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QUESTIONS FROM PAST EXAM PAPERS

Q5 (Exam May 18 & MTP April 22 – 10 Marks)

Seeds Ltd. is operating in the oil industry. Its business segments comprise crushing and refining. Certain
information for financial year 2017-18 is given below:
(Rs in lakh)
Segments External Tax Other Operating Result Assets Liabilities
Sale Income
Crushing 1,00,000 2,500 20,000 5,000 25,000 15,000
Refining 35,000 1,500 7,500 2,000 15,000 5,000

Additional Information: (Rs in lakh)
❖ Unallocated revenue net of expenses is Rs 1,500.
❖ Interest and bank charges is Rs 1,000
❖ Income-tax expense is Rs 1,000 (current tax Rs 975 and deferred tax Rs 25)
❖ Investments Rs 5,000 and unallocated assets Rs 5,000

❖ Unallocated liabilities, Reserves & Surplus and Share capital are Rs 10,000; Rs 15,000 and Rs 5,000
respectively.
❖ Depreciation amounts for crushing and refining are Rs 500 and Rs 150 respectively.
❖ Capital expenditure for crushing and refining are Rs 2,500 and Rs 1,000 respectively.
❖ Revenue from outside India is Rs 15,000 and segment assets outside India Rs 5,000.
Based on the above information, how Seeds Ltd. would disclose information about reportable segment revenue,

profit or loss, assets and liabilities for financial year 2017-18?
SOLUTION

(1) Segment revenues, results and other information
(Rs in lakh)
Revenue Coating Others Total
1. External sales (gross) 1,00,000 35,000 1,35,000
Tax (2,500) (1,500) (4,000)
External sales (net) 97,500 33,500 1,31,000
Other operating income 20,000 7,500 27,500
Total Revenue 1,17,500 41,000 1,58,500
2. Results
Segment results 5,000 2,000 7,000
Unallocated income (net of unallocated expenses) 1,500

Profit from operation before interest, taxation and 8,500
exceptional items
Interest and bank charges (1,000)
Profit before exceptional items 7,500
Exceptional items Nil
Profit before taxation 7,500
Less: Income Taxes
Current taxes (975)
Deferred taxes (25)
Profit after taxation 6,500
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