suggested solution - j.k. shah classesprelims)(fnj4018).pdf · statement of calculation of average...
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SUGGESTED SOLUTION
FINAL NOV. 2014 EXAM
FINANCIAL REPORTING
Prelims (Test Code - F N J 4 0 1 8)
Head Office : Shraddha, 3rd Floor, Near Chinai College, Andheri (E), Mumbai – 69.
Tel : (022) 26836666
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Ans. 1
(a) Computation of EPS 1. Basic EPS
Particulars
Net profit for the year `5,00,00,000
No. of equity shares 1,00,00,000
Basic EPS `5
2. Diluted EPS
Particulars Year ended 31st March 2012
Net profit for the year `5,00,00,000
Add: Interest on debentures (1,25,000 100 11%) `13,75,000
Less: Tax saving on interest on debentures `4,12,500
Net profit attributable to equity shareholders after considering effects of dilution.
`5,09,62,500
No. of equity shares after considering effect of dilution (1,00,00,000) (1,25,000 8)
1,10,00,000
Diluted EPS `4.63 (approx.)
(b) As per AS 30 on 'Financial Instruments Recognition and Measurement', Financial Instrument is
any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. M/s Naresh Ltd. always settles the account by delivery. In case the account is always settled by delivery then there is no option, involved in it. In that case it will not be treated as a financial instrument under AS 30.
(c)
Capital base `1,00,00,000
Actual profit `11,00,000
Target profit @ 12.5% `12,50,000
Expected profit on employing the particular executive `12,50,000 `2,50,000
`15,00,000
Additional profit Expected profit Actual profit
`15,00,000 `11,00,000 `4,00,000
Maximum bid price Additional profit/(Rate of ROI)
400000/12.5 100 `32,00,000
Maximum salary that can be offered 12.5% `32,00,000 `4,00,000
Therefore, maximum salary offered to that particular executive would be `4 lakhs.
(d)
1. Bad debts for third quarter (Q3) will be `40,000. Mohan Ltd. has recognised `20,000 (50% of `40,000) in Q3. Hence, `20,000 is to be deducted from `7,20,000.
2. Treatment adopted is correct. 3. Treatment adopted is correct.
Thus, the quarterly income would be `7,00,000 (`7,20,000 `20,000).
Ans. 2 (a)
1. Statement of calculation of average capital employed (`'000)
Item 31.3.2012 31.3.2013 31.3.2014
Goodwill (since goodwill has paid for, it is included) 2,000 1,600 1,200
Building & Machinery (revalued assumed after depreciation)
3,600 4,000 4,400
Inventories (revalued) 2,400 2,800 3,200
Sundry debtors 40 320 880
Cash and bank 240 400 800
Total Assets 8,280 9,120 10,480
Less: Sundry creditors (1,200) (1,600) (2,000)
Closing capital employed (A) 7,080 7,520 8,480
Opening capital employed (B) 7,320 7,080 7,520
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Average capital employed (A B)/2 7,200 7,300 8,000
2. Statement of calculation of super profit: (`'000)
Item 31.3.2012 31.3.2013 31.3.2014
Net profit per question 840 1,240 1,640
Less: Opening balance (240) (280) (320)
600 960 1,320
Adjustments
Add: Undervaluation of stock 400 400 400
Less: Adjustment for valuation in opening stock - (400) (400)
Add: Goodwill written off - 400 400
Add: Transfer to reserves 400 400 400
Maintainable profit (A), 1,400 1,760 2,120
Less: Normal return (12.5% on average capital) (B) (900) (912.5) (1,000)
Super profit (A B) 500 847.5 1,120
Average super profit (500 847.5 1120)/3 822.5
3. Statement of valuation of goodwill
Goodwill 5 years purchase of super profit as in 2 above. 5 `8,22,500 `41,12,500 4. Statement of valuation of business (`'000)
Total net assets (31.3.2014) 8,480
Less: Goodwill (1,200)
7,280
Adsd: Goodwill as in 3 above 4,112.5
Value of business 11,392.5
Hence value of business works out to `1,13,92,500
(b)
1. Statement of capital employed
Item `in crores
Share capital 1600.00
Reserves & surplus 3200.00
Shareholders' funds 4800.00
Debt fund - long term debt 320.00
Capital employed 5120.00
2. Statement of calculation of cost of debt (post tax)
Item `in crores
Total debt 320.00
Interest @ 10% 32.00
Less: Tax rate 30%
Post tax cost of debt
(1 0.30) 32/320 7%
3. Statement of calculation of cost of equity
Item %
Cost of equity Risk free rate Beta (market rate of return risk free rate) 10% 1.05 (14 10)
14.2%
4. Statement of calculation of WACC (weighted average cost of capital)
Item `in crores
Total shareholders' funds 4800
Cost of equity 14.2%
Total debt 320
Cost of debt (net of tax) 7%
Weighted average cost of capital (WACC)
((4800 14.2%) (320 7%))/(4800 320) 13.75%
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5. Statement of calculation of Economic Value Added:
Item `in crores
Profit before interest and tax 1432.00
Tax @ 30% (429.60)
Net Operating Profit After Tax (A) 1002.40
Capital employed WACC (5120 13.75%) (B) (704.00)
Economic value added (A B) 298.40
Ans. 3
Consolidated Balance Sheet of Stars Ltd and its subsidiary Mars Ltd as at 31st March, 2010
Particulars Note no. Amount (`)
I. Equity and Liabilities
1. Shareholder's funds
(i) Share capital 1 1,20,000
(ii) Reserves and surplus 2 62,080
2. Minority Interest (WN4) 29,520
3. Non-current liabilities -
Long-term borrowing
4. Current liabilities 3 14,000
Trade payables
Total 2,25,600
II. Assets
1. Non-current assets
(i) Fixed Assets
Tangible assets 4 1,19,600
Intangible assets
(ii) Non-current investments
2. Current assets
(i) Inventories 5 50,000
(ii) Trade receivables 6 35,000
(iii) Cash and cash equivalent 7 21,000
Total 2,25,600
Notes on Accounts
SI No.
Particulars Amount (`)
Amount (`)
1. Share capital
Authorised, Issued and paid up
12,000 equity shares of `10 each fully paid up 1,20,000
2. Reserves & surplus
Capital reserve (WN 3) 19,200
General reserve (WN 6) 24,800
Profit & Loss A/c (WN 5) 18,080 62,080
3. Current liabilities
Trade Payable
Star Ltd 4,000
Mars Ltd 7,000
11,000
Less: mutual Indebtedness (2,000) 9,000
Bills payable:
Star Ltd 2,000
Mars Ltd 5,000
7,000
Less: mutual Indebtedness (2,000) 5,000 14,000
4. Tangible assets
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Star Ltd 44,000
Mars Ltd (84000 12000 3600) 75,600 1,19,600
5. Inventories
Star Ltd 10,000
Mars Ltd 40,000 50,000
6. Trade receivable
Star Ltd 6,000
Mars Ltd (`15000 `2000 cheque In transit) 13,000
19,000
Less: mutual Indebtedness (2,000) 17,000
Bills receivable
Star Ltd 4,000
Mars Ltd 16,000
20,000
Less: mutual Indebtedness (2,000) 18,000 35,000
Cash and Cash equivalents
Star Ltd 6,000
Mars Ltd 13,000 19,000
Remittance in transit 2,000 21,000
Working Notes: 1. Group structure
Star Ltd.
Share in Mars Ltd Share in minorities in Mars Ltd 80% 20%
2. Analysis of profits of Mars Ltd
Capital Profits Revenue Reserve
Revenue Profits
` ` ` `
i. General Reserve as on 1.4.2007 30,000
Less: Bonus issue (1/10 of `2,00,000) (20,000) 10,000 - -
ii. Increase in General Reserve (annual transfer of `2,000 for 3 years) (`36,000 `30,000)
6,000
iii. Profit and Loss Account balance as on 1.4.2007
16,000
Less: Dividend paid for the year 2007-2008 (10,000) 6,000
iv. Increase in Profit (`20,000 `6,000) 14,000
v. Loss on revaluation [(84,000 100/70 i.e. 1,20,000) 1,08,000]
(12,000)
vi. Additional depreciation written back (10% `12000) 3
3,600
4,000 6,000 17,600
Star Ltd's share (80%) 3,200 4,800 14,080
Minority Interest (20%) 800 1,200 3,520
3. Cost of Control
` `
Cost of investments in Mars Ltd. 88,000
Less: Dividend of capital profits (8,000) 80,000
Less: face value of investment (including bonus shares)
(80000 80000 1/5)
96,000
Capital profit 3,200 99,200
Capital reserve 19,200
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4. Minority Interest
`
Equity share capital including bonus share (20000 20000 1/5) 24,000
Capital profits 800
Revenue reserve 1,200
Share of revenue profit 3,520
29,520
5. Profit and Loss Account - Star Ltd.
` `
Balance 12,000
Less: Dividend credited to investment (8,000)
4,000
Add: Share in Mars Ltd 14,080
18,080
6. General reserve - Star Ltd.
`
Balance 20,000
Add: Share in Mars Ltd. 4,800
24,800
Tutorial note: With regards to Bills receivable of Star Ltd it may be alternatively assumed that out of bills of Star Ltd accepted by Mars Ltd `2,000, `1,500 have been discounted. In such case, only `500 will be deducted as mutual indebtedness from bills receivable and bills payable in the balance sheet instead of `2,000.
Ans. 4 (a)
Gross Value Added Statement of German Ltd For the year ended 31st March 2014
Item ` lakhs ` lakhs
Sales 5,010
Less: Cost of raw materials, stores and other service Consumed 2,720
Administrative expenses 125
Interest on loan from bank for working capital 35 (2,880)
Value added by manufacturing and trading activities 2,130
Add: Other Income 130
Gross Value Added 2,260
Application of Value Added
Item `in lakhs `in lakhs %
To pay employees
Wages, salaries-and bonus 610 26.99
To pay directors
Salaries and commission to directors 60 2.66
To pay Government
Local taxes including cess 220
Income tax 280 500 22.12
To pay providers of capital
Interest on debentures 200
Preference dividend 100
Equity dividend 300 600 26.55
To provide for maintenance and
Expansion of the company
Depreciation 370
Transfer to general reserve 100
Retained profit `(60 40) lakhs 20 490 21.68
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Total application of value added 2,260 100.00
Statement of reconciliation between Gross Value Added with Profit before Taxation
Item `
in lakhs `
in lakhs
Profit before taxation 800
Add back:
Wages, salaries and bonus 610
Salaries and commission to directors 60
Local taxes including cess 220
Depreciation 370
Interest on fixed loan 200 1,460
Gross Value Added 2,260
(b)
Accounting entries in 2013-14
Date Particulars Dr. ` Cr. `
31.12.13 Investment in X Ltd (5000 `40) Dr. 2,00,000
Investment in Y Ltd (4000 `60) Dr. 2,40,000
To Bank A/c 4,40,000
(Being investment acquired from X Ltd and Y Ltd)
31.03.14 Profit & Loss A/c (5000 `2) Dr. 10,000
To Investment in X Ltd 10,000
(Being the reduction in value of investment in X Ltd)
31.03.14 Investment in Y Ltd (4000 `4) Dr. 16,000
To Unrealised appreciation reserve A/c 16,000
(Being the increase in value of investment in Y Ltd given effect)
Accounting entries in 2014-15
Date Particulars Dr. ` Cr. `
01.04.14 Unrealised Appreciation reserve A/c Dr. 16,000
To Investment in Y Ltd 16,000
(Being the increase in value of investment in Y Ltd now reversed)
30.06.14 Bank A/c (5000 `37) Dr. 1,85,000
Profit & Loss A/c (5000 `1) Dr. 5,000
To Investment in X Ltd (5000 `38) 1,90,000
(Being the investment in X Ltd sold and loss on sale charged to Profit & Loss A/c)
30.06.14 Bank A/c (4000 `67) Dr. 2,68,000
To Investment in Y Ltd (4000 `60) 2,40,000
To Profit & Loss A/c (4000 `7) 28,000
(Being the investment in Y Ltd sold and profit on sale credited to Profit & Loss A/c)
Ans. 5
1. Statement of valuation of Goodwill
` Akbar Ltd.` ` Birbal Ltd. `
(i) Capital employed
Sundry assets as per Balance Sheet
17,10,000 7,30,000
Less: Preliminary expenses 10,000 -
Non-trade investment 2,00,000 2,10,000 50,000 50,000
15,00,000 6,80,000
Less: Sundry liabilities
12% debentures 1,00,000 1,00,000
Sundry creditors 40,000 45,000
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Provision for taxation 1,00,000 (2,40,000) 60,000 (2,05,000)
Capital employed (A) 12,60,000 4,75,000
(ii) Average pre-tax profit
2008 5,00,000 1,50,000
2009 6,50,000 2,10,000
2010 5,75,000 1,80,000
Total Profit 17,25,000 5,40,000
Simple average 5,75,000 1,80,000
Less: Non-trading income 50,000 9,000
5,25,000 1,71,000
Capitalised value of average Profit (B)
(5,25,000 /20) 100
26,25,000
(1,71,000 /20) 100
8,55,000
Goodwill (B A ) C 13,65,000 3,80,000
2. Statement of intrinsic value per share
` Akbar Ltd
`
` Birbal Ltd. `
Goodwill as in W.N.I above 13,65,000 3,80,000
Sundry other assets 17,10,000
Less: Preliminary expenses 10,000 17,00,000 7,30,000
30,65,000 11,10,000
Less: Sundry Liabilities
12% debentures 1,00,000 1,00,000
Sundry creditors 40,000 45,000
Provision for taxation 1,00,000 2,40,000 60,000 2,05,000
Net asset value (X) 28,25,000 9,05,000
Number of shares (Y) 70,000 25,000
Intrinsic value per share (X/Y) `40.40 `36.20
3. Statement of Purchase consideration
Particulars Amount `
25000 shares @ `36.20 9,05,000
To be discharged by 22400 shares (25000 36.20/40.40) @ `40.40 9,04,960
Cash for fraction 40
Balance Sheet of Akbar Ltd. (after merger with Birbal Ltd.)
As at 1.1.2011
Particulars Note No. Amount `
III. Equity and Liabilities
(1) Shareholder's funds
(i) Share capital 1 9,24,000
(ii) Reserves and surplus 2 14,80,960
(2) Non-current liabilities
Long-term borrowings 3 2,00,000
(3) Current liabilities
Trade Payable 4 2,45,000
Total 28,49,960
IV. Assets
(1) Non-current assets
(i) Fixed Assets
Tangible assets (950000 400000) 13,50,000
Intangible assets Goodwill (905000 525000) 3,80,000
(ii) Non-current investments (200000 50000) 2,50,000
(iii) Other Non-current assets 5 40,000
(2) Current assets
Inventories (120000 50000) 1,70,000
Trade Receivables (75000 80000) 1,55,000
Cash and bank (275000 130000 40) 4,04,960
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Other current assets 6 1,00,000
Total 28,49,960
Notes on Accounts
SL No.
Particulars Amount (`)
Amount (`)
1. Share capital
Issued and paid up
92,400 equity shares of `10 each (of which 22,400 shares were issued to the vendors otherwise than cash)
9,24,000
2. Reserves and Surplus
General reserve 3,50,000
P&L A/c 2,10,000
Add: proposed dividend written off 1,40,000
Less: preliminary expenses written off (10,000) 3,40,000
Share premium 6,80,960
Export profit reserve
Balance 70,000
Add: Balance of Birbal Ltd. 40,000 1,10,000 14,80,960
3. Long term borrowings
12% debenture balance 1,00,000
Add: 12% debentures issued at par other than Cash 1,00,000 2,00,000
4. Trade Payable
Sundry-creditors balance 40,000
Add: liabilities taken over 45,000 85,000
Provision for tax 1,00,000
Add: Provision for tax of Birbal Ltd. 60,000 1,60,000 2,45,000
5. Other non-current assets
Amalgamation adjustment a/c 40,000
6. Other current assets
Advance Tax (80000 20000) 1,00,000
Ans. 6
(a)
Item
Amount of advance
`
Provision
%
Provision Amount
`
Standard assets 10,000 0.25% 25
Sub-standard assets 1,000 10% 100
Secured portion of doubtful debts
- Up to one year 160 20% 32
- One year to three years 70 30% 21
- More than three years 20 100% 20
Unsecured portion of doubtful debts 90 100% 90
Loss assets 30 100% 30
Total provision to be made 318
(b)
Year 1 Employee compensation expense A/c Dr. 13,69,010
To Stock Options Outstanding A/c 13,69,010
(Being compensation expense recognized in respect of the ESOP)
Year 2 Employee compensation expense A/c Dr. 11,22,740
To Stock Options Outstanding A/c 11,22,740
(Being compensation expense recognized in respect of the ESOP)
Year 3 Employee compensation expense A/c Dr. 12,88,250
To Stock Options Outstanding A/c 12,88,250
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(Being compensation expense recognized in respect of ESOP)
Year 5 Bank A/c@ `50 Dr. 30,00,000
Stock Options Outstanding A/c @ `15 Dr. 9,00,000
To Share Capital A/c @ `10 6,00,000
To Securities Premium A/c @ `55 33,00,000
(Being shares issued to the employees against the options vested in them in pursuance of the Employee Stock Option Plan)
Bank A/c @ `50 Dr. 90,00,000
Stock Options Outstanding A/c @ `15 Dr. 27,00,000
To Share Capital A/c @ `10 18,00,000
To Securities Premium A/c @ `55 99,00,000
(Being shares issued to the employees against the options vested in them in pursuance of the Employee Stock Option Plan)
Stock Options Outstanding A/c Dr. 1,80,000
To General Reserve 1,80,000
(Being the balance standing to the credit of the Stock Options Outstanding Account, in respect of vested options expired unexercised, transferred to the general reserve)
Working Notes: 1. The enterprise estimates the fair value of the options expected to vest at the end of the
vesting period as below: No. of options expected to vest 300 1,000 0.97 0.97 0.97 2,73,802 options
Fair value of options expected to vest 2,73,802 options `15 `41,07,030 2. As the enterprise still expects actual forfeitures to average 3 per cent per year over the 3-
year vesting period, therefore, it recognizes `41,07,030/3 towards the employee services. 3. The revised number of options expected to vest
2,49,175 (3,00,000 0.94 0.94 0.94). The fair value of revised options expected to vest `37,37,625 (2,49,175 `15). The expense to be recognised during the year is determined as below: Revised total fair value `37,37,625 Revised cumulative expense at the end of year 2
(`37,37,625 2/3) `24,91,750 Less: Expense already recognised in year 1 `13,69,010 Expense to be recognised in year 2 `11,22,740
4. The expense to be recognised during the year is determined as below:
No. of options actually vested 840 300 2,52,000 Fair value of options actually vested (`2,52,000 `15) `37,80,000 Expense already recognized `24,91,750 Expense to be recognised in year 3 `12,88,250
Ans. 7
(a) 1. Growth funds
- Invest major parts of their corpus in equity instruments and exposed to higher risks. - These schemes are expected to provide higher returns in the form of dividends and
capital appreciation. 2. Income funds
- Invest in fixed income debt instruments e.g. corporate debentures, government securities and money market instruments and called debt funds
- Provide steady flow of comparatively low returns for lower risks.
(b) The Qualitative characteristics of financial statements are: 1. Understandability 2. Relevance 3. Reliability
- Faithful representation - Substance over form
- Neutrality - Prudence
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- Completeness 4. Comparability These are explained below in brief : 1. Understandability: One of the principal characteristics of the financial statements is to
ensure understandability such that these documents are comprehensible by various user communities like investors, government agencies etc.
2. Relevance: The financial statements need to ensure relevance for decision making needs of the users. Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming or correcting their past evaluations.
3. Reliability: These statements need to be reliable, free from any material errors of omission and commission and bias. The information appended therein can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent. Reliability presupposes the following constituents: Faithful representation Information must depict faithfully the transactions it purports to represent in order to be reliable. There is always a risk that this may not necessarily hold true sometimes owing to inherent difficulties in identifying the transactions or an appropriate method of measurement or presentation. Substance over form Transactions and other events are accounted for and presented in accordance with their substance and economic reality and not merely their legal form. Faithful representation can only be possible if accounting of a transaction is according to its substance and economic reality, and not its legal form. Neutrality Information needs to be free from bias to be reliable. Neutrality is lost if the financial statements are prepared with a view to influence the user to make a judgment or decision in order to achieve a predetermined outcome. Prudence Prudence pre-supposes recognition of uncertainties in reporting through adequate disclo-sures. However, it may be borne in mind that prudence does not allow creation of hidden reserves or excessive provisions, understatement of assets or income or overstatement of expenses and liabilities. Completeness Financial information must be complete, within the restrictions of materiality and cost to be reliable. Omission may cause information to be misleading. Comparability: The financial statements need to stand on robust and consistent accounting policies to ensure that these are comparable between accounting periods within the entity as also between entities in the same industry. Users must be able to compare the financial statements I. through time to identify trends II. with other enterprise's statements, to evaluate their relative financial position, perfor-
mance and changes in financial position Consistency of treatment of accounting policies and effective disclosures of the same is particularly important to ensure effective comparability However, comparability is not the same as uniformity. Enterprises should change accounting policies if they become inappropriate over time to take care of business dynamics.
(c) The present case relates to the concept of ‘by-products’ under as 2 on ‘valuation of inventories’.
As per AS 2, where by-products, scrap or waste materials, by their nature, are immaterial, they may be measured at net realizable value and this value is deducted from the main product. Hence, the opinion of the auditor is correct that the by-products are inventory of the company and it should be valued at net Realizable value and brought into books of account.
(d) Computation of Deferred Tax Asset / Liability
Year
2006 `
2007 `
2008 `
Accounting Profit (a) 11,00,000 16,00,000 21,00,000
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Income tax profit (b) 7,00,000 18,00,000 23,00,000
Difference in (a) & (b) 4,00,000 2,00,000 2,00,000
Tax rate 35% 35% 35%
Deferred Tax Liability (DTL) 1,40,000 - -
Deferred tax asset (DTA) - 70,000 70,000
Cumulative DTL/(DTA) 1,40,000 70,000 Nil
(e) A callable convertible debenture is one that gives the issuer, a right to buy a convertible
debenture from the debenture holder at a specified price. This feature ill effect is a call option written by the debenture holder. The value of call (i.e., option premium) is payable by the issuer. Liability component of non-convertible debentures (disregarding the call value) `57 Less: Value of call payable by the issuer `2 Net liability component of non-convertible debentures `55 Equity component in callable convertible debentures `60 `55 `5
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MARKS ALLOCATION SHEET
Que. No.
Sub point No.(if any)
Name of Chapter Description of Concept Mark Allocation
Total Marks
1 (a) AS-20 Computation of basic EPS 2
1 (a) AS-20 Computation of diluted EPS 3 5
1 (b) As-30 Provision 2
1 (b) As-30 Analysis 1
1 (b) As-30 Conclusion 2 5
1 (c) Human resource Accounting
Compotation of target profit 1
1 (c) Human resource Accounting
Computation of expected profit 1
1 (c) Human resource Accounting
Computation of additional profit 1
1 (c) Human resource Accounting
Computation of maximum bid price 1
1 (c) Human resource Accounting
Computation of maximum salary 1 5
1 (d) AS-25 Treatment of case (1) 2
1 (d) AS-25 Treatment of case (2) 1
1 (d) AS-25 Treatment of case (3) 1
1 (d) AS-25 Computation of quarterly income 1 5
2 (a) Valuation of business Computation of average capital employed 4
2 (a) Valuation of business Computation of super profit 3
2 (a) Valuation of business Computation of good will 1
2 (a) Valuation of business Computation of value of business 2 10
2 (b) Economic value added Calculation of capital employed 1.5
2 (b) Economic value added Calculation of cost of debt 1
2 (b) Economic value added Calculation of equity 1
2 (b) Economic value added Calculation of WACC 0.5
2 (b) Economic value added Calculation of EVA 2 6
3 - Consolidated financial statement
Preparation of consolidated balance sheet 6
3 - Consolidated financial statement
Analysis of profit of mars ltd 3
3 - Consolidated financial statement
Computation of cost of control 2
3 - Consolidated financial statement
Computation of minority interest 2
3 - Consolidated financial statement
Analysis of profit and loss of star ltd. 2
3 - Consolidated financial statement
Analysis of general reserve of sun ltd. 1 16
4 (a) VAS Computation of gross value added 3
4 (a) VAS Computation of value applied 4
4 (a) VAS Reconciliation 3 10
4 (b) Mutual fund Entry for investment acquired 1
4 (b) Mutual fund Entry for reduction in valve of investment in x ltd.
1
4 (b) Mutual fund Entry for increase in valve of investment in y ltd.
1
4 (b) Mutual fund Entry for in valve of investment in y ltd. now reversed
1
4 (b) Mutual fund Entry for sale of in valve of investment in x Ltd.
1
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4 (b) Mutual fund Entry for sale of in valve of investment in y Ltd.
1 6
5 - Corporate restructuring
Calculation of good will of akbar ltd & birbal Ltd
6
5 - Corporate restructuring
Calculation of intrinsic value share of akbar Ltd & birbal Ltd.
3
5 - Corporate restructuring
Calculation of purchase consideration 2
5 - Corporate restructuring
Preparation of balance sheet 5 16
6 (a) NBFC Provision for standard ass.ets 0.5
6 (a) NBFC Provision for sub standard ass.et 0.5
6 (a) NBFC Provision for doubtful ass et 2
6 (a) NBFC Provision for loan ass et 0.5
6 (a) NBFC Total provision 0.5 4
6 (b) ESOP Computation of fair value of expense at the and of vesting period
2
6 (b) ESOP Calculation of expense recognized in year 2 & 3
4
6 (b) ESOP Journal entries 6 12
7 (a) Mutual fund 2 points of both types of funds 4 4
7 (b) Corporate financial reporting
Characteristics any-4 points 4 4
7 (c) AS-2 Provision 1.5
7 (c) AS-2 Analysis 0.5
7 (c) AS-2 Conclusion 2 4
7 (d) AS-22 Computation of deferred tax ass et 3
7 (d) AS-22 Computation of deferred tax liability 1 4
7 (e) AS-30 Provision 1.5
7 (e) AS-30 Calculation of liability component 2
7 (e) AS-30 Calculation of equity component 0.5 4