(a) Shagun Ltd. received two different grants from State Government as per details below: (i) A...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
(a) Shagun Ltd. received two different grants from State Government as per details below: (i) A cash grant of 24 lakh was received on 31st March, 2020 towards the skill development of employees over a period of 18 months, starting from 1st April, 2020. Actual costs of the skill development program in financial year 2020-2021 was * 30 lakh and in financial year 2021-2022 was ₹20 lakh. State, how this grant should be accounted for in the books of account in financial year 2019-2020, 2020-2021 & 2021-2022? (ii) A grant of 10 lakh receivable over three years ( 5 lakh in financial year 2019-2020,2 lakh in financial year 2020-2021 and 3 lakh in financial year 2021-2022), contingent on developing 5 gardens and maintaining them for three years. The gardens are developed in financial year 2019-2020 at a total cost of 6 lakh, and the maintenance cost for financial year 2019-2020 is 12 lakh, for financial year 2020-2021 is 15 lakh and for financial year 2021-2022 is 17 lakh. Calculate the grant income and deferred income to be accounted for in the books for financial years 2019-2020, 2020-2021 & 2021-2022. (8 Marks) (b) Black Ltd. is a manufacturing company. The following balances as at 31st March, 2021 are from the audited Financial Statements and as at 30th September, 2021 & 31st March, 2022 are provided by the accountant of Black Ltd: Asset / (Liability) Attributed goodwill Intangible assets Financial assets measured at Fair Value through Other Comprehensive Income (FVTOCI) Property, plant & equipment Deferred tax assets Current assets: inventory, receivables, cash & cash equivalents Carrying Amount as at (in lakh) 31.3.2021 30.9.2021 2,560 12,680 4,310 16,820 3,120 8,640 2,560 11,080 5,260 18,670 3,120 7,040 31.3.2022 7,310 2,970 4,860 Current liabilities Non-current liabilities: Provisions Total Black Ltd. decided to sell the business on 30th September, 2021. The business meets the condition of disposal group classified as held for sale on that date in accordance with Ind AS 105. However, it does not meet the conditions to be classified as discontinued operations in accordance with Ind AS 105. Black Ltd. proposed to sell the disposal group at 26,000 lakh. The costs to sell is estimated at 200 lakh. (11,110) (13,230) (3,670) (4,610) 33,350 29,890 (16,190) (4,610) (5,660) As at 31st March, 2022, there has been no change to the plan to sell the disposal group and Black Ltd. still expects to sell it within one year of initial classification. The disposal group has not been trading well and its fair value less costs to sell has fallen to 19,738 lakh. You are asked to calculate the value of all assets / liabilities within the disposal group as at 30th September, 2021 and 31st March, 2022 in accordance with Ind AS 105. (8 Marks) (c) GOLD Ltd., a manufacturing company, prepares its financial statements on 31st March every year. On 1st April, 2021, it had issued (a) 10,00,000 ordinary shares and (b) 6% convertible bonds amounting to 1,00,000, the terms of conversion being 120 ordinary shares for every 100. On 30th June, 2021, 50,000 bonds converted to ordinary shares. The profit for the year ended 31st March, 2022 is 2,50,000. The applicable tax rate is 25%. Calculate basic and diluted EPS. Ignore the need to split the convertible bonds into liability and equity element. (4 Marks) (a) Shagun Ltd. received two different grants from State Government as per details below: (i) A cash grant of 24 lakh was received on 31st March, 2020 towards the skill development of employees over a period of 18 months, starting from 1st April, 2020. Actual costs of the skill development program in financial year 2020-2021 was * 30 lakh and in financial year 2021-2022 was ₹20 lakh. State, how this grant should be accounted for in the books of account in financial year 2019-2020, 2020-2021 & 2021-2022? (ii) A grant of 10 lakh receivable over three years ( 5 lakh in financial year 2019-2020,2 lakh in financial year 2020-2021 and 3 lakh in financial year 2021-2022), contingent on developing 5 gardens and maintaining them for three years. The gardens are developed in financial year 2019-2020 at a total cost of 6 lakh, and the maintenance cost for financial year 2019-2020 is 12 lakh, for financial year 2020-2021 is 15 lakh and for financial year 2021-2022 is 17 lakh. Calculate the grant income and deferred income to be accounted for in the books for financial years 2019-2020, 2020-2021 & 2021-2022. (8 Marks) (b) Black Ltd. is a manufacturing company. The following balances as at 31st March, 2021 are from the audited Financial Statements and as at 30th September, 2021 & 31st March, 2022 are provided by the accountant of Black Ltd: Asset / (Liability) Attributed goodwill Intangible assets Financial assets measured at Fair Value through Other Comprehensive Income (FVTOCI) Property, plant & equipment Deferred tax assets Current assets: inventory, receivables, cash & cash equivalents Carrying Amount as at (in lakh) 31.3.2021 30.9.2021 2,560 12,680 4,310 16,820 3,120 8,640 2,560 11,080 5,260 18,670 3,120 7,040 31.3.2022 7,310 2,970 4,860 Current liabilities Non-current liabilities: Provisions Total Black Ltd. decided to sell the business on 30th September, 2021. The business meets the condition of disposal group classified as held for sale on that date in accordance with Ind AS 105. However, it does not meet the conditions to be classified as discontinued operations in accordance with Ind AS 105. Black Ltd. proposed to sell the disposal group at 26,000 lakh. The costs to sell is estimated at 200 lakh. (11,110) (13,230) (3,670) (4,610) 33,350 29,890 (16,190) (4,610) (5,660) As at 31st March, 2022, there has been no change to the plan to sell the disposal group and Black Ltd. still expects to sell it within one year of initial classification. The disposal group has not been trading well and its fair value less costs to sell has fallen to 19,738 lakh. You are asked to calculate the value of all assets / liabilities within the disposal group as at 30th September, 2021 and 31st March, 2022 in accordance with Ind AS 105. (8 Marks) (c) GOLD Ltd., a manufacturing company, prepares its financial statements on 31st March every year. On 1st April, 2021, it had issued (a) 10,00,000 ordinary shares and (b) 6% convertible bonds amounting to 1,00,000, the terms of conversion being 120 ordinary shares for every 100. On 30th June, 2021, 50,000 bonds converted to ordinary shares. The profit for the year ended 31st March, 2022 is 2,50,000. The applicable tax rate is 25%. Calculate basic and diluted EPS. Ignore the need to split the convertible bonds into liability and equity element. (4 Marks)
Expert Answer:
Related Book For
Government and Not for Profit Accounting Concepts and Practices
ISBN: 978-1118155974
6th edition
Authors: Michael H. Granof, Saleha B. Khumawala
Posted Date:
Students also viewed these accounting questions
-
State whether the following changes should be accounted for and, if so, whether retrospectively or prospectively, in accordance with IAS 8: (a) A change in accounting policy made voluntarily. (b) A...
-
Describe how the following occurrences should be accounted for based on the fact pattern presented: a. Certain amounts of spoilage and waste are normal in the production system and affect all jobs....
-
What characteristic determines whether an activity should be accounted for in a special revenue fund or in a permanent fund?
-
Drag and drop the protocols from the bank to their respective layer on the OSI and TCP/IP Model. Not every layer will have protocols associated with it. Protocols TCP/IP Model OSI Model Application...
-
The stockholders equity accounts of Ashley Corporation on January 1, 2012, were as follows. Preferred Stock (8%, $50 par, cumulative, 10,000 shares authorized)..... $ 400,000 Common Stock ($1 stated...
-
Pascale Corp. has the following securities (all purchased in 2017) in its investment portfolio on December 31, 2017: 2,500 Anderson Corp. common shares, which cost $48,750; 10,000 Munter Ltd. common...
-
Inflation (how much your money will buy) and interest rates (how much your money will earn if saved) are connectedand both of these economic factors should be considered in your financial planning,...
-
Comparative financial statements for Heritage Antiquing Services for the fiscal year ending December 31 appear below. The company did not issue any new common or preferred stock during the year. A...
-
You have been asked by an investor to value a restaurant using discounted cash flow valuation. For the current year, the restaurant earned pretax operating income of $750,000. Income has grown 2%...
-
The file TRAFFIC2.RAW contains 108 monthly observations on automobile accidents, traffic laws, and some other variables for California from January 1981 through December 1989. Use this data set to...
-
Despite the geographic, economic, social and population differences among states, evaluatewhystates aresimilar in their basic governmental structure?
-
Question 1: (Marks 10-CLO2) . . . . . High Level . Sensor Figure 1 The system shown in Figure 1 represents a PLC controlled grain transfer system. The conveyor can run in either direction as shown by...
-
Assume that a Kia automobiles dealership in Mehrauli, Gurugram transshipped 300 Kia Sonet cars from South Korea at a cost of Rs. 13 lakhs per car in September 2019. By March 31, 2020, they were able...
-
The assemble-it-yourself furniture chain IKEA has developed its corporate culture from its Swedish roots, which not only shape the brand identity, but also stimulate designs - including the very idea...
-
A convertible bond issued has the following characteristics. Please calculate (1) minimum value and (2) market conversion premium. Maturity = 12 years Coupon rate = 7% Coupon payment twice a year...
-
Provide a branding strategy over the next five (5) years to build "brand equity." Brand building period - over the next 5 years Target market - Men, women and children under 40 years of age in...
-
A company's beta is 1.79. The risk-free rate is 3.5% and the market risk premium is 6.9%. What is the cost of equity according to the CAPM?
-
Juarez worked for Westarz Homes at construction sites for five years. Bever was a superintendent at construction sites, supervising subcontractors and moving trash from sites to landfills. He...
-
Why might analysts be concerned if a government has an unusually high ratio of intergovernmental revenues to total revenues relative to a comparable government? Why might they be concerned if the...
-
In the year a road maintenance district was established, it engaged in the transactions that follow involving capital assets (all dollar amounts in thousands). The district maintains only a single...
-
A city is considering whether and how it should include the following associated organizations in its reporting entity. 1. Its school system, although not a legally separate government, is managed by...
-
Some liabilities are reported at their maturity amount. In general, when should liabilities, prior to the maturity date, be reported at less than their maturity amount?
-
In evaluating a balance sheet, some creditors say the liability section is one of the most important sections. What are some reasons justifying this position?
-
Compute the present value of a \(\$ 10,000\), one-year note payable that specifies no interest, although \(10 \%\) would be a realistic rate. Is the present value less than, greater than, or equal to...
Study smarter with the SolutionInn App