Question No. 1 is compulsory. Answer any four questions from the remaining five questions. Wherever necessary, suitable assumptions may be made and indicated in answer by the candidates. Working Notes should form part of the answer. Answer the following questions:
Sub-questions (4)
Glen Ltd. began construction of a new building on 1st January, 2022. On 1st April, 2022, following two loans were obtained to fund the construction cost: (i) Loan of ₹60,00,000 from Data Bank Ltd. was taken at interest rate of 8% per annum. This loan was fully utilized for construction of the new building. (ii) Loan of ₹20,00,000 from Satya Bank Ltd. Out of this, loan amount of ₹6,00,000 was utilized for working capital purpose. Total interest of ₹1,92,000 were paid to Satya Bank Ltd. for the financial year 2022-23. Construction of the new building was completed on 31st January, 2023 and was ready for its intended use on the same date. None of the loan was repaid during the year. The building is a qualifying asset for the purpose of AS-16. Out of loan from Data Bank Ltd., surplus funds were temporarily invested for the short period of time. This temporary investment earned interest of ₹30,000. You are required to calculate the amount of interest (a) to be capitalized, (b) to be charged to profit and loss account from the total interest incurred as borrowing cost during the year 2022-23 (as per AS-16).
Karna Ltd., an Indian Company, has the following foreign currency transactions during the financial year 2022-23: (i) On 1st July, 2022, imported goods from Try Ltd., a German based company, amounting to ₹30,96,000. (ii) On 1st October, 2022, imported plant and machinery from Lucy Ltd., a German based company, for € 18,500. The amount was paid on the date of import itself. (Ignore depreciation). (iii) On 1st December, 2022, exported good on credit to Cream Ltd., a German based company, amounting to ₹50,40,000. All the above transactions were recorded in the books of account at the prevailing exchange rate on the date of the transactions. Ignore taxes and duty on the above transactions. Payment due from Cream Ltd. and payment due to Try Ltd. is outstanding as on 31st March, 2023. Rate of exchange between reporting currency (*) and foreign currency (€) on different dates are as under: On 1st July, 2022 1 € = ₹86 On 1st October, 2022 1 € = ₹88 On 1st December, 2022 1 € = ₹84 On 31st March, 2023 1 € = ₹90 You are required, as per AS-11: (i) To show value at which above items will appear in Balance sheet as on 31st March, 2023; (ii) To calculate the amount of gain/loss on each of above transactions on account of exchange differences, if any.
In the following cases, find the value of closing stock as per AS 2: (i) Sonu is a retailer dealing in toys. During the year, he purchased items worth ₹1,47,000 and made a total sale ₹1,54,000. The average percentage of gross margin is 10% on cost. Opening stock of toys at cost was ₹20,000. (ii) On 21st March, 2023, Mohan purchased 250 chairs at ₹300 each. The selling price of the chair is ₹400 each. Owing to a manufacturing defect, net realisable value of the whole lot of chair was determined at 70% of their normal selling price. No chairs were sold during the year.
A Ltd. purchased a Machinery for ₹75 Lakhs. Government Grant received towards this Machinery is ₹10 Lakhs. Residual Value of Machinery at the end of useful life of 6 Years is ₹5 Lakhs. Asset is shown in Balance Sheet at net of grant. At the beginning of the 3rd year, an amount becomes refundable to the extent of ₹8 Lakhs due to non-compliance of certain conditions of grant. You are required to give necessary Journal entries for the 1st year and the 3rd year in the books of A Ltd.