5th semester B.Com second internal examination

BC5 B10 FINANCIAL REPORTING

(40 marks)

Very Short answer question and each question Carrey 1 mark

1. What do you mean by carrying amount?
2. What is deferred tax liability?
3. What is termination benefit?

Short answer question and each question Carrey 2 mark (2*3 =6)

4. Define borrowing cost?
5. Define contingent liability?
6. Define impairment?

Short essay question, answer any four and each question Carrey 4 mark (4*4=16)

7. An entity owns a fleet of vehicle that uses to deliver its products. At the end of 2015-16, a partticuler track has a carrying amount of Rs 90,000 (Original cost- Rs1,90,000 Accumulated depreciation Rs 1,00,000). The original estimate of useful life of the truck is 7years and it has an estimated residual value of Rs 50,000. Because of law fuel efficiency of the truck, the entity has decreased the usage of the truck, market value of similar trucks in an active resale value of market is 60,000. Licenses and tittle fees associated with selling truck are Rs 2,000. Is there any external or internal indicator for impairment, if so, find amount of impairment loss to recognize and record the same?
8. The following information applies to Real World Ltd for the year ended 31st March 2016.
a) Purchased of merchandise for sale Rs 8,00,000
b) Merchandise return to vender Rs 75,000
c) Interest on note payable to venders Rs 1,80,000
d) Freight in on merchandise Rs 2,50,000
Inventory cost of the company for the year ended 31st March 2016 will be?
9. A company grants 2,000 share options to each of its three directors on 1st April 2016, subject to the directors being employed on 31st March 2018. The options vest on 31st March 2018. The fair value of each options on 1st April 2016 is Rs 100, and it is anticipated that on 1st April 2016 all of the share option will vest on 30 March 2018. The options will only vest if the company’s share price reaches Rs 140 per share. The share price at 31 March 2016 is Rs 80 and it is not anticipated that it will rice over the next two years. It is anticipated that on 31 March 2016 only two directors will be employed on 31 March 2018.
How will the share options be treated in the financial statements for the year ended 31 March 2016?
10. Briefly state objective, scope, measurement and recognition and disclosure requirement under Ind AS 12 (IAS 12)?
11. Explain the two different indications of possible impairment?

Long essay question, answer any one of the following question (1* 15= 15)

13. Elaborate the various methods used for the valuation of inventories?
14. Neerav Ltd. has a building under construction that is being financed with Rs 80,00,000 of debt, Rs 60,00,000 of which is a construction loan directly on the building. The rest is financed out of the general debt of the company. The company will use the building when it is completed. The debt structure of the firm is as follows:
Construction loan @ 11% 60,00,000
Long term debenture @ 9% 90,00,000
Long term subordinated debentures @10% 30,00,000
The debentures and subordinated debentures were issued at the same time. Calculated the following:
a. The interest payable during the year.
b. The capitalist interest cost to be recorded as an asset on the statement financial position, according to Ind AS 23.
c. The amount of interest expense that should be reported on the statement of comprehensive income.