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Financial Accounting
Practice Questions 7-20
[ Questions 1-6 are on Cash flows which are excluded from Final Examination as this topic
has been exhaustively discussed in Assignment 4 and test has been conducted in
Examination condition]
(3) Salaries & Wages for the year Rs. 30 cr. ; an advance of Rs. 1 cr. has been granted to
employees
(4) Other Expenses for the year Rs. 30 cr.; outstanding expenses Rs. 2 cr.
(5) PPE : Original cost Rs. 100 cr. Age 4 years as on 31.3.2017. Estimated scrap value Rs. 5
cr. Estimated useful life 20 years.
Depreciation is charged applying reducing balance method.
Reducing balance depreciation rate is worked out at 13.9108% ( up to four decimal places)
i.e. 1- &'!5/100
Required:
1.Prepare necessary journal entries for recording the above mentioned transaction.
2. Cash Book showing Bank A/c only
3. Trial Balance as on 31.3.2018.
[ Hints : Cash Book Balance Rs. 251.50 cr. Total of Trial Balance. Rs. 1087.61 cr.
Current Tax Rs. 9.47 Cr. Closing stock Rs. 23.90 cr.]
Question 8
1. Identification of accounting elements , debit – credit and Journal Entries
[ Based on Class work 1-3]
Balance Sheet of XYZ Company as on 31 March 2017
Assets Rs. In Cr.
Non-current Assets
PPE [ Original cost 100- Accumulated Depreciation 19) 81.00
Current Assets
Stock in Trade 50.00
Trade Receivables 40.00
Bank Balance 9.00
Total 180.00
Equity & Liabilities
Equity
Equity Share Capital 20.00
(2 cr. shares of Rs. 10 each)
Reserves & Surplus 100.00
Non-current Liabilities
Bank Loan 50.00
Current Liabilities
Trade Payables 10.00
Total 180.00
All purchases and sales were in credit. Payments were made to suppliers and payments were
collected from customers on regular basis.
At the year end Balance of Trade Payables Rs. 15 cr. and balance of Trade Receivables Rs. 50
cr.
GST on purchases is fully refundable and adjusted against GST payable on sales. Final
settlement of GST payable is pending. The company deposited GST of Rs. 25 Cr. from time
to time.
GST on goods purchased : 12%
GST on goods sold : 12%
[ GST References :
https://cleartax.in/s/gst-law-goods-and-services-tax]
(3) Salaries & Wages for the year Rs. 30 cr. ; an advance of Rs. 2 cr. has been granted to
employees
(4) Other Expenses for the year Rs. 30 cr.; outstanding expenses Rs. 5 cr.
(5) PPE : Original cost Rs. 100 cr. Age 4 years as on 31.3.2017. Estimated scrap value Rs. 5
cr. Estimated useful life 20 years.
Depreciation is charged applying straight line method.
Depreciation charge p.a. [ 100- 5]/20 = 4.75
Accumulated depreciation = Rs. 4.75 cr. x 4 = Rs. 19 cr.
Charge depreciation for 2017-18. Record necessary journal entry.
(6) Interest on bank loan @ 9% was paid in full.
(7). Tax Rate : Basic. Tax rate 30% ; Surcharge 12% ; Cess 4%
Calculate current tax and record necessary journal entry
(8) Advance Tax Rs. 15.00 cr.
Required:
1.Prepare necessary journal entries for recording the above mentioned transaction.
2. Cash Book showing Bank A/c only
3. Trial Balance as on 31.3.2018.
[ Hints : Cash Book Balance Rs. 90.86 cr. Total of Trial Balance. Rs. 924.25 cr.
Current Tax Rs. 17.39 Cr. Closing stock Rs. 59.75 cr.]
Question 9
1. Identification of accounting elements , debit – credit and Journal Entries
[ Based on Class work 1-3]
Balance Sheet of XYZ Company as on 31 March 2017
Assets Rs. In Cr.
Non-current Assets
PPE [ Original cost 100- Accumulated Depreciation 19) 152.50
Current Assets
Stock in Trade 60.00
Trade Receivables 40.00
Bank Balance 7.50
Total 260.00
Equity & Liabilities
Equity
Equity Share Capital 20.00
(2 cr. shares of Rs. 10 each)
Reserves & Surplus 140.00
Non-current Liabilities
Bank Loan 80.00
Current Liabilities
Trade Payables 20.00
Total 260.00
All purchases and sales were in credit. Payments were made to suppliers and payments were
collected from customers on regular basis.
At the year end Balance of Trade Payables Rs. 20 cr. and balance of Trade Receivables Rs. 35
cr.
GST on purchases is fully refundable and adjusted against GST payable on sales. Final
settlement of GST payable is pending. The company deposited GST of Rs. 10 Cr. from time
to time.
GST on goods purchased : 12%
GST on goods sold : 12%
[ GST References :
https://cleartax.in/s/gst-law-goods-and-services-tax]
(2) The company follows FIFO method of stock valuation.
Opening stock ( see Balance Sheet as on 31 March 2017) comprises of 6,00,000 units of
stock @ Rs. 1000 pu = Rs. 60 cr.
Record journal entry showing change in stock.
(3) Salaries & Wages for the year Rs. 30 cr. ; Outstanding wages Rs. 1 cr.
(4) Other Expenses for the year Rs. 30 cr.; Advance expenses Rs. 5 cr.
(5) PPE : Original cost Rs. 200 cr. Age 5 years as on 31.3.2017. Estimated scrap value Rs.
10 cr. Estimated useful life 20 years.
Depreciation is charged applying straight line method.
Depreciation charge p.a. [ 200- 5]/20 = 9.5
Accumulated depreciation = Rs. 9.5 cr. x 5 = Rs. 47.5 cr.
Charge depreciation for 2017-18. Record necessary journal entry.
(6) Interest on bank loan @ 9% was paid in full.
(7). Tax Rate : Basic. Tax rate 30% ; Surcharge 12% ; Cess 4%
Calculate current tax and record necessary journal entry
(8) Advance Tax Rs. 5.00 cr.
Required:
1.Prepare necessary journal entries for recording the above mentioned transaction.
2. Cash Book showing Bank A/c only
3. Trial Balance as on 31.3.2018.
[ Hints : Cash Book Balance Rs. 63.68 cr. Total of Trial Balance. Rs. 842.48 cr.
Current Tax Rs. 26.40 Cr. Closing stock Rs. 72 cr.]
Question 10
Identification of accounting and organizing into Trial Balance
Accountants of ABC Ltd. has collected the following account balances as on 31.3. 2018:
( Figures are in Rs. Cr.)
Trial Balance as on 31.3.2018
Dr. Cr.
31.3.2017
13 Lighting Expense 14
31.3.2017
10301.05 10301.05
Note -1 : PPE
[ Hints : Total Trial Balance : Rs.11008.99 cr. Tax Rs. 63.41 cr.]
Question 11
Preparation of Statement of Profit & Loss , Statement of Changes in Equity & Balance
Sheet
The following Trial Balance of ABC Ltd. has been prepared as on 31.3.2018:
31.3.2018
13 Lighting Expense 14
31.3.2018
11008.99 11008.99
Equity share are of Re. 10each ; equity shares to be issued in 2019 under ESOP : 20 cr.
Prepare Statement of Profit and Loss showing separately Other Comprehensive Income and
Basic and diluted EPS for the year ended on 31 March 2018, Statement of Changes in Equity
for the year ended on 31 March 2018 and Balance Sheet as on 31 March 2018.
[.PAT Rs. 138.06 cr. ; Other Equity. : Rs. 2068.06 cr. ; Total of Balance Sheet. :
4021.48 cr. ]
Question 12
Preparation of Statement of Profit & Loss , Statement of Changes in Equity & Balance
Sheet
Given below is the Trial Balance as on 31.3.2018 of XYZ Ltd.
Elements
31.3.2018
13 Lighting Expense 15
income
Total
Current tax has not been worked out. Compute current tax and complete the Trial Balance.
Dividend income is exempt from tax.
Equity share are of Re. 10 each ; equity shares to be issued in 2019 under ESOP : 10 cr.
Prepare Statement of Profit and Loss showing separately Other Comprehensive Income and
Basic and diluted EPS for the year ended on 31 March 2018, Statement of Changes in Equity
for the year ended on 31 March 2018 and Balance Sheet as on 31 March 2018.
[.PAT Rs. 313.24 cr. ; Other Equity. : Rs. 4018.24 cr. ; Total of Balance Sheet. : 6695
cr. ]
Question 13
Preparation of Statement of Profit & Loss , Statement of Changes in Equity & Balance
Sheet
Given below is the Trial Balance as on 31.3.2018 of XYZ Ltd.
Elements
31.3.2018
31.3.2018
income
11075.00 11075.00
Compute deferred tax benefit out of loss which can be carried forward and set off against
future profit. Carry forward is allowed for 8 years. Deferred tax benefit is worked out @ 30%
at a conservative basis. For this purpose of computation of loss dividend income is not
included.
Equity share are of Re. 10 each ; equity shares to be issued in 2019 under ESOP : 10 cr.
Prepare Statement of Profit and Loss showing separately Other Comprehensive Income and
Basic and diluted EPS for the year ended on 31 March 2018, Statement of Changes in Equity
for the year ended on 31 March 2018 and Balance Sheet as on 31 March 2018.
[. Loss after tax adjustment Rs. – 366.00 cr. ; Other Equity. : Rs. 3139 cr. ; Total of
Balance Sheet. : Rs. 5679 cr. ]
See Part III
Question 14
Profitability ratios
Question 15
Du Pont Analysis
Question 16
Leverage Impact Analysis
Question 17
Liquidity Analysis and its impact on Return on Assets
Question 18
Question 19
Consolidation
Question 20
Consolidation