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Ca final fr

GOPAL AGGARWAL (DOING NOTHING) (1339 Points)

18 March 2012

Friends looking for help in FR _of _{MP Vijay Kumar} of CA Final in the topic of Consolidation of FS

In Problem -12

It has been mentioned that “Plant machinery stood at Rs. 1,50,000/- on 01.01.03 was considered as worth for Rs. 1,80,000/- on 01.07.03 ( the date of acquisition of 80% share); this figure ios to be considered while consolidating balance sheet

Mu query is that in profit we have revered the dep. Charged on 1.5 lacs for 6 months due to revaluation but in the book for the balance 6 months depreciation has been charged on 37500/- ( 30,000 _{cost of appreciation} +7500/- _{reversal of depreciation})

But in my opinion depreciation for balance six months should have been charged on 1.8 lacs as the same is revalued figure of P&M

Please help friends

THanking Every one in Advance

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KRISHNA (CA-STUDENT) (371 Points)
Replied 18 March 2012

Problem No : 12 Pg no-547 Consolidated Financial Statements FR

a. On 1.1.03 Openeng balance 1,50,000 Rs /-

b. On 31.12.03 Closing balance 1,35,000 Rs /-

c. Rate of Depriciation is inferred as (150000-135000=15000/150000=10% p.a SLM,which is infered)

d. WDV on 1.7.03 is 150000-15000/2=1,42,500

e. But on 1.7.03 Revalued to 1,80,000 Rs/-

f. Difference on which Additional Depreciation to be provided is 1,80,000-1,42,500=37500 @ 10%for 6m i.e 1875/- Rs For 2nd half of year

Note: 1.Rate of depreciation is on Original cost, in this problem it is 150000 So for 1st half it is 7500, for 2nd half=7500

2. 2nd half has revalued to 18000,but wdv is 142500.

Cost added is 180000-142500=37500,so on cost added depreciation is 37500*10%*6/12=1875

According to u if u provide on 180000 it means, cost is 180000*10%*6/12=9000 for 2nd half But actually for 2nd half it is 7500(on original cost of 150000 for 2nd 6m)+1875(37500*10%*6/12)=9375/-

Of which 7500 has already been provided in 2nd half of FY,Now provide for 1875/-i.e from date of investment,which is a post depreciation, deduct it from post profits

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