed. iii | — ——}— During the year inventory has been valued at factory cost, against the practice — of valuing it at prime cost as was the practice till last yea. I As a result of this change, the year-end inventory has been valued at % 50 crores and the profit —— ——+ for the year has increased by % 20 crores) The company has decided to —— | provide 10 crores for the permanent diminution in the value of investments | which has taken place over the period of past five years. The provision so —_ made has reduced the profit disclosed in the accounts by %10 crores. XYZ Company is engaged in the business of financial services and is undergoing tight liquidity position, since most of the assets of the company are blocked in various claims/petitions in a Special Court. XYZ has accepted Inter-Corporate Deposits (ICDs) — and it is making its best efforts to settle the dues. There were claims at varied rates ——| of interest, from lenders, from the due date of ICDs to the date of repayment. The company has provided interest, as per the terms of the contract till the due date and a note for non-provision of interest on the due date to date of repayment was affected in the financial statements. On account of uncertainties existing regarding the determination of the amount and in the absence of any specific legal obligation at present as per the terms of contracts, the company considers that these claims are in the nature of “claims against the company not acknowledged as debt", and the same has been disclosed by way of a note in the accounts instead of making a provision in the statement of profit and loss. State whether the treatment done by the Company is correct or not. Spin | AS 1 ‘Disclosure of Accounting Policies’ recognises ‘prudence’ as one of the major | considerations governing the selection and application of accounting policies. In ; view of the uncertainty attached to future events, profits are not anticipated but recognised only when realised though not necessarily in cash. Provision is made for all known liabilities and losses even though the amount cannot be determined with | certainty and represents only a best estimate in the light of available information. Also as per AS 1, ‘accrual’ is one of the fundamental accounting assumptions. | In this - situation, | Ay the company should provide for the liability (since it is not waived by the lenders) at an amount egiyrated or on reasonable basis based on facts and |—circumstances of each case. However, in respect of the overdue interest amounts, - | which are settled, the liability should be accrued to the extent of amounts settled. ©) Non-provision of the overdue interest liability amounts to violation of accrual basis. A CLS ' . of accounting. Therefore, ihe treatment, done by the company, of not providing - the interest amount from due date to the date of repayment is not correct. ; ~ a Verands enterprise AL=2. a? Coe poR mis a apy @ Zip or rc— hictorica Cost oc am: Bop mis 20D Pia Snit QM coun used for Unto. > dtc of ez mating bi Ydour Raub Mates al Putehnased — entra and. cam tpday @ : <0 or SEO ftourt |b ~— hii Current (mst. were or a a te -» DWork-un -prog rate, Replace mart, | neo rap CIP) Cost. pi bat | CO @. rc = win be soo | dorpletad urs arr udar Anis Fiinutned Geod& (Fa) te =|ote a AM +008 OF Conversion ani Whe prite @ whisn ¢hirte Lo td ‘ana mond fecelvanie en Kore = N@t Reatitatsle Vatudcs E&tirnato ds? “ Ecttimatad s& i) Eteimatad toe W Net Aeoticawte Vole N peeieomanery Nee pt pean tng ep Snwentery (Ge _Snvento' NZ Ne HOLA. for & t {0 pret in Mm i y x i - " 5 busi < (Wore in progres ULed Finis Goods “= ai) Production or dtock tn Trade) procec. _ (Raw at-ond cod Spare paxt <\2m Constumalo(a.) ay 660K broeer AS Ib Wore « Ga Larue ib = | Work tn progrete of Construction Contracts AS] [Producer ogrictultt2as, forest and mineral products ~Naturzal Aacourcac Producor. Uwe Stock b Pee Rm FG/ WIP margriol Fow mato! Mould be vatlidcd @ cost But OF Funisndd Goode ara to bo S0tcd belHID Cox nen Row marguol should vatued 2p ant Cost. HOD volue closing stock of Raw Mokoeot @ Cost Atop-1 Atatement of Unis Unite puschnated KR Stap-3 > Piunchaww Cost ou | Normad dose GR) WRK Total Cost of RM pusenate Octucs = Normas Qnormal bors. Ges) Gnis pusmased {ote Units meatvoed RR GnLES conéianed URKR)_ ‘Stop-4} Valuation Gonomal Loce of RM 3 abnormal x Cott oy Toke Gnike RM pa Gosing Atock oF RM = (nits puschated x rai) Ctesung Atock » Cock of Accs, Non refuundololta tars KAXK LRM in Unis Rp Freignt or Corrasde mS boadiing | unload ung eS Puree Commission KK Trowntle ISixcun ce RRA Olfier hondtiing Chorget KXK ARK Agrinshe (td Ordered 16090 bas of BM@ F160 per ba, —__| or itn 2 At py i Frougrt ChoOsges + 5 \4016D Normaz 2oss a 27 Company recetved ISSOD and consumed |560D untts Cofawate value of Uosing Stock, and alanormas lors, Funisthed Goods and WIP Should be vollugd at (odor bk or N@t Realt tasote Vatu. St cam be valued at Stam by Stem bats Or Group basis Net Realitaits Value Estimated 42 Wing prica. lose > Estimated Se NRY of Finished Goods “@NRV « Calculated on Wie bate of Grpactod dato o@ dasa Eq. For Winter Garments considgar Estimated Setting price of winter eae COLT ; Sie St inctudes any coet neco teary to bring (nvantory to prasent location Gund Condition wey Trader In Coée of Purchased Goods Py ic. Dr yr Pee KKK (Units puschated x rau) (Acdct Non refundassts tazee KX Freight or Corrasqe ON loading / unload ung SONS Puree Commission XK Trowntls Instrcunce RRA lolfier hondtiing Chorge2e *K*K ARK Manufacturer in Cose gf Wantiefactiured Goods Coxt of RM Add Conversion Coc. =tosoour Cost - Production Overhg@ad = Manttfactiering Overhead *Vartotole Over higad — Fred Overhaad Flxed OH ra x Ants Add Olfier Cost. SMe OfWer Coct Includes - +Prumary packing mateuas = Boro ioinng Cost if Inventory takes > 12m tp bg tn ready tose Condition fa, Wine. Doge not Inctude . + Olsnormad loss = Cot DUg¢ bunt —Tnbevese task — Ad mtn & Setting OUerhead ~Aborage Cost unloes Ae Fured Overh@ad rate = Totas Fixed oH higner of Octugd tunlla produced or Norval Capacitig Nnecescary for prod” Eq, Vaccine Octua) Fured Overne@ad = Z100000 Normad production =_ BO tunis a7 ale Gctual produc tion Gctual produc tion «So ances 16D Unless Cajeware tna Vole Gf Raw Mote) and Clocung tock > » per uunck cast pried tncluciing Oreiee Atty 260 __| cradkt it a Pua d ane, In a 2D | __ tan torolincg chourrggs ID FISH > Raptoacamante (st of RMK eDUeet Lobous. Coc FeOony Direct OvVarhdad F4opwy > Tbtas Fixed Overhead fortha ugar War 2! 260.000 Covoup, eZ (22. gneve FG ye ti 2300 doin __ }Sn t Sn rles __|Orcfinar ites Intar Orciinaritey Inter __|Chanogawie . - Changgable Hustoriccys Non Hictoricap Cnet Naethod Cote Matnord ___|F IFO wam Punt In Weigntacd Ctandard Foret Out Ouverage Cost. Method zis method I lund tee, Which Cacung Flux demndarg Celeing priie lara. Atoek. & COKE Coc por tence method Purchatad — & VOWsed ie ket dt Closing Stock @

NRV Of bep product at per Stop-4+ Qe) ear of Soap KN) RRX Stop-+-- allocation of Jou e Catewiakion of Cott pv JP, TPs QO) Output tn tenis 20 RK Q Gare price pea tnt XR ARK Soras Value (aK) RR KX d) Jount Cost as par ktap-2 atlocarad wn the rokip Of Kajge Vola ~ N 2 Coste piu = a+o N Step -4 VOleaet ov @nven to! ' TP, JP. __| Sf s ee RI Coct pw ‘ Nw N 2 Votug enventory CAxs AS Rx ___[sapsule $7) ___| Odie. _| 1a f | Wrete mam elcret iss Lng thea Main products, fay predtck Ee ral tos { OF, Ons Lunde > Pusemaca =~ Real ore al fo mon tfachtaaiares __| = Or > Wages pod —_ 3 160,000 > Rimad Overh aad - #120,000 > Variable Ovarnaad - #60000 > Outpub e 12560 Units N 19.000 Untks e B,200 wns > Unsung Inventory P toOD tunities N 400 _umite ee 3.8000 On KJe of ay procluck inouriing MCPALOFC precaasing @rpense Of ZIOQ0D Gre} ____ from 2ales Of Scop Compute te Valtre Of C peng Snventory of P andN Praeeingg Question. The following are Cost and NRV value of five inventory items Cost (2) NRV (®) A 15,000 5,000 B 27,000 52,000 c 54,000 74,000 D 1,10,000 85,000 E 68,000 62,000 2,74,000 2,78,000 Find out the value of inventories of (a) Individual items are distinct items, (b) Individual items are not distinct items and should be taken as a group. ——} nature of interest, X Ltd; decided to exclude such charges from closing stock for the year [eapsule Fo] Paumant for delas =Snteuoee. The Company X Ltd., has to pay for delay in cotton clearing charges. The company up to 31.3.2014 has included such, charges inthe valuation of closing stock. This being in the ——} 2014-15. This would result in decrease in profit by € 5 lakhs, Comment. Soin The Qtvan case sglOres to AS -Valeagi on of Snventory | As par AfS-2, Cost of Snventory Sneiudas ' ~ ¢Dét Of pustnastec + ¢pnveréton cast = any other Cost hich are incurred to bring Inventory to (te prasent location and condition St shay not include ~Ony nt@QRast orfinance cost for deferred eradct Or da2lay chasqas @rcoption to Qhoave wile it Lohan inventory bakes Bubctantial pess0d Of time for Getting ready for Sneanted Sac 8n tha tittant Ccace in Nak 2 Zhe Che __| pasled je tncteectad in Snventory cost Such Snvantiry Cost £nould ba arcluded foliowuina proulster cf! AS -2- Theasfore cantantteon OF x ted for not to unctud]a __ hee) dates in clogeting Chasqat ie correct. SM Enterprises is a leading distributor of petrol. A detail inventory of petrol in hand is taken when the books are closed at the end of each month. For the end month of June 2021 following information is available : (i) Sales for the month of June 2021 was & 30,40,000. (ii) General overheads cost & 4,00,000. (iii) Inventory at beginning 10,000 Litres @ & 92 per Litre. (iv) Purchases - June 1 2021, 20,000 litres @ % 90 per Litre, June 30 2021, 10,000 Litres @ 95 per litre. (v) Closing inventory 13,000 litres. You are required to compute the following by FIFO method as per AS 2: (i) Value of Inventory on 30th June, 2021 (ii) Amount of cost of goods sold for June, 2021. (iii) Profit/Loss for the month of June, 2021. (May ' 22) Kirti Ltd. is in the business of manufacturing computers. During the year ended 31* March, 20X1, the company manufactured 550 computers. It has the policy of valuing finished stock of goods at a standard cost of % 18 lakh per computer. The details of the costs are as under: (Ein lakh) Raw material consumed 400 Direct Labour 250 Variable production overheads 150 290 Fixed production overheads (including interest of 100 lakh) Compute the value cost per computer for the purpose of closing stock. Mr. Mehul gives the following information relating to items forming part of inventory as on 31-3-2019. His factory produces Product X using Raw material A. () _600units of Raw material A (purchased @ Rs. 120). Replacement cost of raw material Aas on 31-3-2019 is Rs. 90 per unit. (ii) 500 units of partly finished goods in the process of producing X and cost incurred till date Rs. 260 per unit. These units can be finished next year by incurring additional cost of Rs. 60 per unit. (iii) 1500 units of finished Product X and total cost incurred Rs. 320 per unit. Expected selling price of Product X is Rs. 300 per unit. Determine how each item of inventory will be valued as on 31-3-2019. Also calculate the value of total inventory as on 31-3-2019. __[sapsuie £15) | Raw materials inventory of a company includes certain material purchased at € 100 per kg. The price of the material is on decline and replacement cost of the inventory at the year-end is % 75 per kg. It is possible to convert the material into finished product at ____| conversion cost of 7 125. —— Decide whether to make the product or not to \make the product, if selling price is (i) € 175 and (i) € 225. Also find out the value-of inventory each case. (May’10) Normastots 4'/, AM utad IZO0DCD MT @ Zisv @ Year end 430 MT of Wattage WAC wm Stock You are required to value the inventory per kg of finished goods consisting of : (a)_ Material Cost € 200 per kg. (b) Direct Labour % 40 Per Kg. ()__ Direct Variable Overhead % 20 Per kg. Fixed production charges for the year on normal working capacity of 2 Lakh kg, is = 20 lakhs. 4,000 kgs. of finished goods are in stock at the year end. Joy Ltd. purchased 20,000 kilograms of Raw Material @ % 20 per kilogram during the —— year 2020-21. They have furnished you with the following further information for the —— year ended 31st March, 2021: a Particulars Units Amount (®) | Opening Inventory: Finished Goods 2,000 1,00,000 —— | Raw Materials 2,200 44,000 —— _| Direct Labour 3,06,000 ___| Fixed Overheads 3,00,000 ____| Sales 20,000| _11,20,000 | Closing Inventory: | Finished Goods 2,400 _____ | Raw Materials 1,800 The plant has a capacity to produce 30,000 units of finished product per annum. However, the actual production of finished products during the year 2020-21 was 20,400 units. Due to a fall in the market demand, the price of the finished goods in which the raw material has been utilized is expected to be sold @ % 40 per unit. The replacement cost of the raw material was 19 per kilogram. You are required to ascertain the value of closing inventory as at 31st March, 2021 as per AS 2. (July' 21) In the following cases, find the value of closing stock as per AS 2: (i) Sonuis aretailer dealing in toys. During the year, he purchased items worth 3 1,47,000 and made a total sale % 1,54,000. The average percentage of gross margin is 10% on cost. Opening stock of toys at cost was % 20,000. (ii) On 21 March, 20X1, Mohan purchased 250 chairs at % 300 each. The selling price of the chair is % 400 each, Owing to a manufacturing defect, net realisable value of the whole lot of chairs was determined at 70% of their normal selling price. No chairs were sold during the year. 1e closing stock of finished goods (at cost) of a company amounted to % 4,50,000. The following items were included at cost in the totak (a) 100 coats, which had cost % 2,200 each and normally sold for 7 4,000 each. Owing to a defect in manufacture their NRV was determined at 50% of their normal selling price. (b) Shirts which had cost 7 50,000, their net realizable value at Balance sheet date was % 55,000. Commission @ 10% on sales is payable to agents. What should the inventory value be according to AS 2 after considering the above items? s available for Zing Ltd. for the year 2024-25: Raw Material: Closing Stock 700 units Cost price 35 per unit Replacement cost 20 per unit Finished product: FP1 FP2 Production (units) 3,000 1,600 Closing stock (units) 500 300 Material consumed %3,20,000 Direct labour 2 1,60,000 Direct expenses 78,000 Fixed overhead for the year was % 95,000, which includes godown rent of ¥ 15,000. Godown is used for storing finished products. Besides 2 main products, 1000 units of a by-product (BY) also emerged in the production process which was sold @ % 12 per unit after incurring an expense of & 2,500. % 4,800 was realized from sale of scrap. The average market price of FP1 is ¥ 160 per unit and FP2 is % 100 per unit. Calculate the value of closing stock of Zing Ltd. as per AS 2 ~__|J.K. SHAH AS = 7 Cash Flot Statement coneepe > Saas Pruncipas Rovenue. piscnata and S6suz and Generating itove Cong taam Redemption Non Curreas ‘ Gs2cte and BOTOWEnge — Uo PPE Sritnnai ites Snuattmans E ( te Caéh FLOW finory Finamating Qotivist ae (4) KKK Suanting Cosh and fash Bousvalonse ¢4) RAK |} @ _Costand dash Squivaolant Coéh balance. RX Bane eatance Kx Onvaestmencs from aoguicttityn date S08, KKK | 0 onty thoce tnvestmen® wien owe not reey hiqvizy imesic Investments un @Qquity 4nOle are not part Coth and Cott Squivatamt WG] Exchange Gain or lose arising ov Bank wbafante. held un foerecan Currency AnN0uld ba Added | Butstrocted from opginiuung odlanw Cathy & Cath Eguivatant aT From the following information of XYZ Limited, calculate cash and cash equivalent as on —— 31-03-2019 as per AS-3. — Particulars Amount (8) —— |Balance as per the Bank Statement 25,000 —— | Cheque issued but not presented in the Bank 15,000 ~~ | Short Term Investment in liquid equity shares of ABC Limited 50,000 ~__ | Fixed Deposit created on 01-11-2018 and maturing on15-04-2019 75,000 ____ | Short Term Investment in highly liquid Sovereign Debt Mutual fund on 1,00,000 —— }01-03-2019 —— | Bank Balance in a Foreign Currency Account in India $ 1,000 —— | (Conversion Rate: On the day of deposit ¥ 69/USD As on 31-03-2019 —— | 70/UsD) newpe ~2 -» Coc Flow rom OPGrao beng Activia. 1 Y Direct Method SndG2zck YEH 4 Cosh Salas KK | N@t Profct or PeT KK > Co¥ection from Debtor Xxx! (C2 COVof FL. - Oplaal of PL) = n XK | Add } Revertal er Non Cota -|Fees receoived xxx |& Non operating Grepense. Xxx =|Trade CommUS¢ion raed %XK*| —Deprociaeieon + \Casu reed em mattarily 7 Amortisakion Og loans Aad van te: - Rrelimunaxy ~xpence QWen to 4upplers| WaLtten off @mplouce «| Customer xx[- Gnegaoete Expense InE@ rent en Oloove Loan KKK — Tranéferto Reserve lace = Code en Bale of PPE Cash Puschacac ~ dose on Kale of Snvectrnent. GRO Payment tocradtton CxKx) = 8mpaument Late [Link] tr Open meog| Exchange lace BWagad, dafaxry, Admin lass > Reversals of Non Can Evp, Setting Exp, 3ne 4£.Non Operating Income. (K xx) loan £ Advance given Snteae2st Sicome Groce) ts Supp ua re (Customer Dividend Sncome CGrasc) 4 Emptoye 2s Osxn) | 7 on Sate of PRE] Investment Excrange Gain —Teasint a ae ‘ @) | ee Tae pata (RRR) Income tae Ratund KK (N@&t off Tas o ST Refund) €: tLonal Stems aK Aad +Dacraaca en cA ne Qneraace ty ct KR Onsusaned cCladm racaivad less + Onereace tn ca Qexx) | Decrease tr RRS XXX @) Woatung Capitol 3 cA = 4, B) Workung capita ——_—_ Ineranka = Dacragote . lags Add A Lh@o Sip Qo 6) Credit Galas BSOOD Creditoc, Cracit Pusmases Denton \S0c0 29000 = 220,000 Stow 10.000 12.000 (ee 12600 81,000 PL [Link] ST.00D ____| From the following information, calculate cash flow from operating activi —__| Summary of Cash Account 7 — for the year ended March 31, 20X1 - — Particulars x Particulars z 7 ——F ]To Balance b/d 1,00,000 | By Cash Purchases 1,20,000 c ——} |To Cash sates 1,40,000 | By Trade payables 1,57,000 i: | |To Trade receivables 1,75,000 | By Office & Selling Expenses 75,000 7 | By Income Tax 30,000 / ___| |1o Trade Commission 50,000 | By Investment 25,000 : | |To Sate of investment 30,000 | By Repayment of Loan 75,000 : ——} |To Loan from Bank 1,00,000 | By Interest on loan 10,000 - ——y [To Interest & Dividend 1,000 | By Balance c/d. 1,04,000 - — 5,96,000 5,96,000 7 Come Smportant points regarctung Cosh flow from. Operating Activities 1 ProvLtten fortoy and Advance toe (Eq. op cp rs Op on Prov for fan. 4n00 A000 Prov for fan. A090 A90D Tom. paid in oy = 21000 Eq. op [om eg. op on. Prov fbr lan. 4000 9000 Prov fbr lan. 4000 _Q00D0 Cris, providtesn 7000 Advance taz 6000 RODD — 2 us - OD) Discount QUEWed and Discount recat vad 6) Proviction for doubtfum daets as it 9ect Outomaticatiy aAckuUsted un changel in currant O66eete and Current Woasitias ».| Pxamium on Redemption of Reoferancd share and Peeamitum en Redemption of Dobarntires both Shouid 62 AzdtOd to PL And dince boli axe non Opuating Exrpansa therofere tt Should be added tO net progut wv CE from OA Unde S3Dm- _ 4: | Journal Entry for sncome re cosn Ae Dr KK BO > Add tr Snvecting activities Tes Ae Dr ARs 2D > lass finom Tat pad tn OA Te Sncome “ye RK 10D > lass from OA under SIAR CE Grose method, _§.\Jo a id. Erpanses Ae Dr XX 10D To Toe Ae KX 20 Add b> tae paid an OA: Te Casauy Ae Rx» SO _ 6 |\Corcemarion of Net 2 u fora. tease (PBT) Change int. Ae Cl. botance — op balance = KKK AGA Change in R2serve __ KKK had Oiutidend declared tn Cusrant Y2ar KKK Par KX Ada Proviisdem for soe RRA a PET XK Op o PL 20 80 GR Is as Dividend paid £7 Toe, ZS, From the following, calculate the Net Profit before tax. Particulars 31* March 2012 31* March 2013 Equity Share Capital Securities premium General Reserve Profit and Loss A/c 10% Debentures Sundry Creditors Provision for Tax 2,50,000 75,000 1,00,000 2,00,000 10,000 25,000 5,00,000 25,000 1,00,000 3,00,000 2,00,000 35,000 45,000 During the year, Dividend paid for the year end 31st March, 2012 was % 25,000 -|then Wecan coleman —Then we cannot caleware — Cash Fin from Operating * Couactlen from Datos. Gctivitias under both © Faoyment bo Croctttore @)Diect Mathod s Expense patd Osnanwect mathod hence Wa. Cannot folnD Dixect Method : Therefore aypoptes Sndiect mathod, [Dimer metned | Sndtirest Method | Propore. Prapore, + Occount. of ALL Stame 2 Account. Of Alt Stame - 7 ji Prepore Cre @rcept Currant Asecte and Currant Uabitity Prepore Cre Concapt-% » Onvasting Octivetty Cath recived em S012 of PPE cath received en Sate ‘of Investments XR Snteaast and acvidend Ageelvad XK ~>N@t Snswance Clam Aecelvad on PPE RAK Cath fecotved sy redamption Oo Depotie KRY Rent recotued om property Hid ag Investment KK Grant receivu~d RRA Ingurance Clasm reed ror tocw or PPE KKK dace Coreh paid On pusiwnate of Snvactmeant cath paid On purchace of PPE Qos) CDS Of Ratearan and Dave lopment KK) Cosh paid for makung Deposus (9) loamst 8 ADVaNce Gwen CR) COM paid for Construction of capitar Wir (**%) come tar poid (capitas Gaunt) KARA) 50/7. VA Rodnibo. Ramesh ed ted We 20 Konia the] gave toan tp|Sonan ttd __| - w [Link] mcegivad JB0Gfter Tas of JID Ce Ae Dr ao >Add tw SA TOs Ae Or 20 % lass from Tae padd uw 04 To Snt Ye 100 > lees th OA (EF 85M) she Rae ~ bed ivi i [wr Ce ae Dr KAK—> kotd to SA To Snveetment Ae A2Ouce Coct of __| Snvestment __|| Prepare cash flow from investing activities as per AS 3 of M/s Subham Creative Limited for year ended 31.3.2019. Particulars Amount (2) Machinery acquired by issue of shares at face value 2,00,000 Claim received for loss of machinery in earthquake 55,000 Unsecured loans given to associates 5,00,000 Interest on loan received from associate company 70,000 Pre-acquisition dividend received on investment made 52,600 Debenture interest paid 1,45,200 Term loan repaid 4,50,000 Interest received on investment (TDS of € 8,200 was deducted on the 73,800 above interest) Purchased debentures of X Ltd., on. 1st December, 2018 which are 3,00,000 redeemable within 3 months Book value of plant & machinery sold (loss incurred % 9,600) 90,000 Co. cotred ug Shara. Cath ravafved on Aseue of Debentusre| Bonde KKK Cash reezbvad ON long taim bean VaLtad KX [Coen recotred om OneUue of Shares KKK Cash rcaved from Cawt un arféar ARN [Additional Capital Introaucad "WRKK [ase | on Rack £, RK ares Kx) __ |east id om Rada 2. Daben ture GS _ \Cacin id om ce ‘ IRR, as on [oz Deve __\Sntoreetand Divédend para ORK) undartoriting Commutsisn paid Cas) KRX OF entity in afuanudas Instuction (bank) (nen found ung Codes fitows are part of Operating Qotusitier Loon tp Customer - loan frapaid touCutbomer 4 D@ppstt acca pted or rapaick a -Punaun oiLing — Snterast racd or paid Acti + Divideand racd P Non Cot Trancactions are decluded from cee, 69 OSsat pureamaried un @echangae of Anares| Oeoen ture From the following summary cash account of K Ltd., prepare cash flow statement for the year ended 31st March, 2020, in accordance with AS 3 (Revised) using the direct method. The company does not have any cash equivalents. ‘Summary Cash Account for the year ended 31-03-2020 Particulars Fact Particulars aoe ® Balance as on 01.04.2019 100 | Payment to suppliers 4,000 Issue of Equity Share 600 | Purchase of Fixed Assets 400 Receipts from Customers 5,600 | Overhead Expenses 400 Sale of Fixed Assets 200 | Wages and Salaries 200 Taxation 500 Dividend 100 Repayment of bank loan 600 Balance as on 31.03.2020 300 6,500 6,500 (8 Marks ~ Nov 2020 - IPCC) Ms. Jyothi of Star Oils Limited has collected the following information for the preparation of cash flow statement for the year ended 31st March, 2013: Net profit Dividend and corporate dividend tax thereon paid Provision for income-tax | |Income-tax paid during the year Loss on sale of fixed assets (net) Book value of the fixed assets sold Depreciation charged to Profit & Loss Account Amortisation of capital grant Profit on sale of investments Carrying amount of investments sold Interest income on investments Interest expenses Interest paid during the year Increase in working capital (excluding ca: balances) Purchase of fixed assets Investment in joint venture Expenditure on construction, work-in-progress Proceeds from calls in arrear Receipt of grant for capital projects Proceeds from long-term borrowings Proceeds from short-term borrowings Opening cash and Bank balances Closing cash and bank balances (@ in Lakhs) 25,000 8,535 5,000 4,248 40 185 20,000 6 100 27,765 2,506 10,000 10,520 56,075 14,560 3,850 34,740 2 12 25,980 20,575 5,003 6,988 Required: Prepare the cash flow, statement in accordance with AS-3, Cash Flow Statements issued by the Institute of Chartered Accountants of India. Make necessary assumptions. aT Prepare cash flow statement of M/s MNT Ltd. forthe year ended 31 st March, 20X1 with ____ the help of the following information: — (1) ——— (2) (3) (4) (5) _—__ (6) —— (7) —— (8) (9) (10) (11) —— (12) —— (13) ——— (14) (45) Company sold goods for cash only. Gross Profit Ratio was 30% for the year, gross profit amounts to % 3,82,500. Opening inventory was lesser than closing inventory by @ 35,000. Wages paid during the year @ 4,92,500. Office and selling expenses paid during the year % 75,000. Dividend paid during the year % 30,000. Bank loan repaid during the year % 2,15,000 (included interest % 15,000). Trade payables on 31st March, 20X0 exceed the balance on 31st March, 20X1 by € 25,000. Amount paid to trade payables during the year ® 4,60,000. Tax paid during the year amounts to % 65,000 (Provision for taxation as on 31.03.20X1 7 45,000). Investments of ® 7,00,000 sold during the year at a profit of & 20,000. Depreciation on fixed assets amounts to % 85,000. Plant and machinery purchased on 15th November, 20X0 for € 2,50,000. Cash and Cash Equivalents on 31st March, 20X0% 2,00,000. Cash and Cash Equivalents on 31st March, 20X1% 6,07,500. Prepare Cash flow for Gamma Ltd., for the year ending 31.3.20X1 from the following information: (1) Sales for the year amounted to % 135 crores out of which 60% was cash sales. (2) Purchases for the year amounted to % 55 crores out of which credit purchase was 80%. (3) Administrative and selling expenses amounted to % 18 crores and salary paid amounted to % 22 crores. (4) The Company redeemed debentures of @ 20 crores at a premium of 10%. Debenture holders were issued equity shares of % 15 crores towards redemption and the balance was paid in cash. Debenture interest paid during the year wast 1.5 crores. (5) Dividend paid during the year amounted to % 11.7 crores. (6) Investment costing % 12 crores were sold at a profit of % 2.4 crores. (7) % 8 crores was paid towards income tax during the year. (8) Anew plant costing @ 21 crores was purchased in part exchange of an old plant. The book value of the old plant was % 12 crores but the vendor took over the old plant at a value of @ 10 crores only. The balance was paid in cash to the vendor. (9) The following balances are also provided: Zin crores 1.4.20X0 Zin crores 31.3.20X1 Debtors: 45 50 Creditors 21 23 Bank 6 18.2 ——7_ (1) —] (2) (3) —— (4) (5) —— (6) 7 (7) (8) ——} (9) Prepare cash flow for ABC Ltd., using Direct Method for the year 10 ending 31-03-2019 — from the following information: Sales for the year amounted to @ 270 Lakh out of which 50% was cash sales. Purchases for the year amounted to % 60 lakh out of which credit purchases were 80%. ail vO Administrative expenses amounted to % 18 lakh. Salary of & 16 lakh was charged to profit and loss account for the year. Salary of @ 4 lakh was outstanding as on 31-03-2019. (Salary does not form part of Administrative expenses) The company has 15% debentures of % 10 lakh, which it redeemed during the year at a premium of 10% by issue of equity shares of % 9 Lakh towards redemption and the balance was paid in cash. Debenture Interest was also paid during the year. Dividend paid during the year amounted to % 12 Lakh (including dividend distribution tax). Investment costing % 10 lakh were sold at a profit of = 2.50 lakh. Income tax payable for the year was = 80,000. Depreciation of 25% is charged by the company on opening balance of Plant and Machinery. At the year end one old plant costing % 5,00,000 (WDV % 2,00,000) was sold for % 3,50,000. The purchases were also made at year end. The following balances are also provided: Zin Lakh Zin Lakh 31-03-2018 31-03-2019 Debtors 40 45 Creditors 20 23 Bank 5 7 Plant & Machinery 50 70 Provision for tax 1 0.7 (10 Marks — Nov 2019 - IPCC) Following information was extracted from the books of S Ltd. for the year ended 31st March,2020 : (1) Net profit before talking into account income tax and after talking into account the following items was %30 lakhs; (i) Depreciation on Property, Plant & Equipment %7,00,000 (i) Discount on issue of debentures written off 745,000. __| (iii) Interest on debentures paid %4,35,000 —| (iv)_ Investment of Book value %3,50,000 sold for %3,75,000. (v)__ Interest received on Investments 70,000 (2) Income tax paid during the year % 12,80,000 (3) Company issued 60,000 Equity Shares of 10 each at a premium of 20% on 10th April,2019. | (4) 20,000,9% Preference Shares of 7100 each were redeemed on 31st March, 2020 at — a premium of 5% ——_(5) Dividend paid during the year amounted to 711 Lakhs (including dividend distribution tax) (6) Anew Plant costing 27 Lakhs was purchased in part exchange of an old plant on 1st January,2020. The book value of the old plant was %8 Lakhs but the vendor took over the old plant at a value of %6 Lakhs only. The balance amount was paid to —__| vendor through cheque on 30th March,2020. ex —— (7) Company decided to value inventory at cost, whereas previously the practice was to — value inventory at cost less 10%. The inventory according to books on 31.03.2020 was % 14,76,000. tab” ce The inventory on 31.03.2019 was correctly valued at ® 13,50,000. (8) Current Assets and Current Liabil ies in the beginning and at the end of year 2019- 2020 were as: — As on 1st As on 31st April,2019 (2) March,2020 (%) || Inventory 13,50,000 14,76,000} — —__| Trade Receivables 3,27,000 3,13,200[ I Cash &Bank Balances 2,40,700 3,70,500 Trade Payables 2,84,700 2,87,300 —__| Outstanding Expenses 97,000 1,01,400 You are required to prepare a Cash Flow Statement for the year ended 31st March, 2020 as per AS 3 (revised). ____| The following figures have been extracted from the books of Manan limited for the year — ended on 31.3.2020. You are required to prepare the cash flow statement as per AS 3 ——}_using indirect method. | (i) Net profit before taking into account tax and income from law suits but after taking into account the following items was %30 lakhs: (a) Depreciation on Property, Plant & Equipment %7.50 lakhs.» ____| (b) Discount on issue of Debentures written off 45,000, —— (c) Interest on Debentures paid %5,25,000. | (a) Book value of investment 4.50 lakhs (Sale of investments for €4,80,000). — (e) Interest received on investments ¥90,000. (ii) Compensation received %1,35,000 by the company in a suit filed. (ii) Income tax paid during the year 815,75,000 (iv) 22,500, 10% preference shares of @ 100 each were redeemed on 02-04-2019 at a —__| premium of 5%. —+ (v) Further the company issued 75,000 equity shares of 10 each at a premium of 20% — ‘on 30.3.2020 (Out of 75,000 equity shares, 25,000 equity shares were issued to a supplier of machinery) (vi) Dividend for FY 2018-19 on preference shares were paid at the time of redemption. (vii) Dividend on Equity shares paid on 31.01.2020 for the year 2018-2019 27.50 lakhs __| (including dividend distribution tax ) and interim dividend paid %2.50 lakhs for the —__| year 2019-2020. ——} (viii) Land was purchased on 02.4.2019 for %3,00,000 for which the company issued 22,000 equity shares of % 10 each at a premium of 20% to the land owner and balance in cash as consideration. ____| (ix) Current assets and current liabilities in the beginning and at the end of the years — were as detailed below: | As on As on | | 01.04.2019 31.3.2020 | ®) ®) i | Inventory 18,00,000 19,77,000 | Trade receivables 3,87,000 3,79,650 — Cash in hand 3,94,450 16,950 — Trade payable 3,16,500 3,16,950 ——] Outstanding expenses 1,12,500 1,22,700 (10 Marks - Nov 2020 - Inter) ({ustrments are. given D) Ale of Stems OF Current accet Currant Wobot lity 2) Cashboot. A) Trading and PL Ae @) PFT Ae A)Resorves and Suapuce ~piviidand & paid ze __[eapsule $i) ____| The following data were provided by the accounting records of Ryan Ltd. at year-end, —— March 31, 2013: — Income Statement — z —— sales 6,98,000 ~___ |_| Cost of Goods Sold 5,20,000 ~__| | Gross Margin 1,78,000 ____| | Operating Expenses (including Depreciation Exp. of % 37,000) (1,47,000) __| 31,000 ——_ | Other Income (Expenses) _ —_] interest Expense paid (23,000) ~__ |_| Interest Income received 6,000 ___|_|Gain on Sale of Investments 12,000 ___| |Loss on Sate of Plant 3,000 (8,000) __| 23,000 —_ | Income tax (7,000) — * 16,000 | Comparative Balance Sheets | z z __| 31% March 31*March — 2013 2012 ~_|-|Assets ___| }Plant Assets 7,15,000 5,05,000 ___| Less: Accumulated Depreciation (1,03,000) (68,000) __} 6,12,000 4,37,000 —— Investments (Long - term) 1,15,000 1,27,000 —_}-| Current Assets Inventory 1,44,000 1,10,000 Accounts Receivable 47,000 55,000 Cash 46,000 15,000 Prepaid Expenses 1,000 5,000 9,65,000 7,49,000 Liabilities Share Capital 4,65,000 3,15,000 Reserves & Surplus 1,40,000 1,32,000 Bonds 2,95,000 2,45,000 Current Liabilities: Accounts Payable 50,000 43,000 Accrued Liabilities 12,000 9,000 Income Taxes Payable 3,000 5,000 9,65,000 7,49,000 Analysis of selected accounts and transactions during 2012-2013 : 1 2. 3. 4 Purchased investments for Z 78,000. Sold investments costing 7 90,000. Purchased plant assets for = 1,20,000 Sold plant assets that cost 10,000 with accumulated depreciation of % 2,000 for 5,000. Issued % 1,00,000 of bonds at face value in a exchange for plant assets on 31st March, 2013. 0 tT Repaid & 50,000 of bonds at face value at maturity. Issued 15,000 shares of 10 each. Prepare Cash Flow Statement as per AS-3 (Revised), using indirect and direct method.

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