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Online MCQ Assignment
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Solved Question

In each of the cases given below, one out of four alternatives is correct. Indicate the correct answer and give workings/reasons briefly in support of your answer:
Q1: SMITH LTD. had 1000000 equity shares outstanding on April 01, 2012. The average fair value per share during the year 2012-13 was Rs.50. The Company has given share option to its employees of 2,00,000 shares at option price of Rs.40. If net profit attributable to equity shareholders for the year ended March 31, 2013 is Rs.21 lakh, what would be DILUTED EPS as per AS-20?

  1. Rs.2.10
  2. Rs.2.06
  3. Rs.2.02 [Ans]
  4. None of (A), (B), (C)

Q2: VASUDA CONSTRUCTION LTD. undertook a contract on January 1, 2013 to construct a building for Rs.70 lakh. The Company found on March 31, 2013 that it had already spent Rs.52 lakh on the construction. Prudent estimate of additional cost for completion was Rs.28 lakh. SContract value to be recognized as Turnover in the final accounts for the year ended March 31, 2013 as per AS-7 (revised) will be

  1. Rs.52.5 lakh
  2. Rs.50.4 lakh
  3. Rs.45.5 lakh [Ans]
  4. None of these

Q3: BANSAL LTD. had acquired 75% share of NAVINA LTD. for Rs.27 lakh. The Net Assets of NAVINA LTD. on the day are Rs.24 lakh. During the year Bansal Ltd. sold the investment for Rs.32 lakh and Net Assets of Navina Ltd. on the date of disposal was Rs.40 lakh. The Profit/Loss on disposal of this investment to be recognized in consolidated financial statement is

  1. Profit Rs.800 lakh
  2. Profit Rs.200 lakh
  3. Loss Rs.700 lakh [Ans]
  4. Insufficient Information

Q4: The fair values of Pension Plan Assets of ZOOM LTD. at the beginning and end of the year 2012-13 were Rs.5,60,000 and Rs.6,20,000 respectively. The actual return on Pension Plan Assets for the year was Rs.63,000. If benefit payments made to the retirees are Rs.64,000, the employer’s contribution to the plan during the year as per AS-15 would be

  1. Rs.52,000
  2. Rs.61,000 [Ans]
  3. Rs.65,000
  4. None of (A), (B), (C)

Q5: MS. DEEPASHREE purchased 1000 shares in SPECTRUM LTD. at Rs.600 per share in 2010. There was a rights issue in 2013 at one share for every two held at price of Rs.150 per share. If Ms. Deepashree subscribed to the rights, what would be carrying cost of 1,500 shares as per AS-13.

  1. Rs.6,00,000
  2. Rs.6,75,000 [Ans]
  3. Rs.7,00,000
  4. Data insufficient

Q6: SWIFT LTD. has an asset, which is carried in the Balance Sheet on 31.3.2013 at Rs.600 lakh. As at that date value in USE is Rs.400 lakh. If the net selling price is Rs.450 lakh, Impairment loss of the Asset as per AS-28 will be

  1. Rs.200 lakh
  2. Rs.150 lakh [Ans]
  3. Rs.50 lakh
  4. None of (A), (B), (C)

Q7: PARTHAN LTD. reports quarterly and estimates an annual income of Rs.200 crores. Assume Tax rates on first Rs.100 crores at 30% and on the balance income at 40%. The estimated quarterly incomes are Rs.15 crores, Rs.50 crores, Rs.75 crores and Rs.60 crores respectively. The Tax expenses to be recognized in the last quarter as per AS-25 is

  1. Rs.24 crores
  2. Rs.21 crores [Ans]
  3. Rs.19 crores
  4. Insufficient Information

Q8: BHARAT LTD. bought a forward contract for three months of US $ 150000 on 1st March, 2013 at 1 US $ = Rs.54.10 when exchange rate was 1US $ = Rs.54.12. On 31st March, 2013 when the books were closed forward exchange rate for two months was US $ 1= Rs.54.16. On 30th April, 2013 the contract was sold at Rs.54.20 per US Dollar. As per AS-30 the profits from sale of contract to be recognized in the Profit & Loss A/c will be

  1. Rs.6,000 [Ans]
  2. Rs.8,000
  3. Rs.12,000
  4. None of these

Choose the most appropriate one from the stated options and write it down (only indicate A,B,C,D as you think correct). 
Q1: The objective of AS-1 is

  1. To prohibit any change in accounting policies
  2. To ensure disclosure of accounting policies
  3. To ensure that the effect of any change in accounting policy is adequately disclosed
  4. Both B and C above [Ans]

Q2: As per AS-3 (Revised) Interest and Dividends received in the case of a manufacturing enterprise should be classified as cash flow from

  1. Operating activities
  2. Financing activities
  3. Investing activities [Ans]
  4. Both (B) and (C)

Q3: According to AS-28, estimates of future cash flow should not include

  1. Cash flow from financing activities [Ans]
  2. Cash flow from the continuing use of the assets
  3. Cash flow to be received for disposal of asset at the end of its useful life
  4. None of (A), (B), (C)

Q4: M Ltd. holds 51% of N Ltd. N Ltd. holds 51% of P Ltd. and O Ltd. holds 49% of P Ltd. The Related parties as per AS-18 are

  1. M Ltd., N Ltd. and P Ltd. [Ans]
  2. M Ltd. and P Ltd.
  3. N Ltd. and P Ltd.
  4. M Ltd. and N Ltd. only

Q5: According to AS-11 (Revised) the difference between the forward rate and the exchange rate at the date of transaction should be

  1. Ignored
  2. Recognized as income or expense [Ans]
  3. Adjusted to Shareholders’ interests
  4. None of (A), (B), (C)

(i)         From the following information, determine the possible value of brand under potential earning model: lakhs
Profit before tax
Income Tax
Tangible Fixed Assets
Identifiable Intangibles other than brand
Expected normal return on Tangible Fixed Assets
Appropriate Capitalisation Factor for Intangibles
25 %

(ii)        Mohan Ltd. purchased a plant for US $ 15000 on 31st December, 2012, payable after 4 months. The Company entered into a forward contract for 4 months @ Rs.52.50 per Dollar. On 31st December, 2012, the exchange rate was Rs.51.10 per Dollar. How the Company will recognize the profit or loss on forward contract in its books for the year ended 31st March, 2013.
Answer (i) :
Calculation of Possible Value of Brand

ParticularsRs. in lakh
Profit after Tax (650 – 150):
Less: Profit allocated to transible fixed assets:
Profit relating to intangible assets including Brand:

Calculation of profit or loss to be recognized
In the books of Mohan Ltd.
Forward contract rate:                                                                    Rs.52.50
Less: Spot rate :                                                                              Rs.51.10
Loss:                                                                                                Rs.1.40
Forward Contract Amount:                                                            $ 15,000
Total loss on entering into forward contract
= ($ 15,000 x Rs.1.40):                                                       Rs.21.00
Contract period: 4 months
Loss for the period 1st January, 2013 to 31st March, 2013, i.e.,
3 months falling in the year 2011 – 12 will be Rs.21,000 x =      Rs.15,750
Balance loss of Rs.5,250 (i.e., Rs.21,000 – Rs.15,750)
for the months of April, 2013 will be recognized in the financial year 2013 – 2014.