Professional Documents
Culture Documents
Pakistan
15 Minutes
03 Hours
Roll No.:
(i)
(ii)
(iii)
(iv)
(v)
Marks
Q. 1 (a) Following are the statements of profit or loss of Gold Ltd., and its subsidiaries for the year
ended June 30, 2013:
Revenue
Cost of sales
Gross profit
General and administrative expenses
Marketing and distribution expenses
Other income
Financial costs
Profit before tax
Income tax expense
Profit for the year
Rs. 000
Copper Ltd.
6,500
(3,480)
3,020
(685)
(625)
(230)
1,480
(370)
1,110
Additional Information:
1.
On January 1, 2013 Gold Ltd., acquired 225,000 shares out of total paid up shares of
300,000 (Rs. 10 each) of Silver Ltd., for Rs. 3,375,000. The reserves of Silver Ltd., at
the acquisition date were Rs. 900,000.
2.
Since its acquisition, Silver Ltd., has sold goods to Gold Ltd., for Rs. 1,000,000, being
the selling price. 30% of the items remained in Gold Limiteds inventories at the year
end. Silver Ltd., applies 20% gross margin on the sales to Gold Ltd.
3.
At the year end, the goodwill of Silver Ltd., was impaired by Rs. 50,000. Gold Ltd.,
follows the policy to charge impairment losses to general and administrative expenses.
4.
Gold Ltd., values the non-controlling interest at the proportionate share of the fair value
of the net assets at the date of acquisition.
5.
6.
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At the date of acquisition, the property, plant and equipment of Silver Ltd., was
revalued by a professional valuer, which was higher by Rs. 250,000 than the book
value. The increase in value was related to a plant with remaining useful life of 5 years.
The group policy is to charge depreciation on the plant to general and administrative
expenses on monthly basis from the date of acquisition.
On July 1, 2008, Gold Ltd., had acquired 140,000 ordinary shares of Copper Ltd.,
whose paid up capital was Rs. 2,000,000 (Rs. 10 each) for Rs. 2,170,000. At the date
of acquisition the reserves of Copper Ltd., stood at Rs. 550,000.
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7.
8.
9.
Gold Ltd., disposed of 80,000 shares of Copper Ltd., on April 1, 2013 for
Rs. 2,800,000. The fair value of the retained shares as at April 1, 2013 was
Rs. 2,040,000. The reserves of Copper Ltd., as at July 1, 2012 were Rs. 2,350,000.
There was no impairment of goodwill as at June 30, 2013.
Silver Ltd., paid dividend of 300,000 on October 1, 2013 and Gold Ltd., has recorded
its share of dividend in other income.
Gold Ltd., is holding an available for sale investment. The accountant has calculated
the gain on subsequent measurement of Rs. 126,000 for the year but has not recorded
the same as he needs to know its treatment in the financial statements. Assume that
all income and expenses for all the three entities accrued evenly throughout the year.
Required:
Prepare the Consolidated Statement of Profit or Loss and Other Comprehensive Income for
the Gold group for the year ended June 30, 2013.
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(b) Dutech Private Limited, a newly established company, has started the business of
manufacturing abrasives, to be exported to China. The CEO of the company has attended a
seminar on environmental reporting which explained the issues of pollution caused during
the production process and the publication of environmental reports along with financial
statements.
Required:
You, being the management accountant and head of finance, were asked to brief the staff
regarding the importance of environmental reporting specially covering the following:
(i)
(ii)
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Q. 2 Salik Ltd., was established in 1994 and is engaged in manufacturing of plastic moulded parts. In
year 2000, it acquired 75% interest in Safi Ltd., engaged in importing of plastic raw material. In
the year 2009, it acquired 35% interest in Giant Ltd., which was customer of Salik Ltd. On
January 1, 2013, it also acquired 60% interest in Millat Packaging Ltd.
The draft consolidated financial
December 31, 2013 are as follows:
statements
of
Salik
Group
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for
the
year
ended
Rs. 000
30,545
(19,243)
11,302
(7,762)
3,540
1,200
510
(405)
4,845
(1,454)
3,391
3,116
275
3,391
2013
15,780
(4,050)
11,730
175
3,450
1,250
16,605
6,200
5,275
11,195
10,710
8,424
10,245
29,379
310
2,015
3,830
120
1,350
835
1,311
125
22,670
39,275
Rs. 000
2012
10,850
(3,500)
7,350
2,980
1,250
11,580
3,450
3,375
6,635
13,460
25,040
29,689
6,500
5,935
7,770
20,205
-
20,205
5,965
620
2,050
50
2,720
3,621
39,275
910
490
620
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Marks
2,115
25,040
Additional Information:
(i) A plant costing Rs. 1.5 million and having book value of Rs. 1.2 million was sold for
Rs. 1.5 million. New plant and equipment were acquired in year 2013 including
additions of Rs. 2.2 million acquired under finance lease.
(ii) Data relating to the acquisition of Millat Packaging Ltd., is as follows:
Rs. 000
Property, plant and equipment
700
Inventories
84
Accounts receivable
76
Cash
254
Accounts payable
(222)
Income tax payable
(74)
818
Goodwill
175
993
Less: Non-controlling interest
(175)
Value of net assets acquired
818
The consideration was paid by issuing 66,000 ordinary shares of Rs. 11.50 each. The
balance amount of Rs. 59,000 was paid in cash.
(iii) The tax for the year included deferred tax liability of Rs. 291,000.
Required:
Prepare Consolidated Statement of Cash flows for the year ended December 31, 2013 as
per requirement of the IAS 7 using indirect method.
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Q. 3 (a) According to IFRS 8, what amounts must be disclosed by an entity, if these amounts are
specifically included in segment profit or loss?
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(b) Saaim Limited's statement of financial position as of June 30, 2012 is showing its paid up
ordinary share capital of Rs. 75 million (Rs. 10 per share).
During the year ended June 30, 2013, the company has issued options of 1.5 million
shares. The company has reported the net profit of Rs. 1,350,000 for the year.
The exercise price for the shares under option is Rs. 12 per share and the average market
value of one ordinary share is Rs. 16 per share.
Required:
Calculate Basic EPS and Diluted EPS for the year ended June 30, 2013.
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Q. 4 (a) Infinity Ltd., has introduced a post employment defined benefit compensation scheme for its
employees on July 1, 2008. Following information is related to the scheme for the year
ended June 30, 2013:
Rs. 000
Opening
Closing
Balance
Balance
Present value of plan liabilities
1,900
2,060
Fair value of plan assets
1,722
1,970
Activities during the year:
Current service cost
200
Benefits paid out
155
Contributions paid by the company
145
Discount rate
14%
Required:
(i) Calculate gain or loss on re-measurement of plan assets and liabilities as at
June 30, 2013.
(ii) Prepare extracts of the Statement of Financial Position and the Statement of Profit or
Loss and Other Comprehensive Income for the year ended June 30, 2013.
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(b) Shahcar Automobiles, a car dealer, has an arrangement with Greencars, an automobile
manufacturer, to obtain automobiles on consignment basis. The purchase price includes an
element of finance. Shahcar settles the price of automobiles after 10 days of their sales to
customers.
The agreement further provides that if the automobiles remain unsold after six months, then
Shahcar Automobiles is obliged to purchase the automobiles. There is no right of return.
Shahcar Automobiles is also responsible for insurance and maintenance from the date of
delivery.
Required:
Applying the principle of substance over form, describe as to whether the asset, upon
delivery, will be recognized by Shahcar Automobiles or it will remain in the inventory of
Greencars. Give reasons to support your answer.
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(c) Galaxy Co., purchased 15,000 shares of Star Ltd., from open market on July 1, 2012 for
Rs. 35 per share. The market price on June 30, 2013 was Rs. 38 per share.
On October 1, 2013 Galaxy Ltd., sold its entire shares of Star Ltd., for Rs. 40 per share.
Galaxy Ltd., paid the transaction cost of 1% of the purchase/ sale price.
Required:
Prepare the extracts of Statement of Profit or Loss and Other Comprehensive Income and
Statement of Financial Position for the year ended June 30, 2013 and 2014 showing the
above transactions.
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THE END
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