Q.

1
Q.1 The summary Balance Sheet of Abhay Limited and Baji Limited Ltd as on 31st Match, 2022
were as follows:
Liabilitie Abhay Baji Ltd Abhay Baji Ltd
Assets
s Ltd ₹ ₹ Ltd ₹ ₹
Share Capital (Equity Goodwill 100000 50000
Shares of ₹ 10 each 1000000 250000 Buildings 200000 100000
General Reserve Machinery 500000 200000
on 01-04-2021 200000 80000 Stock 200000 100000
Sundry Creditors 200000 100000 Sundry Debtors 340000 70000
Bills Payable 50000 30000 Trade Investments 240000
Profit & Loss A/c Bills Receivables 30000 30000
on 01-04-2021 60000 60000 Cash and Bank 50000 20000
Profit & Loss A/c
on 31-03-2022 150000 50000
1660000 570000 1660000 570000
The following information is given:
(a)    Abhay Ltd. acquired 15000 equity shares of Baji Ltd. for ₹ 190000 on 01-04-2021.
(b) Sundry Debtors of Albert Ltd. include ₹ 30000 due from Baji Ltd
(c)    Bills Receivables of Baji Ltd. includes ₹ 10000 due from Abhay Ltd.
(d) The stock of Baji Ltd. includes goods purchased from Abhay Ltd. at ₹ 10000 which includes
profit charged by Abhay Ltd. have proposed 10% dividend for 2021-2022 but effect has not
been given in accounts.
Prepare a consolidated balance sheet of Abhay Ltd. and Baji Ltd. as on 31st March, 2022 with
working of minority interest and cost of control.

Answer
Balance Sheet Total : 1997500
Share Capital : 1000000
Reserves and Surpluses : 381500
Total Shareholders Funds : 1381500
Minority Interest : 166000
Trade Payable : 340000
Short Term Provisions : 110000
Total Current Liabilities : 450000
Tangible Assets : 1000000
Intangible Assets : 150000
Non current Investments : 50000
Total Non Current Assets : 1200000
Inventories : 297500
Trade Receivables : 430000
Cash and Cash Equivalents 70000
Total Current Assets : 797500

Q.2 Q.2
Following are the Profit & Loss Account of H Ltd and its subsidiary company S Ltd.
For the year ended 31st March, 2022:
H Ltd S
Particular
(₹in lakhs)(₹in lakhs)
Income:
Sale or other Income 5000 1000
Increase in Stock 1000 200
6000 1200
Expenses:
Raw Material Consumed 1000 300
Wages and Salaries 800 150
Administrative Expenses 200 100
Selling and Distribution Expenses 200 50
Interest 100 50
Depreciation 100 50
2400 700
Profit before Tax 3600 500
Provision for Tax 1200 200
Profit after Tax 2400 300
Proposed Dividend 1200 150
Balance of Profit 1200 150
Other Information:
H Ltd. sold goods to S Ltd. of ₹ 120 lakhs at cost plus 20%. Stock of S Ltd.
includes such goods valuing ₹ 24 lakhs. Administrative Expenses of S Ltd. include ₹ 5
lakhs paid to H Ltd. as consultancy fees. Selling and Distribution expenses of
H Ltd. includes ₹ 10 lakhs paid to S Ltd. as commission. H Ltd. holds
80% of equity shares capital of ₹ 1000 lakhs in Sony Ltd. Hindustan Ltd. took credit to its
Profit and Loss Account, the proportionate amount of dividend declared and paid by S
Ltd. for the year 2020-2021.
Prepare the consolidated Profit & Loss Statement in the books of H Ltd. for the year
ended 31st March, 2022.

Answer
Revenue from Operations : 5865
Cost of Materials : 1180
Change in Inventories of FG : (1196)
Employee Benefits Expenses : 950
Finance Cost : 150
Depreciation and Amortization : 150
Other Expenses : 535
Total Expenses : 1769
Tax Expenses : 1400
Profit after Tax : 2696
Q.1 Q.1
From the following aprticular calculate the value of goodwill under the super profit method
liabilities Amt in Rs. Assets
Equity shares 7,50,000 Goodwill
Reserve and surplus 1,50,000 Net tangible block
10% Denenture 3,00,000 Current assets
Creditor 1,50,000
total 13,50,000 total
Average profit of the last three year is Rs.1,25,000. which included loss due to strick Rs.10,000 and
gain due to sell of assets at Rs.10,000. Norma rate of reture is 10%.
Goodwill is value at three year purchase of super profit.

Q.2 Q.2 From the following paritcular caculate the value per share under the net assets method.
liabilities Amt in Rs. Assets
Share capital of Rs. 10 eack 10,00,000 Goodwill
Reserve and surplus 25,000 Plant and machinery
10% Debenture 2,00,000 Land and building
Creditors 3,00,000 Trade investment
Bills payable 2,00,000 Stock
Provision for tax 90,000 Debtors
prepaid expenses
Bill receivable
Advance tax
Discount on issue of share
18,15,000
market value of plant and machinery is Rs.8,00,000 and land and building is Rs.10,00,000.

Q.3 Q.No.3 The Balance Sheet of Raman Ltd as on 31st March. 2022 is as foll
Liabilities Rs.
Equity Shares 10,00,000
of Rs.10 each
10% 2,00,000
Preference
General 2,00,000
Shares
Reserve of
Profit & Loss 1,00,000
Rs.100
Account each
Creditors 2,20,000
Provision for 80,000
Income Tax
Outstanding 1,20,000
Expenses
Total 19,20,000

Additional Information:
Land and Buildings revalued at Rs.14,00,000
Plant and Machinery revalued at Rs. 5,50,000.
All other assets and external liabilities are valued at book values.
Find out Break Up Value of an Equity Share.
Ans. 16.50 Per Share
er profit method
Amt in Rs. 1 fmp Rs.1,25,000 ( 1,25,00 add 10,000 less 10,000)
1,00,000 Capitlal employed 8,00,000
8,50,000 NRR 10%
4,00,000 NORMAL PROFIT Rs.80,000
super profit Rs.45,000
13,50,000 Goodwill Rs.1,35,000
to strick Rs.10,000 and

et assets method.
Amt in Rs.
2,00,000 Value per share is = 18,15,000 - 5,000 + 50,000+5,50,000-,7,90,000
7,50,000 1,000,000
4,50,000 Rs.16.20
2,00,000
87,000
88,000
2,000
8,000
25,000
5,000
18,15,000
s Rs.10,00,000.

s on 31st March. 2022 is as follows:

Assets Rs.
Land & 10,00,00
Building
Plant & 6,00,0000
Machiner
Stock 1,20,000
yDebtors 1,00,000
Bank 1,00,000

19,20,00
0

. 5,50,000.
ties are valued at book values.
 From the following information determine the value of Goodwill on the basis of 5 years’ purchase of
Q. 4 super profit of Syzka Ltd as on 31st March, 2021.

Balance Sheet of Syzka Ltd. as on 31st March, 2021

Liabilities Rs. Assets
Share Capital 250000 Fixed Assets
Reserve and Surplus 51500 Stocks
Bank overdraft 10000 Debtors
Creditors 38500 Bills Receivable
Provision for Tax 22500 Cash or Bank
ProposedDividend 37500
Total 410000
Net profits of the company were as under:
Year Ending Rs. Year Ending
31/03/2017 42500 31/03/2020
31/03/2018 48000 31/03/2021
31/03/2019 45000

On 31st March, 2021 Fixed Assets was valued at Rs.2,00,000. The other assets and liabilities have been
correctly valued. In view of the nature of business,the10% is a reasonable return on tangible capital.
Consider closing capital as average capital employed and simple average for computing average profit.
Solution: Average Profit: 46,600, Super Profit: 12,200, Goodwill: 61,000

Q. 5 Calculate the Intrinsic Value and Yield Value of Equity Share of the Company, assuming that the fair
return on investment in the company doing similar business is 15%.
Balance Sheet of M/s. Star Ltd. as at 31-3-2021.
Liabilities Rs. Assets
4000 8% Preference Shares of 400000 Building
Rs.100 each
40000 Equity Shares of Rs.10 400000 Machinery
each
General Reserve 110000 Furniture
Creditors 100000 Stockin Trade
Provisionfor Depreciation 455000 Debtors
Provision for Taxation 90000 Cashand Bank Balance
Proposed Dividend 85000 Deferred Advertising Expenses

 Total 1640000
The Net Profit of the last 3 years ended 31st March, 2021 is as given below
Year Net Profit (Rs)
2018-2019 305000
2019-2020 450000
 2020-2021 560000

Solution: Intrinsic value of Share: Rs.11, Yield Value of Equity Share: Rs. 67.72
sis of 5 years’ purchase of

2021
Rs.
157500
100000
70000
7500
75000

410000

Rs.
50000
47500

ssets and liabilities have been

eturn on tangible capital.
or computing average profit.
00

any, assuming that the fair

21.
Rs.
220000

440000

80000
310000
350000
170000
70000

1640000
Rs. 67.72
 Valuation of Business
Calculate the value of goodwill of business on the basis of
an annuity of super profits, taking the present value of
annuity of one rupee for five years at 10% interest as
Q.6 Rs.3.78.
The net profit of a company after providing for taxation for
the past five years are Rs.4, 00,000, Rs. 4, 20,000, Rs.
4,60,000,Rs. 4,50,000 and Rs. 4,70,000. Average capital
employed is Rs. 40, 00,000 on which a reasonable rate of
return of 10% is expected. It is expected that the company
will be able to maintain its super profits for the next five
years.

Ans: Goodwill = Rs.1,51,200/-

Q.7 On 31st March 2022 the Balance sheet of Mahesh Ltd., was as follows: 10
Liabilities Rs.
30,000 Equity shares of Rs.100 each  30,00,000
Profit & Loss A/C 3,09,000
Short Term Borrowings 70,000
Creditors 2,25,000
Provision for Taxation 1,35,000
Bills Payable 2,21,000

39,60,000

The Net Profit of the Company after providing tax was as follows:
Year Ended Rs.
31st March 2022 2,95,000
31st March 2021 3,00,000
31st March 2020 3,15,000
31st March 2019 3,40,000
31st March 2018 2,90,000

Additional information:
     i.            On 31 March 2018 Land & Building were values at Rs.6, 50,000 and Plant were valued at R
st

   ii.            Normal rate of return is 10%.

Calculate Goodwill to be valued at 4 years purchase of super profit based on average profit of last 5 year

The following is the Balance Sheet of M/s. Jay Ltd. as at

Q.8 31-3-2021.
Liabilities Rs.
Issued and Fully paid-up:
1,60,000 8% Cumulative Preference Shares of Rs.10 each 16,00,000
1,20,000 Equity Shares of Rs.10 each 12,00,000
General Reserve 4,20,000
Profit and Loss A/c 4,20,000

Current Liabilities and Provisions :

Current Liabilities 3,70,000 
Provision for Depreciation 18,20,000
Provision for Taxation 3,60,000
Proposed Dividend 3,40,000
 Total 65,30,000
The Net Profit after Tax for the last 3 years ended 31st March, 2021 is as given below;
Year Net Profit (Rs)
2018-2019 12,20,000

2019-2020 18,00,000

2020-2021 22,40,000

Calculate the Intrinsic Value and Yield Value of Equity

Share of the Company, assuming that the fair return on
investment in the company doing similar business is 12%.
ows: 10
Assets Rs.
Building 5,75,000
Plant 3,70,000
Stock 9,00,000
Trade Receivable 18,15,000
Bank Balance 3,00,000

39,60,000

t Rs.6, 50,000 and Plant were valued at Rs. 3, 30,000.

rofit based on average profit of last 5 years. Consider closing capital employed as average capital employed.

-10

Assets Rs.
Fixed Assets :
 Land and Building 9,80,000
Plant and Machinery 16,60,000
Furniture 3,20,000
Current Assets:
Stock in Trade 12,10,000
Debtors 14,00,000
Cash and Bank Balance 6,80,000
Miscellaneous Expenses:
Deferred Advertising Expenses 2,80,000

65,30,000
21 is as given below;
tal employed.
1)                            are those accounting principles which are recommended by authority or
enforced by law.
a) Accounting Standards
b) Auditing Standards
c) Accounting Rules
d) Financial Reporting Standards Ans:- a) Accounting Standards
2) While preparing Accounting Standards, which of the following factor doesn’t considered
by Accounting Standard Board?
a) Indian Laws
b) International Accounting Standards
c) Role of Accountant
d) Customs and Business Environment Ans:- c) Role of Accountant
3) Which of the following will not be included in Standard?
a) Definitions of the terms used in the Standard
b) Exceptions of standard
c) Date from which the standard will be effective
d) Fundamental accounting principles relating to the standard Ans:- b) Exceptions of
standard
4) Accounting standards are                         .
a) Recommendatory
b) Optional
c) Profit oriented
d) Mandatory Ans:- d) Mandatory
5) AS 23 deals with                                           .
a) Income Tax
b) Property and Plant
c) Borrowing Cost
d) Earning Per share
Ans:- c) Borrowing Cost

6) Principles regarding                             , are included in Indian Accounting Standard 33.

a) Income Taxes
b) Property and Plant
c) Borrowing Cost
d) Earning per Share
Ans:- d) Earning per Share
 7) Accounting Standards are not applicable to                             .
a) Non-Profit Organization
b) An enterprise which is established with the sole objective to collect donations and giving
it to the needy peoples
c) Co-operative enterprise
d) Charitable Institute
Ans:- b) An enterprise which is established with the sole objective to collect donations and
giving it to the needy peoples

8) If any company does not comply with the accounting standards, then
                                .
a) It is not allowed.
b) It is acceptable.
c) The company can disclose the deviation from the accounting standards together with
reasons for the deviation.
d) In such a case, company must take approval from Income Tax department.
Ans:- c) The company can disclose the deviation from the accounting standards together with
reasons for the deviation.
9) Accounting standards intends to                                       .
a) Improve comparability of financial statements
b) Guide Accountant
c) Maximize the profit of Organization
d) Reduce tax liability
Ans:- a) Improve comparability of financial statements
10) In which of the following enterprise, not mandated to apply accounting standards by
Law?
a) Corporate
b) Co-operative
c) Partnership Firm
d) Government
Ans:- c) Partnership Firm
11) There are              accounting standards at present.
a) 30
b) 31

c) 32
d) 35 Ans:- b) 31
12) The                                         , a private sector body, who develops and approves IFRS.
a) International Accounting Standard Board
b) International Auditing Standard Board
c) Industrial Accounting Standard Board
d) Internal Accounting Standard Board
Ans:- a) International Accounting Standard Board
13)                                    were introduced to bring consistency to accounting standards and
practices, reckless of the company or the country.
a) International Financial Reporting Standards
b) International Foreign Reconciliation Standards
c) Internal Fraud and Recovery Standards
d) Internal Framework and Regulatory Standard Ans:- a) International Financial Reporting
Standards
14) An asset which costs ₹150 has a carrying amount of ₹100. Cumulative depreciation for
tax purposes is ₹ 90 and the tax rate is 25%.
c) 32
d) 35 Ans:- b) 31
12) The                                         , a private sector body, who develops and approves IFRS.
a) International Accounting Standard Board
b) International Auditing Standard Board
c) Industrial Accounting Standard Board
d) Internal Accounting Standard Board
Ans:- a) International Accounting Standard Board
13)                                    were introduced to bring consistency to accounting standards and
practices, reckless of the company or the country.
a) International Financial Reporting Standards
b) International Foreign Reconciliation Standards
c) Internal Fraud and Recovery Standards
d) Internal Framework and Regulatory Standard Ans:- a) International Financial Reporting
Standards
14) An asset which costs ₹150 has a carrying amount of ₹100. Cumulative depreciation for
tax purposes is ₹ 90 and the tax rate is 25%.
a. The tax base of the asset is ₹ 60
b. The tax base of the asset is ₹ 80
c. The tax base of the asset is ₹ 120
d. The tax base of the asset is ₹ 40
Ans The tax base of the asset is ₹ 60

15) Accounting Standard Board was established in India in the year ----
a) 1970
b) 1973
c) 1971
d) 1977
Ans:- d) 1977
16. Basic earnings per share should be calculated by dividing -----
a) Number of ordinary shares at the start of the period
b) Number of ordinary shares at the end of the period
c) The weighted average number of shares outstanding during the period Ans- The weighted
average number of shares outstanding during the period
17. XYZ ltd. Is having issued share capital of 80,00,000 shares on 1/1/ 2021. It issued further
40,00,000 share for cash on 1/10/2021. Its weighted average number of shares will be ----
a. 85,00,000 shares
b. 90,00,000 shares
c. 1,00,00,000 shares
d. 1,20 ,00,000 shares
Option 90,00,000 shares
18. Head office expenses ----
a. Must not be allocated to segment
b. must be allocated to segments based on their turnover
c. Can be allocated to segments on a reasonable basis Answer- Can be allocated to segments on
a reasonable basis

19. The carrying value of an asset is ₹ 100. Its fair value is ₹ 120. Do you continue
depreciation?
a. Yes, until the end of its useful life
b. Yes, but half of the previous rate
c. No
Answer- Yes, until the end of its useful life

20 The current liabilities of an entity include fines and penalties for environmental damage.
The fines and penalties are stated at ₹25 millions. The fines and penalties are not deductable
for tax purposes. What is the tax base of the fines and penalties?
a. ₹25 millions
b. ₹15 millions
c. ₹9 millions
d. Zero

Answer ₹ 25 millions
21. There are              accounting standards at present.
a. 30
b. 32 c.35
d. 31 Answer 31
22. As a percentage pf sales, profits or assets, a segment should be at least:
a. 5%
b. 7.5%
c. 20% d.15% e.10%
Answer- 10%
23An asset which costs ₹150 has a carrying amount of ₹100. Cumulative depreciation for tax
purposes is ₹ 90 and the tax rate is 25%.
e. The tax base of the asset is ₹ 60
f. The tax base of the asset is ₹ 80
g. The tax base of the asset is ₹ 120
h. The tax base of the asset is ₹ 40
Ans The tax base of the asset is ₹ 60

24. Accounting Standard Board was established in India in the year ----
e) 1970
f) 1973
g) 1971
h) 1977
Ans:- d) 1977
25. Basic earnings per share should be calculated by dividing -----
a) Number of ordinary shares at the start of the period
b) Number of ordinary shares at the end of the period
c) The weighted average number of shares outstanding during the period Ans- The weighted
average number of shares outstanding during the period

26. XYZ ltd. Is having issued share capital of 80,00,000 shares on 1/1/ 2021. It issued further
40,00,000 share for cash on 1/10/2021. Its weighted average number of shares will be ----
a. 85,00,000 shares
b. 90,00,000 shares
c. 1,00,00,000 shares
d. 1,20 ,00,000 shares
Option 90,00,000 shares
27. Company’s taxable income for the year 2020 is ₹ 8,00,000. The tax rate applicable to the
company is 30%. For 2020, the company has provided ₹2,00,000 for income tax. The actual
liability for 2020 was decided at ₹2,15,000. What is paid in 2021?
₹ 2,55,000
₹ 2,15,000
₹ 2,40,000
Nil
Ans- ₹ 2,55,000

28. The carrying value of an asset is ₹ 100. Its fair value is ₹ 120. Do you continue
depreciation?
a. Yes, until the end of its useful life
b. Yes, but half of the previous rate
c. No
Answer- Yes, until the end of its useful life
29 The current liabilities of an entity include fines and penalties for environmental damage.
The fines and penalties are stated at ₹25 millions. The fines and penalties are not deductable
for tax purposes. What is the tax base of the fines and penalties?
a. ₹25 millions
b. ₹15 millions
c. ₹9 millions
d. Zero

Answer ₹ 25 millions
30. EPS for the current year only is adjusted--
a. No adjustment is made to EPS
b. EPS both for current year and previous year are adjusted
c. Diluted EPS only is adjusted
Answer- EPS both for current year and previous year are adjusted
31. Share, issued in exchange for the settlement of a liability, are included in the EPS
calculation from                                         .
a. The issue date
b. The settlement date
c. The date the services were contracted
d. The completion of the services Answer- The settlement date
32. Principles regarding                             , are included in Indian Accounting Standard 33.
a. Income Taxes
b. Property and Plant
c. Borrowing Cost
d. Earning per Share Answer Earning per Share
33. In which of the following enterprise, not mandated to apply accounting standards by Law?
a. Corporate
b. Co-operative
c. Partnership Firm
Answer- Partnership Firm
34. Dilution is ----
a. A c.
decrease
profit in earnings
and loss per share when convertible instruments are converted to ordinary
d. directors report
Answer- profit and loss

39. As per IND AS 108, the total amount of revenue that should be covered by reortable
segments is, at least            % .
10% b. ₹15 millions
c. ₹ 9 millions
d. Zero

Answer ₹ 25 millions
45.                            are those accounting principles which are recommended by authority or
45.                            are those accounting principles which are recommended by authority or
enforced by law.
a. Accounting Standards
b. Auditing Standards
c. Accounting Rules
d. Financial Reporting Standards Answer- Accounting Standards
46. The basis for treating Borrowing costs should be            .
a. Mixture of cash basis and Accrual Basis
b. Accrual Basis
c. Cash Basis
d. Neither cash basis nor Accrual Basis Answer- Accrual Basis
47. Capitalization of the borrowing costs                           .
a. Shall be suspended during temporary periods of delay.
b. Shall be suspended only during extended periods of delays in which active development is
delayed.
c. Shall never be suspended
d. Shall be suspended for half the period of delay.
Answer- Shall be suspended only during extended periods of delays in which active
development is delayed.
48 Financial accounting is the process of preparing                statement that companies use to
show their financial performance and position outside the company.
a. Economic
b. Cash Flow
c. Fund Flow
d. Financial Answer- Financial
49. The purpose of                is to understand financial statement and regulatory capital
requirement.
a. Financial Planning
b. Financial Analysis
c. Financial Reporting
d. Financial Review
50. Financial reporting is not compulsory for         _.
a. Companies
b. Hawker
c. Banking
d. Insurance Answer- Hawker

51. As per RBI guidelines which is not an classification of loans                 .

a. Standard Assets
b. ₹
c. Loss
2 assets
d. ₹ 1 Answer ₹ 2
57. Compute Borrowing cost to be capitalized as per IND AS 23 from the following
information: Cost of Asset ₹ 20,00,000, Borrowing cost ₹ 1,20,000 and Investment income
₹.50,000 and Loan amount ₹ 20,00,000. a. ₹.1,20,000
b. ₹.70,000
c. ₹.21,20,000
d. ₹ 40,00,000
Answer ₹.70,000
58. The reported revenue including both sales to external customers and intersegment sales or
transfers is                  of combined revenue.
a. 10 % or more
b. 15 % or more
c. 25% or more
d. 75 % or more Answer- 10 % or more

59. Borrowing amounts are ₹ 4,00,000 at Rate of interest 9% p.a., ₹ 5,00,000 at Rate of
interest 12% p.a. & ₹. 3,00,000 at Rate of interest 14% p.a. What is average interest rate for
given
Answer-borrowing.
Human Resource Development Report
63. Human capital is an important                    
a.
a. liability
EPS for of an the
both organization
current year and the previous year are adjusted
b. EPS for both the current year only is adjusted
c.
72)Diluted
MinorityEPS only isinadjusted
Interest the consolidated balance sheet is              to the shareholders of the
holding company.
a)Goodwill b)Capital Reserve
c)an Asset
d) a Liability Ans : d
73) Minority interest is
a) the total of net worth of subsidiary company
b) that part of the net result of operation and net assets not owned by parent
c) Assets of Subsidiary company
d) Interest receivable from bank Ans : b

74) Preparation of consolidated statements of holding company and its subsidiary company as
per a)AS-23
b) AS-21
c) AS-12
d) AS-16 Ans: b

75) Consolidated financial statements are to be prepared as per

a) AS 19
b) AS 10
c) Ind AS 7
d) Ind AS 110

76) Parent’s company share in post-acquisition profit is added to

a) Subsidiary b)Cumulative Reserve
c) Outsider's interest
d) Holding Ans: b
77) Holding Co. is defined by sec.          of the Companies Act 2013.
a(46)
b(87)
c(42)
d(57)
Ans: a

78) Holding Company's share in revenue profits of subsidiary company is adjusted in

a)Shown on Asset side of balance sheet

b)Cost of Control
c)Profit and Loss account
d) Goodwill A/c Ans: c

79) Unrealised profit on goods sold and included in stock is deducted from a)Capital Profit
b)Revenue Profit
c)Fixed Assets
d)Minority interest Ans: b
80) Dividends paid by a subsidiary company out of pre-acquisition profits are a)adjusted
against investment in Subsidiary at the time of consolidation of accounts
b)adjusted against general reserve at the time of consolidation of accounts
c)credited to Profit and Loss account as revenue receipts at the time of consolidation of
accounts
d)ignored for consolidation purposes

Ans :a
81) Intra group balances and transactions resulting in unrealized profits a)should be eliminated
in full
b)should be eliminated to the extent of holding company's share
c)need not be eliminated
d)should be eliminated to the extent the management thinks appropriate Ans: a
82)Vijay Ltd acquired 60,000 shares of Rs 10 each in Manoj Ltd on 1st September 2021 at cost
of Rs.6,50,000, the share of capital profit of holding company and minority interest was Rs
2,50,000 and Rs 1,2,5000 respectively, the Goodwill/Capital Reserve will be
a] Capital Reserve Rs 2,00,000 b] Goodwill Rs 2,00,000
c] Capital Reserve Rs 50,000 d] Goodwill Rs 50,000
83] SK Ltd acquired 70,000 Shares of Rs 10 each of DK Ltd [ Total shares 1,00,000] on 1 st
April 2022 at a cost of Rs 9,25,000, the share of Capital and Revenue profit are ascertained at
Rs 1,90,000 and 2,70,000 respectively. The minority interest is amounted to
a) Rs 4,60,000
b) Rs 6,22,000
c) Rs 4,38,000
d) Rs 1,38,000
84)H Ltd is the holding company of S Ltd, the closing stock of S Ltd is Rs 2,60,000 included
goods of Rs 75,000 purchased from H Ltd, H Ltd invoiced goods at cost plus 25%, the
unrealized profit is
a. Rs 65,000
b. Rs 52,000
c. Rs 18,750
d. Rs 15,000
85) Revenue profits for consolidated financial statement are profit of
a) Post acquisition profit of Subsidiary Company
b) post acquisition profit of Holding Company
c) Pre acquisition profit of Holding Company
d) Pre acquisition profit of Subsidiary Company
86) If the amount of investment of holding company in subsidiary company is less than the
nominal value of share capital acquired by the holding company, the difference represents,
a. General Reserve
b. Capital Reserve
c. Goodwill
d. Securities Premium Ans: b
87)If the acquisition is on the last day of the current accounting year of the subsidiary
company, its entire balances in the Reserves shown in the closing balance sheet of the current
year are taken as
a)Cost of Investment
b)Minority interest
c)Capital profit
d)Revenue profit Ans: a
88) ASD Ltd. with 80% shares of SKR Ltd. supplied goods to SKR Ltd. for Rs. 50,000 with a
profit of 10% on sale. 40% of the goods are still in the stock of SKR Ltd. The unrealized profit
on stock is
a)Rs.5000 b)Rs. 2500
c)Rs. 1600
d)Rs. 1000
Ans: c
89) Reduction in the value of Fixed assets after the date of acquisition should be treated as
            - a)Capital Profit b)Revenue profit
c)Capital loss
d)Revenue Loss Ans: d
90) Included in the stock of subsidiary company are goods to the value of Rs.48,000 which
were supplied by Holding company at a profit of 33 1/3% on cost. The amount of unrealised
profit is
a) Rs 6000
b) Rs 4000
c) Rs 3000
d)Rs 12000
Ans: d

91) Details of subsidiary company: Reserves Rs.18,000, 8,000 Equity shares of Rs.10 each
owned by Holding company(80%): Cost of investment in subsidiary company by Holding
company Rs.1,50,000: The amount of Goodwill is
a)Rs.27,800 b)Rs.47,200 c)Rs.1,07,800 d)Rs.55,600
Ans: d
92) The time interval between the dates of balance sheet of holding company and subsidiary
company
a)Can be up to 1 year
b)Cannot be more than 6 months
c)Can be more than 6 months
d)Can be more than 1 year Ans : b
93) Preparation of consolidated statement as per AS 21 is a)Optional
b)Mandatory for listed companies c)Mandatory for Pvt Ltd Companies Ltd. d)Partnership
firm
Ans: b
94) Parent Company may consolidate               a)Only domestic companies

b)Only Foreign Companies

c)Both Domestic and Foreign Companies
d)Joint ventures Ans: c
100) The debtors of A Ltd. include Rs. 7,500 owed by B Ltd. At the time of consolidation

a)reduce Rs.7,500 from debtors in consolidated balance sheet

b)reduce Rs. 7,500 from both debtors and creditors in consolidated balance sheet
c)reduce Rs.75,00 from creditors in consolidated balance sheet
d)add Rs.7,500 to debtors in consolidated balance sheet Ans: b
101) When the reporting dates are different, the subsidiary company often prepares, for
consolidation purposes, statements as at                                
a)31st December.
b)the same date as that of the parent.
c)every six month
d)same date as that of the Competitors Ans: b
102) Dividend to be declared from Revenue profit is to be                     a)deducted from Capital
profit
b)added to capital profit
c)deducted from Revenue profit
d)added to revenue profit Ans: c
103) Dividend to be declared from Capital profit is to be                     a)deducted from Capital
profit
b)deducted from Revenue profit
c)added to capital profit
d)added to revenue profit Ans: a
104) Capital profits are the             .
a) Profits earned by the subsidiary company from sale of fixed assets
b) Profits earned by the holding company as a result of consolidation
c)Profits earned by the subsidiary company as a result of consolidation
d) Profits earned by the subsidiary company before the acquisition of shares by the holding
company.
Ans:d

105) As per AS 21, a subsidiary company should be excluded from consolidation

when                         
a) Control is intended to be temporary
b) Control is intended to be permanent
c)They are not similar type of business d)Subsidiary company a foreign company Ans: a

106) ABB Ltd. acquired 3,200 equity shares of BCK. Ltd. for Rs. 100 each on 31st Dec. 2020.
The share capital of BCK. Ltd. was 4,000 shares of Rs.100 each. The proportion of holding
will be                                  
a) 4/5 : 1/5
b) 2/3 : 1/3
c) 3/5 : 2/5
d) 1/2 : 1/2 Ans: a
107)HAL Ltd. acquired 75% shares in SPR Ltd. SPR Ltd. supplied to HAL Ltd. goods of the
invoice value of 50,000 of which 60% of the goods were still in stock of HAL Ltd. SPR Ltd.
made a total profit of 10,000 on goods sold to HAL Ltd. At the time of preparation of
consolidation of balance sheet, the adjustment is to
a) Reduce 5,625 from Stock account
b) Reduce 1,500 from minority interest
c) Reduce 5,625 from Profit & Loss account
d) Reduce 4,500 from Stock account Ans: b
108) i)Share of Holding company in its subsidiary company shares on 30th October, 2020 :
75%, ii)If Value of building of subsidiary company is increased by Rs.3,00,000 : The share of
capital profit of minority interest is             
a) Rs 2,25,000
b) Rs 3,00,000
c) Rs 37500
d) Rs 75000
Ans: d

109. Goodwill has              value.

a. Realisable
b. c.Fictitious
20
d. 2 Ans : c

115. Quoted shares are those shares which are                          

a. Listed on the stock exchange
b. quoted daily
a. Goodwill = Super profit x Annuity factor
b. Goodwill = Super profit x No. of years purchase
c. Goodwill = Average profit x No. of years purchase
d. Goodwill = Weighted average profit x No. of years purchase Ans : c
120. Value of a Partly Paid equity Share is equal to                      
a. Value of fully Paid Share - calls unpaid per share
b. Calls in arrears per share
c. Paid up value per share
d. Authorized value per share Ans : a
121. Business valuation is a process or a set of procedures that is used to estimate the
           value of the owner’s interest in a business.
a. Market
b. Face
c. Economic
d. Historic Ans : c
122. To calculate free cash flow under DCF method of valuation of Business non-cash
expenses are added to                    
a. Profit before tax
b. Profit after Tax
c. Profit after Preference dividend
d. Profit before Interest and Tax Ans : b
123. The formula for valuation of equity shares is                      multiplied by the price-
earnings ratio.
a. Interest per share
b. Bonus per share
c. Earnings per share
d. Risks per share Ans : c
124. Which of the following is not essential to calculate the yield value per share
                      ?
a. Super profit
b. Paid-up value
c. Normal return rate
d. Expected return rate Ans : a
125. The market-based methods for the valuation of a share should not be adopted if

a. The assets of a business are lesser than its liabilities

b. The company is too small
c. It becomes difficult to estimate the realisable value of a going concern
d. There are massive fluctuations in its market price Ans : d
126.                is the main reason why the intrinsic value of a share is lesser than its market
value.
a. The market is undervaluing the share
b. The market is overvaluing the share
c. The share has a low level of risk
d. The share offers a high dividend payout ratio Ans : b
127. Fair value is the of intrinsic value and yield value.

a. Average
b. Total
c. Net
d. Difference Ans : a
128. P/E ratio is a relationship between                           and                      
a. Market Price/ Earnings Per Share
b. Net Profit / Earnings Per Share

c. Gross Profit / Earnings Per Share

d. Loss / Earnings Per Share Ans : a
129. Yield value is based on the assumption that                          
133. Which of the following Accounting Standard deals with Intangible
Assets                    ?
a. AS-22
b. AS-24
c. AS-26
d. AS-28 Ans : c

134. The profits of last 5 years are Rs. 80,000; Rs. 67,500; Rs. 52,500; Rs. 75,000 & Rs.
80,000. Find the value of goodwill                       if it is calculated on average profits of
last 5 years on the basis of 3 years of purchase.
a. Rs. 2,13,000
b. Rs. 1,91,250
c. Rs. 63,750
d. Rs. 2,13,750
Ans : a

135. Find the goodwill of the company from the following information:

Total Capital Employed = Rs. 8,00,000 Reasonable Rate of Return = 15% Profits for the
year = Rs. 12,00,000 Use capitalization method.
a. Rs. 82,00,000
141. One of the following is not classification of goodwill on the basis of nature
of animals             
a. DOG Goodwill
b. CAT Goodwill
c. RAT Goodwill
d. LION Goodwill Ans : d
142. Weighted average method of calculating goodwill is used when               .
a. Profits are not equal
b. Profits show a trend
c. Profits are fluctuating
d. Profits are equal Ans : b
143. The profit of the last three years is 80000, 40000, 60000. Value of goodwill of 2
years purchase of average profit is                   
a. 1,80,000
b. 1,26,000
c. 1,20,000
d. 1,40,000

Ans : c
144. Assets of the firms are 7,50,000 (excluding goodwill) and Liabilities are 2,50,000.
The profits for the last three years were:
31 March,2022– 68,000:
st

31 March,2021- 82,000;
st

31 March,2020- 90,000;
st

Normal rate of return is 10%.

You are required to find out the value of goodwill On the basis of capitalisation of
Super profit. Value of goodwill of the firm?
a. 70,000
b. 7,00,000
c. 5,00,000
d. 3,00,000
Ans : d
145. Average Profit of the firm is Rs. 1,50,000. Total tangible assets in the firm
are Rs.12,00,000 & outside liabilities are Rs.7,00,000. In the same type of business, the
normal rate of return is 20 %. Calculate the value of goodwill of the firm by Capitalisation
of Super Profit method .Value of goodwill ?
a. 2,50,000
b. 1,00,000
c. 50,000
d. 5,00,000
Ans : a
146. The shares appear at                    in the balance sheet of a company.

a. Paid-up value
b. Market price
c. Adjusted market value

d. Authorized value Ans : a

147. AS -21 deals with                      

a. Amalgamation
b. Cash flow statement
c. Consolidated financial statements
d. Accounting for price level changes

Ans. C
 148 Shareholders who refuse to sell their shares to the transferee company under the
terms of amalgamation is known as _               
a. Assenting share holders
b. Dissenting share holders
c. Contributories
d. Minority share holders

Ans. B

149. A new company is formed to take over the assets and liabilities of old company
in the case of                
a. Amalgamation
b. Absorption
c. Internal reconstruction
d. External reconstruction

Ans. B

150. Any payment to preference shareholders in excess of paid up value of preference shares
is debited to                   account
a. Capital A/C
b. Preference share holders’ A/C
c. Realisation A/C
d. Securities premium A/C

Ans. C
 Q.3 . The summarized balance sheets as on 31st March 2020 of the two companies.
Summary Balance Sheets as on 31st March, 2020

Liabilities H Ltd. S Ltd. Assets H Ltd.

Share Capital (Rs. 100 each Investments in S Ltd. (at

5,00,000 2,00,000 1,62,400
fully paid) Cost) 60%

General Reserves 1,00,000 50,000 Fixed Assets 3,00,000

Profit & Loss A/c 60,000 35,000 Current Assets 2,77,600

Trade Payable 80,000 60,000 Preliminary expenses

7,40,000 3,45,000 7,40,000

You are Given that:

H Ltd. acquired the share

on 1st April 2019 on which
date General Reserve and
profit and loss Account of
S Ltd. showed balances of
Rs. 40,000 and Rs. 8,000
respectively. No part of
preliminary expenses was
written off during the year
ending 31st March, 2020.
Calculated Capital Profit,
Revenue profit, Cost of
Capital and Minority
interest.

Answer:

Capital Profit: Rs. 42,000

 Revenue Profit : Rs. 37,000

Cost of Capital : Goodwill

Rs. 17,200

Minority Interest : Rs.

1,11,600

Q.4 The summarized balance sheets as on 31st March 2021 of the two companies.
Summary Balance Sheets as on 31st March, 2021
Liabilities A Ltd. B Ltd. Assets A Ltd.
Share Capital (Rs. 100 each Investments in B Ltd. (at
5,00,000 2,00,000 2,05,000
fully paid) Cost) 70%
General Reserves 1,00,000 45,000 Fixed Assets 3,00,000
Profit & Loss A/c 60,000 40,000 Current Assets 2,95,000
Trade Payable 1,40,000 60,000
8,00,000 3,45,000 8,00,000
You are Given that:
A Ltd. acquired the 70%
shares on 31st March, 2020.
Calculated Capital Profit,
Revenue profit, Cost of
Capital and Minority
interest.

Answer:
Capital Profit: Rs. 85,000
Revenue Profit : Rs. NIL
Cost of Capital : Goodwill
Rs. 5,500
Minority Interest : Rs. 85,500

Q.5 Universe Ltd acquired 12,000 shares Earth Ltd for Rs.2, 60,000 on 1 st October, 2021. The Balance sheets of the two
Liabilities Universe LtdEarth Ltd Assets Universe Ltd
 Equity Share Capital (of Rs.10 8,00,000 2,00,000 Fixed Assets 10,40,000
General Reserve 1,20,000 40,000 Investment(12,000) equity share 2,60,000
Profit & Loss A/c :
1,60,000 80,000 Current Assets 2,40,000
-on 1-4-2021
-Current year 2,00,000 1,00,000
Current Liabilities 2,60,000 1,20,000
15,40,000 5,40,000 15,40,000
Calculate following data required to prepare consolidated Balance sheet
1.       Working of Capital Profit and Revenue profit of Earth Ltd
2.       Goodwill or Capital reserve
3.       Non-controlling Interest (minority interest)
4.       Notes to accounts of Share Capital and Reserve & Surplus

Ans: CP -1,70,000RP- 50,000Goodwill-3Minority Int- 1,68,000 Share cap-

MS Ltd. Acquired 75% of

equity shares of Rs.10 each in
SS Ltd on 31st July, 2021. The
summarized balance sheet of
the two companies as on 31st
march, 2022 were as follows:

Q.6
Liabilities MS Ltd SS Ltd Assets MS Ltd
Equity Share Capital (of Rs.10 24,00,000 6,00,000 Fixed Assets 16,50,000
General Reserve 4,50,000 1,80,000 Investment(equity shares in SS Ltd)
8,40,000
Profit & Loss A/c 2,70,000 1,95,000 Current Assets 9,90,000
Trade Payables 3,60,000 2,40,000
34,80,000 12,15,000 34,80,000
SS Ltd earned a profit of Rs.1, 80,000 for the year ended 31 st March 2022.
Calculate following data required to prepare consolidated Balance sheet
1.       Working of Capital Profit and Revenue profit of SS ltd
2.       Goodwill or Capital reserve
3.       Non-controlling Interest (minority interest)
4.       Notes to accounts of Share Capital and Reserve & Surplus

Ans: CP-2,55,00RP- 1,20,0 Goodwill- 1,98,750 Minority in

Q.7 Sona Ltd acquired 7,500 shares in Mona Ltd for Rs.77,500 on 1 st July, 2021. The Balance sheets of the two compani
Liabilities Sona Ltd Mona Ltd Assets Sona Ltd
Equity Share Capital (of Rs.10 450,000 125,000 Fixed Assets 400,000
General Reserve 80,000 20,000 Investment(7,500 equity shares 77,500
Profit & Loss A/c 40,000 12,500 Current Assets 132,500
 Trade Payables 40,000 23,000
610,000 180,500 610,000
The following additional information is provided to you:
1.       Profit earned by Mona
MonaLtd
Ltdfor the year ended 31 March, 2022 amounted to Rs.10,000
st

2.       General reserve balance

appearing in the balance
sheet of Mona Ltd has
remained unchanged since 1st
April, 2021.

Calculate following data required to prepare consolidated Balance sheet

1.       Working of Capital Profit and Revenue profit of Mona ltd
2.       Goodwill or Capital reserve
3.       Non-controlling Interest (minority interest)
4.       Notes to accounts of Share Capital and Reserve & Surplus

Q.8 The Balance sheets of the Big Ltd. & Small Ltd. companies as on 31 st Dec, 2021 were as follows:
Liabilities Big Ltd Small Ltd Assets Big Ltd
Equity Share Capital (of Rs.10 4,00,000 1,00,000 Fixed Assets 3,90,000
General Reserve 1,00,000 40,000 Investment 1,20,000

Profit & Loss A/c (1/1/2021) 60,000 15,000 Current Assets

1,90,000
Profit for the year 2021 1,00,000 40,000
Trade Payables 40,000 20,000
700,000 2,15,000 700,000
The following additional information is provided to you:
1.       Big Ltd. Purchased on 1st July 2021, 8000 shares in Small Ltd. @Rs. 15 per share
Calculate following data required to prepare consolidated Balance sheet
1.       Working of Capital Profit and Revenue profit of Small ltd
2.       Goodwill or Capital reserve
3.       Minority Interest
4.       Notes to accounts of Share Capital and Consolidated Profit & Loss A/c
S Ltd.

1,00,000

2,39,000

6,000

3,45,000
 B Ltd.

1,00,000
2,45,000

3,45,000

. The Balance sheets of the two companies as on 31st March, 2022 were as follows:
Earth Ltd
 nil
nil

5,40,000

5,40,000

R/S -5,10,000

SS Ltd
3,00,000
--
9,15,000

12,15,000

S/Cap- 24, R/S- 8,10,000

ance sheets of the two companies as on 31st March, 2022 were as follows:
Mona Ltd
110,000

70,500
 180,500

re as follows:
Small Ltd
1,40,000

75,000

2,15,000
 Q.1) Gamma Ltd. on 1st April 2020 borrowed 9% Rs.
30,00,000 to finance the construction of two qualifying
assets. Construction started on 1st April 2020. The loan
Q.1 facility was availed on 1st April 2020 and was utilized as
follows with remaining funds invested temporarily at
7%.

Particulars Factory BuOffice Building

1st April 2020 5,00,000 10,00,000
1st october 5,00,000 10,00,000
Calculate the cost of the asset and the borrowing cost to be capitalized.
 Q.2. Yash ltd has a treasury department that arranges
funds for all the requirements of the company including
funds for working capital and expansion programs.
Q.2 During the year ended March 31,2021, the company
commenced the construction of a qualifying asset and
incurred the following expenses :

Date Amount
01/Jul/20 2,50,000
01/Dec/20 3,00,000
The details of borrowings and interest thereon are as under :
Particulars Average ba
Interest
Long term loan @ 10% 10,00,000 1,00,000
Working Capital loan 5,00,000 65,000
15,00,000 1,65,000
Compute the borrowing cost that needs to be capitalised.

Q.3 Q.3. The following information relates to M/s Nimbalkar Company Ltd., a listed company with five divisions of oper
Particulars Divisions (Rs. in Million)
A B C
Revenue from external customers 200 45 45
Inter-segment Revenue 20 - 5
Reported Profit 40 9 10
Total Assets 1500 300 400
Which of the above business divisions are reportable segmnets under IND AS 108 Operating Segments ?
Q.4 Q.4. Profit attributable to ordinary equityholders of the p Rs.180
Profit attributable to ordinary equityholders of the parenRs. 600
Ordinary shares outstanding until 30 September 2021 200
Bonus issue 1st October 2021: 2 ordinary shares for each ordinary share oustanding at 30th September, 2021.
Calculate Basic EPS for both the years.

Q.5 Q.5.Calculate Basic EPS as per IND AS 33 from the following information:
Share Capital as on 1/4/2020, 1 Lakh Equity Shares of Rs. 10 each.
Issue of Right Shares for cash on 1/7/2020 in the ratio of 1 share for every 5 shares held.
Issue of Bonus Shares (excluding right shares) in the ratio of 1 share for every 5 shares held.
Net Profit (before tax) for 2020-21, Rs. 4 lakh . Income Tax Rate is 40%.

Q.6. An asset which cost Rs. 150 has a carrying amount

Q.6 of Rs. 100. Cumulative depreciation for tax purposes is
Rs. 90 and the tax rate is 25%. Calculate the tax base.

Q.7 Q.7. Sun Ltd. incurs the following costs in relation to the construction of a new factory and the introduction of its pr
Particulars Cost incurred Rs. '000
Site Preparation Costs 150
Direct Material 2,000
Direct labour Cost, including Rs. 10,000 incurred during an 1,160
Testing of various processes in factory 200
Consultancy fees for installation of equipment 300
Relocation of staff to new factory 450
General overheads 550
 Estimated cost to dismantle (at present value) 200
Ascertain the total cost to be capitalized as per IND AS 16.

Q.8 Q.8. Anand Ltd. is installing a new plant at its production facility. It has incurred the following costs:
Particulars Amount
Cost of the plant (cost per supplier's invoice plus taxes) 25,00,000
Initial delivery and handling costs 2,00,000
Cost of site preparation 6,00,000
Consultants used for advice on the acquisition of the plan7,00,000
Interest charges paid to supplier of plant for deferred cre 2,00,000
Estimated dismantling costs to be incurred after 7 years 3,00,000
Operating losses before commercial production 4,00,000
Calculate the costs that can be capitalized as per IND AS 16.

Q.9 Nishad Ltd. Is negotiating the acquisition of a special machinery for its factory (5 Marks)
1. A special site is developed for installation of the machinery, cost of construction of the same is Rs.12000
2. Cost of new machinery Rs. 400000.
3. Spent Rs. 8000 on freight and Rs. 6000 on installation.
4. Spent on trial run Rs. 8000.
5. Spent Rs. 10000 for launching the product.
Find out cost of machinery as per Ind AS 16.

Q.10 Interest receivable has a carrying amount of Rs. 10000. The related interest revenue will be taxed on cash b
pany with five divisions of operation, for the year ended March 31, 2021.

perating Segments ?
at 30th September, 2021.

ry and the introduction of its products to the local market.

following costs:

(5 Marks)
ction of the same is Rs.120000.

venue will be taxed on cash basis. Calculate taxable temporary difference.