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Objective Type Set
Online MCQ Assignment
Question Solution
Solved Question

In each of the cases given below, one out of four alternatives is correct. Indicate the correct answer and give your workings/reasons briefly:
Q1: RAJASTHALI Ltd. purchased Fixed Assets costing Rs.6,000 lakhs on 1.4.2011 and the same was fully financed by Foreign Currency Loan (U.S. Dollars) payable in three annual equal instalments. Exchange rates were 1 Dollar = Rs.40 and Rs.42.50 as on 1.04.2011 and 31.03.2012 respectively. First instalment was paid on 31.03.2012. As per AS-11, Exchange Difference to be charged to P & L A/c for the year 2011-12 will be :
A. Rs.375 lakhs [Ans]
B. Rs.250 lakhs
C. Rs.Nil
D. None of these
Q2: PRARTHANA & PIYUSH Ltd. bought a forward contract for three months of US $ 2,00,000 on 1st March at 1 US $ = Rs.50.10 when spot exhange rate was US $ 1 = Rs.50.11. On 31 st March when the books were closed forward exchange rate for two months was US $ 1 = Rs.50.15. On 30th April, the contract was sold at Rs.50.18 per dollar. As per AS 30, the profits from sale of contract to be recognized in the P & L A/c will be :
A. Rs.2,000
B. Rs.10,000
C. Rs.6,000 [Ans]
D. None of these
Q3: BHARAT & TUSHAR Ltd. obtained a Loan from a bank for Rs.240 lakhs on 30.04.2011. It was utilized for : Construction of a shed Rs.100 lakhs, Purchase of a machinery Rs.80 lakhs, Working Capital Rs.40 lakhs, Advance for purchase of truck Rs.20 lakhs, Construction of shed was completed in March 2012. The machinery was installed on the same date. Delivery truck was not received. Total interest charged by the bank for the year ending 31.03.2012 was Rs.36 lakhs. As per AS 16, Interest to be debited to Profit & Loss account will be :
A. Rs.36 lakhs
B. Rs.21 lakhs [Ans]
C. Rs.9 lakhs
D. None of these
Q4: M/s XYZ Ltd. has three segments namely X, Y, Z. The total assets of the Company are: Segment X Rs.2.00 crores, Segment Y Rs.6.00 crores and Segment Z Rs.12.00 crores. Deferred tax assets included in the assets of each Segments are X- Rs.1 crore, Y- Rs.0.80 crores and Z- Rs.0.60 crores. The accountant contends that all the three Segments are reportable segments. As per AS 17 :
A. X, Y, and Z are reportable segments
B. Only X and Y are reportable segments
C. Only X and Z are reportable segments
D. Only Y and Z are reportable segments [Ans]
Q5: X Ltd. holds 51% of Y Ltd., Y Ltd. holds 51% of W Ltd., Z Ltd. holds 49% of W. Ltd. As per AS 18, Related Parties are :
A. X Ltd., Y Ltd. & W Ltd. [Ans]
B. X Ltd. & Z Ltd.
C. Y Ltd. & Z Ltd.
D. X Ltd. & Y Ltd. only
Q6: As per records of NAVEEN ND Ltd. Accounting Profit Rs.12,00,000, Book Profit as per MAT Rs.7,00,000, Profit as per Income Tax Act Rs.1,20,000, Tax Rate 20%, MAT Rate 7.50%. As per AS-22, Deferred Tax Asset/Liability will be :
A. Rs.2,40,000
B. Rs.2,16,000 [Ans]
C. Rs.48,000
D. Rs.2,68,500
Q7: As per records of PELF FIN STOCK Ltd. Net Profit for the current year Rs.199.20 lakhs, No. of Equity Shares outstanding 100 lakhs, No. of 12% Convertible Debentures of Rs.100 each 2 lakhs, Each Debenture is convertible into 10 equity shares, Tax Rate 30%, As per AS 20, Diluted Earnings Per Share is :
A. Rs.1.66
B. Rs.1.86
C. Rs.1.80 [Ans]
D. None of these
Q8: Accountants of M. K. SHARDA Ltd. show a Net Profit of Rs.14,40,000 for the third quarter of 2011 after incorporating the following :
(i) Bad debts of Rs.80,000 incurred during the quarter. 50% of the bad debts have been deferred to the next quarter.
(ii) Extra ordinary loss of Rs.70,000 incurred during the quarter has been fully recognized in this quarter.
(iii) Additional depreciation of Rs.90,000 resulting from the change in the method of charge of depreciation.
As per AS 25, the Correct Quarterly Income is :
A. Rs.14,00,000 [Ans]
B. Rs.13,70,000
C. Rs.13,33,000
D. None of these
Q9: SRIJAN Ltd. wishes to obtain a machine costing Rs.60 lakhs by way of lease. The effective life of the machine is 15 years, but the company requires it only for the first 5 years. It enters into an agreement with Ashok Ltd., for a lease rental for Rs.6 lakhs p.a. payable in arrears and the implicit rate of interest is 15%. As per AS 19, what should be recognized as an expense in the Statement of Profit and Loss in the books of Lessee :
A. Total Lease Payments [Ans]
B. Only Finance Charges included in Lease payments
C. Depreciation of Rs.4,00,000 p.a.
D. None of these
Q10: S CHAND Ltd. issued certain callable convertible debentures at Rs.60. The value of similar debentures without call or equity conversion option is Rs.57. The value of call as determined using Black and Scholes model for option pricing is Rs.2. The values of liability and equity component will be :
A. Rs.57, Rs.3
B. Rs.58, Rs.2
C. Rs.59, Rs.1
D. Rs.55, Rs.5 [Ans]
Section B
Q1: In case of Demerger :
A. Demerged Company issues Shares to the Resulting Company.
B. Resulting Company issues Shares to the Demerged Company.
C. Resulting Company issues Shares to the Shareholders of Demerged Company. [Ans]
D. Demerged Company issues Shares to the Shareholders of Resulting Company.
Q2: Economic Activity of Investment Associate Ltd. is controlled by Holding Ltd. and Subsidiary Ltd. State the Relevant Accounting Standard (out of AS 13, AS 21, AS 23, AS 27) applicable if Holding Ltd. holds.
A. 19% Shares in Investment Associate Ltd. [Ans]
B. 20% Shares in Investment Associate Ltd.
C. 50% Shares in Investment Associate Ltd.
D. 51 % Shares in Investment Associate Ltd.