Please post Answers of the Paper -1 of May-12.
Please do not post Thanks, Good , etc.... comments.
See attached question paper.
Attached File : 49658 974532 financial reporting.pdf downloaded: 254 times
Please post Answers of the Paper -1 of May-12.
Please do not post Thanks, Good , etc.... comments.
See attached question paper.
Ans:- Q1 (a)
| Sr No | Particulers | Million | Currency |
| 1 | Borrowed Sum | 12.5 | US$ |
| 2 | Interest in foreign country | 0.625 | US$ |
| 3 | Converted @ 48 | 30 | INR |
| 4 | Exchange difference (48-45)*12.5 | 38 | INR |
| 5 | Interest if borrowed in India | 62 | INR |
| 6 | Difference between interest (62-30) | 32 | INR |
| 7 | Borrowing Cost (38-32) | 6 | INR |
| Q1 (b) | |||||
| Particulers | AS per Books | AS per Tax | |||
| WDV | 999 | 777 | |||
| Depreciation Rate | 13.91% | 15% | |||
| Depr | 138.96 | 116.55 | |||
|
|||||
| DTA (138.96 - 116.55) | 22.41 | ||||
| Tax Rate | 33% | Includind Surcharge 10% | |||
| DTA (22.41 * 33%) | 7.40 | ||||
| Q1 (c) | |||
| Ans to | Particulers | Amt INR | Calculation |
| Contract Price | 2400 | Given | |
| Work Certified | 1250 | Given | |
| Estimated Cost | 1750 | Given | |
| Expected contract price | 3000 | (1250+1750) | |
| (i) | Loss | 600 | (3000-2400) |
| (ii) | % of completion | 42% | (1250/3000) |
| (iii) | Loss to be recognised | 250 | (600*42%) |
| Blance provision in C.Y. | 350 | (600-250) | |
| (iV) | Amt Due from/to customers | ||
| Amount to be received | 1000 | (2400*42%) | |
| Actual amt recd | 1100 | Given | |
| Amt Dueto customers | 100 | (1100-1000) |
| Q1 (d) | ||||
| AS-25 - Interim Financial Reporting | ||||
| As per As-25 Income Tax are assed on annual basis | ||||
|
Interim period income tax expense is calculated by applying to an interim period’s pre-tax income the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate |
||||
| Due to insufficient data INR 80,000/- should be allocated according to period | ||||
| So the Taxes for the 6Months should be added in the Profit of Six Months | ||||
| Example | ||||
| Profit as on 30-09-11 | XXXXXXXX | |||
| Add Back:- 6 Months Tax paid. | 40000 | |||
| Note 1 | Pre & Post Acqusion of Profit | |||||
| Particulars | B Ltd (Subsidiary) | C Ltd (Associate) | ||||
| Pre Acq | Post Acq | Pre Acq | Post Acq | |||
| Reserve & Surplus - Opening | - | 300 | 100 | 100 | ||
| Profit for the year | - | 120 | 80 | |||
| Total | - | 420 | 100 | 180 | ||
| A ltd | - | 420 | - | 72 | ||
| Note 2 | Computation of Goodwill / Surplus | B Ltd | C Ltd | |||
| Investment in shares of…. | 100 | 100 | ||||
| Less - Value as on date of B/s | ||||||
| Share Cap | 100 | 40 | ||||
| Pre Acqusion profit | - | 100 | ||||
| Goodwill | - | 40 | ||||
| Note 3 | Presentation of Associate | |||||
| Particulars | Amt INR | |||||
| Investment (Including G/W 8) | 100 | |||||
| Add:- Profit for the period | 72 | |||||
| Investment to be shown at | 172 | |||||
| Note :- G/W amortized over period of 5yr so balanced in G/W 40/5=8 | ||||||
| Consolidated Balance Sheet of Altd & Its Subsidiary B Ltd | ||||||
| as on 31-03-2012 | ||||||
| Liabilities | Amt INR | Asset | Amt INR | |||
| Share Capital | 400 | Investment in C Ltd | 172 | |||
| Reserve & Surplus | 1042 | (Including G/W of 8) | ||||
| (550 + 420+72) | ||||||
| Other Asset | 1800 | |||||
| Liabilities | 530 | (1000+800) | ||||
| (250+280) | ||||||
| 1972 | 1972 | |||||
| Q6 (b) | |||||||
| Note 1 | Calculation of Avg Beta | ||||||
| Year | Beta | ||||||
| 1 | 0.48 | ||||||
| 2 | 0.52 | ||||||
| 3 | 0.60 | ||||||
| 4 | 1.10 | ||||||
| 5 | 0.99 | ||||||
| Total | 3.69 | ||||||
| Avg Beta | =3.69/5 | 0.738 | |||||
| Calcutaion of Ke | Ke=Cost of Equity = ? | ||||||
| Rf=Risk Free Rate=12% | |||||||
| Ke = Rf + Beta (Rm-Rf) | Rm=Long term Mkt Rate=15.50% | ||||||
| Beta=0.738 | |||||||
| =12+0.738(15.50-12) | |||||||
| Ke= | 14.583 | After Tax | 10.93725 | ||||
| Note 2 | Clculation of Interest | ||||||
| Rate after Tax | Interest after Tax | ||||||
| S.H Fund | 740 | 10.94% | 80.94 | ||||
| Long Term | 37 | - | 4.85 | ||||
| Total Funds | 777 | 85.79 | |||||
| Calculation Of Economic Value Added | |||||||
| Particulers | Amt INR | ||||||
| PAT | 205.90 | ||||||
| Less:- Interest on SH Fund | 80.94 | ||||||
| Add:- Interest on Long Term Loan | 4.85 | ||||||
| EVA | 129.81 | ||||||
| Q6 (b) | |||||||
| Note 1 | Calculation of Avg Beta | ||||||
| Year | Beta | ||||||
| 1 | 0.48 | ||||||
| 2 | 0.52 | ||||||
| 3 | 0.60 | ||||||
| 4 | 1.10 | ||||||
| 5 | 0.99 | ||||||
| Total | 3.69 | ||||||
| Avg Beta | =3.69/5 | 0.738 | |||||
| Calcutaion of Ke | Ke=Cost of Equity = ? | ||||||
| Rf=Risk Free Rate=12% | |||||||
| Ke = Rf + Beta (Rm-Rf) | Rm=Long term Mkt Rate=15.50% | ||||||
| Beta=0.738 | |||||||
| =12+0.738(15.50-12) | |||||||
| Ke= | 14.583 | After Tax | 10.93725 | ||||
| Note 2 | Clculation of Interest | ||||||
| Rate after Tax | Interest after Tax | ||||||
| S.H Fund | 740 | 10.94% | 80.94 | ||||
| Long Term | 37 | - | 4.85 | ||||
| Total Funds | 777 | 85.79 | |||||
| Calculation Of Economic Value Added | |||||||
| Particulers | Amt INR | ||||||
| PAT | 205.90 | ||||||
| Less:- Interest on SH Fund | 80.94 | ||||||
| Add:- Interest on Long Term Loan | 4.85 | ||||||
| EVA | 129.81 | ||||||
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