Page 2 - 35. FR APRIL 22 MTP QP ANSWERS

MOCK TEST PAPER 2

FINAL COURSE: GROUP – I

PAPER – 1: FINANCIAL REPORTING

Question 1
(a) A Limited has prepared the following draft balance sheet as on 31st March 20X1:
(Rs. in crore)
Particulars 31st March, 31st March,
20X1 20X0
ASSETS
Cash 250 170
Cash equivalents 70 30
Non-controlling interest’s share of profit for the year 160 150
Dividend declared and paid by A Limited Accounts receivable 90 70
Inventory at cost 2,300 1,800
Inventory at fair value less cost to complete and sell 1,500 1,650
Investment property 180 130
Property, plant and equipment (PPE) at cost 3,100 3,100
5,200 4,700
Total 12,850 11,800

CLAIMS AGAINST ASSETS
Long term debt (Rs. 500 crore due on 1st January each year) 3,300 3,885
Interest accrued on long term debt (due in less than 12 260 290
months) Share Capital 1,130 1,050
Retained earnings at the beginning of the year Profit for the 1,875 1,740
year 1,200 830
Non-controlling interest Accumulated depreciation on PPE 830 540
Provision for doubtful receivables Trade payables 1,610 1,240
Accrued expenses 200 65
Warranty provision (for 12 months from the date of sale) 880 790
Environmental restoration provision (restoration expected in 15 30
20X6) 600 445
Provision for accrued leave (due within 12 months) 765 640
Dividend payable
35 25
150 230
Total 12,850 11,800
Prepare a consolidated balance sheet using current and non-current classification in accordance with Ind AS 1.
Operating cycle of the entity is 12 months.

(b) Lessee enters into a 10-year lease for 5,000 square metres of office space. The annual lease payments are

Rs. 1,00,000 payable at the end of each year. The interest rate implicit in the lease cannot be readily
determined. Lessee’s incremental borrowing rate at the commencement date is 6% p.a. At the beginning
of Year 7, Lessee and Lessor agree to amend the original lease by extending the contractual lease term by
four years. The annual lease payments are unchanged (i.e., Rs. 1,00,000 payable at the end of each year

35. 1