Financial Accounting II COM204

FINANCIAL ACCOUNTING II F.Y.B.COM SEMESTER- II

ASSIGNMENT NUMBER- 1

UNIT COVER 1 & 2

1. Define the meaning of Accounting
2. What are the objectives of the Accounting Standard?
3. What are the advantages of Accounting Standards?
4. What is AS 10?
5. What is the long form of PPE?
6. What is AS 16?

Solve the following problems. AS- 10

1. Opus contracted with a supplier to purchase machinery which is to be installed in its one factory in three months. Specific foundations were required for the machinery which were to be prepared within this supply

lead time. The cost of the site preparation and laying foundations was

2,80,000. These activities were supervised by a Handler during the entire period, who is employed for this purpose of 55,000 per month. The machine was purchased at 1,98,00,000 and 20,000 transportation charges were incurred to bring the machine to the factory site. A Technician was appointed at a fee of ? 90,000 to supervise machinery installation at the factory site.

State the amount of the machinery that should be capitalized.

1. Adla Badli Ltd exchanges land with a book value of t 20,00,000 for cash of ? 40,00,000 and Plant and Machinery valued at 50,00,000, What will be the measurement cost of the as received. (Consider that the transaction has commercial substance)?
2. Mudra is installing a new plant at its production facility. It has incurred these costs:

Cost of the plant 30 lakhs, Initial delivery and handling costs 2 lakhs, Cost of site preparation 8 lakhs, Technician used for advice on the acquisition of the plant 10 lakhs, Interest charges paid to supplier of plant for

deferred credit 3 lakhs, estimated dismantling costs to be incurred after 7 years 5 lakhs, Operating losses before commercial production 1 lakh

Solve the following problems. AS- 16

66. On1 April, 2022, an item of plant is offered for sale at 20 million, with payment terms being three equal instalments of 66.66.666 over a two-year period (payments are made on 1 April, 2022, 31 March 2023 and 31 March, 2024) Implicit interest rate of 7.8 percent pa Pass

necessary journal entries for recording the property under Ind AS 16 on 1.04.2022.

4000. Anasset which cost ?50,000 was estimated to have a useful life of 10 years and residual value After two years, useful life was revised to 5 remaining years.

Calculate the depreciation charge for the years 1,2 and 3.

2020. ZensarLimited started construction on a building for its own use on 14 April, 2020. The following costs are incurred.

Other Relevant Information:

Material costing 200.000 had been spoiled and therefore wasted and a further f 3.00.000 was spent on account of faulty design work. As a result of these problems, work on the building was stopped for two weeks in November, 2020 and it is estimated that 44,000 of the labour cost relate to that period. The building was completed on 1 January, 2021 and brought in ae 1 April, 2021. Zensar Limited had taken a loan of?80,00.000 on 1 April 20020 for construction of the building. The loan carried an interest rate of 8% per annum and is repayable on 14 April 2022. Calculate cost of building.

1. D)On1 April, 2021, Dhanlaxmi acquired a machine under the following terms:

Purchase of a five-year maintenance contract with vendor 14,00,000

In addition to the above information Dhanlaxmi Ltd. was granted a trade discount of 12% on the initial list price of the asset and a settlement discount of 8%, if payment for the machine was received within one month of purchase. XYZ Ltd. paid for the plant on 20th April, 2021.

Compute the cost of the asset to be recognized.