Financial Accounting and Analysis NMIMS Solution 2024

Q1. Prachi Industries purchased a land worth 2 crores, office fixtures and furniture worth Rs 50 lakhs. Five years back the company has purchased an investment property for Rs 5 crores out of which today they disposed of 20% of the property, at a realizable value of Rs 3 crores. As a consultant to the company discuss as per the needs of corporate reporting the nature of these items, how the above items needs to be presented and disclosed in the corporate financial statement. (10 Marks)

Q2. Ms. Shravani , our accounts manager, is responsible for overseeing financial activities at Mogra Enterprises. She ensures accurate bookkeeping and compliance with accounting assumptions. Her junior executive is confused about how the various accounting assumptions plays a vital role in accounting. Further she wants Ms Shravani to help her in understanding the difference between the accounting period assumption and separate entity assumption, Discuss how (you being) Ms. Shravani would like to explain all these in simple terms. (10 Marks)

Q3. Perform the common Size analysis for the year (5*2—-10 Marks)

a. 2021

b. 2022

Statements of Income

20212022

Operating revenues 9,56,690 9,12,813

Operating expenses

Personnel 1,13,433 1,32,080

Fuel 1,28,076 1,00,058

Purchased power 1,54,910 1,34,488

Depreciation 1,44,622 1,56,469

Maintenance 92,717 86,261

Taxes other than income taxes 63,266 63,220

Purchased services 38,392 35,948

Other 1,01,513 1,04,850

8,36,9298,13,374

Operating income 1,19,761 99,439

Other expenses (income):

Interest expense 36,727 36,771

Interest income ( 61) ( 82)

Loss on impairment of fixed assets 4,089 0

Other, net 4,325 1,556

45,08038,245

Income before special item and

income taxes 74,681 61,194

Special item:

Reserve for drought 1,747 712

Provision for income taxes:

Current 25,061 28,457

Deferred 1,374 (7,504)

Net income 46,499 39,529