Document No.3
 
 
Time:     9.00AM to 10.45AM                                                                                                                            Max. Marks: 65
 
Question-1                                                                                                                                                                            8 Marks
Reply the following in two sentences each
  1. If any company does not follow notified accounting standards as per company Accounting Standards Rules 2006, What are disclosures requirements to be applied by accountant?
  2. Write Note on NACAS
  3. A Ltd becomes non Small and Medium Company from SMC in the year 2009-2010. What are rules regarding disclosure of figures of 2008-2009 as per companies Accounting Standard Rules 2006?
  4. List categories of entities in Non SMC as per Companies Accounting Standards Rules 2006.
 
Question-2                                                                                                                                                                            4 Marks
You are accounting consultant of following entities and Finance officer is confused regarding application of IFRS on their entities. Please advise them on their relevant dates on which they are to apply converged Accounting Standards. Your answer should be based on Press Notes of Ministry of Corporate Affaires issued till 4th May 2010.
  1. A Ltd is Bank and having turnover of Rs 1100 crores.
  2. B is a society engaged in insurance business.
  3. C Ltd is NBFC listed on National Stock Exchange and covered in Nifty 50 companies.
  4. D Ltd is BSE Sensex Listed Company. It has turnover of more that 1200cr in year 2008-09. On 31.03.2009 its share capital was Rs 800 crore, Free Reserves of Rs 150 cr, Revaluation Reserve of Rs 50cr,capital Reserve of Rs 10cr with unamortized Preliminary expenses of Rs 8 cr.
 
Question-3                                                                                                                                                                            3 Marks
List types of Entities which will apply Converged Accounting Standards on 31.03.2013 based on Press Notes of Ministry of Corporate Affairs issued till 4th May 2010.
 
Question-4                                                                                                                                                                            3 Marks
Please give roadmap to application of CAS on Banks including urban Cooperative Banks. Also explain meaning of Net Worth as per classification dated 04th May 2010
 
Question-5                                                                                                                                                                            3 Marks
Vivek Oberoi is running a charitable organisation Gati for welfare of Tsunami affected people in Tamil Nadu. He contributes regularly and obtain funds from other sources to finance Gati. He runs a orphanage having shop selling products made by orphan Children. Such products are sold at their commercial value. You are to advise on application of Accounting Standards on Gati as per Preface on Accounting Standards issued by ICAI.
 
Question-6                                                                                                                                                                            6 Marks
Journalise entries for A Ltd relating to tax which is covered under provisions of section 115JB and 115JBAA. Mat credit is available for a period of seven years. Company follows recommendations of Guidance Note on MAT credit.
Year 2008-09
Accounting Income Rs 5,00,000. Taxable Income Rs 1,00,000. Difference is due to timing nature. Book profits are Rs 4,00,000. Rate of Tax 30% and Mat Rate is 10%.
Year 2009-10
Accounting Income Rs 3,00,000 and Taxable Income Rs 1,50,000. Difference is due to timing nature. Book Profits Rs 2,00,000. Rate of Tax 30% and Mat Rate is 15%.
 
Question-7                                                                                                                                                                            3 Marks
A Ltd produces excisable Goods in its Factory. Its Managing Director is of view that excise is not cost and hence should not be included in stock valuation. Please discuss.
 
Question-8                                                                                                                                                                            8 Marks
Answer the following as per Guidance note on treatment of Excise and CENVAT Credit issued by ICAI.
Production 20,000 unit from consumption of Raw Material A 35000 units
and Raw Material B 15000  units.
Excise Duty on Finished Goods is Rs 25 per unit and on Raw materials it is  Rs 5 & Rs 4 for A and B respectively.
Company started its production in this period only and had purchased capital Goods for Rs 10,00,000 with excise of Rs 35000 included .It had closing stock of Finished Goods
At Factory                                                                          1200 units
At Bonded Warehouse ( Rule 20)                                    500 units
At Showroom                                                                      600 units
Company had Raw Stock of A & B in factory for 4000 units and 1000 units.
Calculate
Total Cenvat Credit Available in the period
Total Cenvat Credit Availed in the period
Excise Duty payable
Provision for Unpaid Excise Duty.
 
Question-9                                                                                                                                                                            8 Marks
Calculate DTA/L for all relevant years in case of A Ltd which prepare its accounts on financial year basis.
Date                                       Transaction                                                                          Amount
1.4. 2007               Purchased fixed Assets A                                                                   Rs 2,00,000
1.1. 2008               Purchased fixed Assets B                                                                   Rs 2,40,000
1.5. 2008               Sold part of assets A costing Rs 1,00,000 for                                Rs 1,20,000
1.1. 2009               Purchased Fixed Assets C                                                                  Rs 9,00,000
1.3. 2009               Sold all assets for                                                                                 Rs20,00,000
Depreciation Rate is 15% for accounts and 20% for tax. Rate of Tax is 30%.
 
Question-10                                                                                                                                                                          6 Marks
Opening Stock - Raw Material                                       10,000 units @ 40 each        (with Excise Duty Rs.5)
(Cenvat Credit not yet availed)
Purchase                                                                             70,000 units @ 50 each        (with Excise Duty Rs.5.50)
Production                                                                                              65,000 units
Closing Stock - Raw Material                                                             12,000 units
Excise Duty - Finished Goods                                                                         Rs.12
Goods not yet removed                                                                          5,000 units
Goods Sold                                                                      50,000 units @ 200 each        (with Excise Duty)
Direct Labour                                                                                         Rs.5,70,000
 
Prepare Trading Account and Find out Liabilities of Excise Duty to be paid, at the end of Period.
Use Average method for Stock Valuation.
 
Question-11                                                                                                                                                                          5 Marks
Opening Stock - Finished Goods                                                       15,000 units,        Rs. 20,00,000
                                                                                                                                                (with Excise Duty Rs. 2,25,000)
Opening Stock - Raw Material                                       20,000 units @ 40 each        (with Excise Duty Rs.5 each)
                                                                                                                                                credit availed)                     
Purchase                                                                             70,000 units @ 60 each        (with Excise Duty Rs.6 each)
Consumption - Raw Material                                                             75,000 units       
Direct Labour                                                                       Rs.20 per finished unit       
Production                                                                                              68,000 units       
Sales                                                                                           73,000 units @ 200        with Excise Duty
Excise Duty - Finished unit                                                                              Rs.15       
Use FIFO method for stock valuation                                                                    
Prepare Trading Account
 
Question-12                                                                                                                                                                          4 Marks
As a statutory auditor for the year ended 31st March 2002, how would you deal with the following: S Ltd., a listed company, was incurring heavy losses since the last several years and the industry in which it was functioning was not expected to perform better in the next few years. While finalising the accounts for the year ended 31st  March 2002, the CFO of  the company decided to create a deferred tax asset for the tax benefits that would arise in future years from the earlier years losses that had remained unabsorbed in Income Tax.
 
Question-13                                                                                                                                                                          4 Marks
Milton Ltd. Is a full tax free enterprises for the first 10 year of its existence and is in the fourth year of its operations. Depreciation timing difference resulting in a deferred tax Liability in years 1 and 2 is Rs. 200 lakhs and 400 lakhs respectively. From the 3rd year onwards, it is expected that the timing difference would reverse by Rs. 25, 20, 15, 10, 10, 5, 5, 5 and so on. Assuming tax rate @35% find out the deferred tax liability at the end of the fourth year and any charge to the profit and loss account.
 
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