Page 5 - 32. ANALYSIS OF FS

(c) Short Term Provisions 1,06,500
TOTAL 5,21,000
ASSETS
(1) Non-Current Assets
(a) Property, plant and equipment (net) 1,00,000
(b) Long-term Loans and Advances 40,000

(c) Other Non-Current Assets 50,000
(2) Current Assets
(a) Current Investment 30,000
(b) Inventories 80,000
(c) Trade Receivables 55,000
(d) Cash and Bank Balances 1,15,000
(e) Other Current Assets 51,000
TOTAL 5,21,000

Additional information of Softbharti Pvt Ltd.:
● Deferred tax liability of Rs. 6,000 is created due to following temporary difference: Difference in

depreciation amount as per Income tax and Accounting profit
● There is only one property, plant and equipment in the company, whose closing balance as at 31st March,
2020 is as follows:

Asset description As per Books As per Income tax
Property, plant and equipment Rs. 1,00,000 Rs. 80,000

● Pre-incorporation expenses are deductible on a straight line basis over the period of five years as per
Income tax. However, the same are immediately expensed off in the books.
● Current tax is calculated at 30% on PBT - Rs. 3,55,000 without doing any adjustments related to
Income tax. The correct current tax after doing necessary adjustments of allowances / disallowances
related to Income tax comes to Rs. 1,25,700.
● After the reporting period, the directors have recommended a dividend of Rs. 15,000 for the year ending

31st March, 2020 which has been deducted from reserves and surplus. Dividend payable of Rs. 15,000 has
been grouped under ‘other current liabilities’ along with other financial liabilities.
● There are ‘Government statutory dues’ amounting to Rs. 15,000 which are grouped under ‘other current
liabilities’.

● The capital advances amounting to Rs. 50,000 are grouped under ‘Other non-current assets’.
● Other current assets of Rs. 51,000 comprise Interest receivable from trade receivables.
● Current investment of Rs. 30,000 is in shares of a company which was done with the purpose of trading;
current investment has been carried at cost in the financial statements. The fair value of current
st
investment in this case is Rs. 50,000 as at 31 March, 2020.
● Actuarial gain on employee benefit measurements of Rs. 1,000 has been omitted in the financials of
st
Softbharti private limited for the year ending 31 March, 2020.
The financial statements for the financial year 2019-2020 have not been yet approved.
You are required to ascertain whether the financial statements of Softbharti Pvt. Ltd. are correctly presented
as per the applicable financial reporting framework. If not, prepare the revised financial statements of

32.4