International Accounting Practices — Winter 2022

Explain the following terms:

Bills Receivable

A=C+L

Revenue Expenses V/s Deferred Revenue Expenses

Secured Loan

Insolvency

Tax Haven

Brownfield Investment

The following Trial Balance is drawn by a person who is not well versed in the accounting process. You are required to re-draft the Trial Balance correctly. Trial Balance for the year ended March 31, 2020 Particular Debit Credit Capital 53,700 Stock (1/4/2019) 22,350 Insurance 6,300 Sales 2,36,550 Purchases 1,38,600 Salary Expenses 37,230 Lighting and Heating 1,860 Plant and Machinery 21,600 Delivery Expenses 1,380 Rates Paid 2,340 Depreciation Accumulated 2,100 Rent Paid 6,690 Rent Received 3,630 Delivery Vehicle 8,850 Cash Balance 660 Trade Creditors 29,550 Trade Debtors 83,520 Carriage Outward 3,000 Outstanding Rent 3,000 Bank Overdraft 5,850 Total 3,34,380 3,34,380 Page 1 of

International Accounting would involve accounting for offshore transactions of a MNCs’ – Discuss the difficulties of International Accounting in the light of given statement.

Generally Accepted Accounting Principles vary country to country. Discuss any four Indian GAAP with appropriate examples.

eXtensible Business Reporting Language (XBRL) is a language for the electronic communication of business and financial data. Discuss the Importance of XBRL and its application.

Journalize the following transactions in the book of M/s Montu & Brothers for the month of April-2022. April 1, 2022 – Capital 2,00,000; Debtors 20,000; Cash-in-hand 5,000; Cash at Bank 7,000; Creditors 22,000; Stock 15,000; Machinery 1,50,000; Furniture and Fixtures 25,000 April 2, 2022 – Received 1,500 from Mohamed in full settlement of his account of 2,000 April 3, 2022 – Received 1,500 from Xavier on his account for 2,000 April 10, 2022 – Paid 1,400 to Guru in full settlement for 1,500 April 15, 2022 – Paid 1,400 to Veer Singh on his account for 1,500 April 25, 2022 – Received first and final dividend of 70 paise in the rupee from the official receiver of Mr. Rao who owed 3,000 April 30, 2022 – Wages paid 1,000 for erection of plant

Journalize following transactions in the book of Pavitra Pvt. Ltd. for the Month of March – 2022 March 1, 2022 - Sold goods for 1,25,000 March 3, 2022 - Sold goods to Sathyan for 25,000 March 5, 2022 - Sold goods to Kashyap for 20,000 against a cheque March 7, 2022 - Sold goods to Ajay of the list price of 50,000 at the trade discount of 10% March 9, 2022 - Sold goods to Vas of the list price of 90,000, less with 10% trade discount and received a cheque under a cash discount of 5%. March 11, 2022 - Sold goods to Dev of list price of 90,000, less with 10% trade discount and 5% cash discount and paid 50% by cheque Page 2 of March 13, 2022 - Sold goods to Gopi costing 1,00,000 for cash at a profit of 25% on cost less 10% trade discount and charged 12 % GST and paid package charge of 1,000.

IFRS published by IASB are the game changer for the disclosure practices in Accounting. Discuss the concept of IFRS and its challenges for implementation.

From the below given information of Maruti India Pvt. Ltd. analyze comparative analysis of the firm and interpret the result thereof. Particular 2020 2021 Shareholder’s funds: Share Capital 2,00,000 2,00,000 Reserve & Surplus 20,000 10,000 Total (A) 2,20,000 2,10,000 Liabilities: Secured Loans 50,000 80,000 Unsecured Loans 1,50,000 60,000 Current Liabilities & Provisions 80,000 50,000 Total (B) 2,80,000 1,90,000 Grand Total (A+B) 5,00,000 4,00,000 Fixed Assets (Net) 3,00,000 2,40,000 Investments 5,000 4,000 Inventories 1,00,000 80,000 Debtors (Net) 80,000 66,000 Cash 15,000 10,000 Grand Total 5,00,000 4,00,000

State the objectives of International Taxation. Briefly explain Home Government and Host Government International Tax Policies.

“Analysis of Financial Statement is very crucial task for Business Manager” – Do you agree with the statement? Briefly explain Trend analysis method with hypothetical figures with proper interpretation of the results.

Acompany having a net working capital of 5,00,000 as on 31-3-2020 indicates the following financial ratios and performance figures: Current Ratio : 3.5 Liquidity Ratio : 1.5 Inventory turnover (on cost of sales) : 6 times Gross Profit on sales : 20% Fixed Assets Turnover Ratio (on cost of sales) : 2 times Debt collection period (months) : The company’s fixed assets is equivalent of 80% of its net worth (share capital plus reserves), while reserves amounted to 50% of share capital. Prepare the Balance Sheet of the company as on 31-3-2020. Page 3 of

The following trial balance of Fuket Pvt. Ltd. as on 31-12-2022. (Amount in ‘000) Debit Balance Amount Credit Balance Amount Printing and Stationery 500 Capital 89,000 Opening stock 30,000 Sales 1,20,000 Drawings 10,000 Creditors 37,000 Purchase 60,000 Goods return 500 Debtors 55,000 Bad debts reserve 1,900 Plant and machinery 40,000 Bank O.D. 800 Building on Lease 40,000 Discount 600 (from 1-7-2022 for 5 years) Repairs 500 Goods return 1,000 Discount 220 Interest on Bank O.D. 80 Wages, carriage & octroi 5,200 Salesman’s commission 600 Bad debts 400 Salary 5,000 Insurance, rate and taxes 800 Cash balance 500 2,49,800 2,49,800 Adjustments: (Amount in ‘000) 1. The closing stock is valued at 20,000 and includes damaged goods worth 4000 which is estimated to realize 2000. 2. Depreciate plant and machinery at 10%. 3. 100 is outstanding for salaries. 4. Insurance includes 50 prepaid and 100 for life insurance premium. 5. Out of the debtors 1000 is to be written off as bad debts and provision of 5% on debtors is to be made for doubtful debts. 6. Goods worth 1000 is burnt by fire against which the insurance company accepted a claim of 800. 7. Stock of stationery on 31-12-2022 is 100.

Prepare all the schedules of P & L & Balance Sheet from the above information

Prepare Profit and Loss Statement and final Balance Sheet from the above information

Calculate following ratios from the above information: 1. Current Ratio 2. Liquid Ratio 3. Debtors Ratio (Considering entire credit sales and 360 days)