FINANCIAL REPORTING & FINANCIAL STATEMENT ANALYSIS PAPER – DSE 6.

1A
FM – 80

Group – A (5x3=15)

1. Define an Accounting Standard. Write the features of an Accounting Standard.

(2+3)
Or/
Write a short note on INDAS 33.
2. From the following details, Calculate Fixed Assets.
Current Assets `1,50,000 Current Liabilities `1,29,000. Fixed assets to
proprietorship fund ratio is 0.7:1.
3. Define fund flow statement. Explain the advantages of a fund flow statement.
(2+3)
Or/
From the following details of X ltd as on 31.3.2020, Prepare a Cash flow
statement.
I) Opening Cash & Cash equivalents as on 1.4.2019 `20,000.
II) Profit on sale of machinery `10,000.
III) Net profit during the year after depreciation `1,75,000.
IV) Increase in Current liabilities `1,50,000.
V) Increase in current assets `1,25,000.
VI) Sale of machinery `1,70,000.
VII) Purchase of machinery `2,50,000.
VIII) Repayment of lone `1,60,000.
IX) Redemption of Debentures `1,00,000.
X) Tax paid `5,000.

Group – B (10x2=20)
4. Discuss the discloser policies according to INDAS 1 and INDAS 16.
5. What do you mean by Financial Statement Analysis? Who are the users of
Financial Statements? Why does the analysis of financial statements is needed?
(2+3+5)
Or/
I) Differentiate between a Comparative Statement and a Common Size
Statement. (4)
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II) From the following trends by considering 2015 as base, Prepare an Income
Statement and calculate profit for each year. (6)

Year 2016 2017 2018 2019 2020 2020

(in %) (in %) (In %) (in %) (in %) (in `)
Sales 110 130 170 200 250 2,50,000
Cost of 125 130 150 160 200 1,40,000
goods
sold
Purchases 105 115 125 150 180 27,000

Group – C (15x3=45)
6. Write a short note on the following ratios. (3x5)
I) Debt – Equity ratio. IV) Liquidity Ratio
II) Operating ratio V) Fixed Assets to turnover ratio
III) Return on Investments.
Or/
A) From the following information’s, prepare a Profit & Loss A/C &

Balance Sheet as on 31.3.2020. (10)

I) Gross profit ratio 25%.

II) Net profit ratio 10% on Equity share capital.
III) Stock turnover ratio 5 times.
IV) Creditors velocity 3 months.
V) Current ratio 2:1
VI) Proprietorship ratio (Fixed assets to capital employed) 80%.
VII) Capital gearing ratio(Pref Share & Debenture to Equity share) 3:7.
VIII) Reserves & Surplus 25%.
IX) Preference share to debentures 2:1.
X) Cost of sales includes 40% of material and remaining for wages &
overhead. Gross profit during the year is `6,00,000.
B) From the following details calculate the average debt collection period
assuming 360 days in a year. (5)
I) Average inventory `1,80,000.
II) Average Debtors `1,20,000.
III) Credit sales is 20%.
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IV) Gross profit ratio is 10%.
V) Stock turnover ratio is 6 times.
7. From the following information’s, Prepare a Fun flow statement for the year
ended 31.3.2020.
Balance Sheet as on 31.3.2019 & 31.3.2020.

Particulars Note No 31.3.2019 31.3.2020

(in `) (In `)
1 Equity & Liabilities
(1) Share Holders
Funds
(a) Share Capital 2,00,000 3,00,000
(a) Reserves & Surplus
(i) General Reserves 55,000 70,000
(II) P/L 40,000 25,000
(III) Securities Premium 10,000 20,000
(2) Non-Current
Liabilities
8% Debentures 80,000 60,000
(3) Current Liabilities
Trade Payables
Creditors 40,000 60,000
Bills Payable 20,000 15,000
Outstanding expenses 5,000 3,000
Provision for taxation 30,000 20,000
Total 5,80,000 5,73,000
2. Assets
(1) Non-Current Assets
(a) Plant property &
Equipments
(I) Land & 1,00,000 90,000
Buildings
(II) Plant & 1,50,000 2,00,000
Machinery
(b) Intangible Assets: 30,000 10,000
Goodwill
(2) Non-Current 50,000 70,000
Investments
 (3) Current Assets
(a) Inventories 85,000 1,50,000
(b) Trade 40,000 30,000
Receivables:
Debtors
(c) Bills receivables 10,000 15,000
(d) Cash & Cash 15,000 8,000
equivalents
Total 4,80,000 5,73,000

Additional Information’s:
I) Depreciation charged on plant & machinery `20,000.
II) A plant book value `40,000 were sold for `32,000.
III) Tax paid during the year `24,000.
IV) Interest on investments received `7,000.
V) Interim dividend paid `12,000.
VI) Proposed dividend as on 31.3.2019 & 31.3.2020 were `25,000 and `30,000
respectively.
Or/
From the above details given to you, prepare a cash flow statement as on
31.3.2020.
8. H ltd & S ltd provides you their balance sheet as on 31.3.2020. Prepare a
Consolidated Balance Sheet on that date.
Balance Sheet as at 31.3.2020

Particulars Note No H ltd S ltd

(in `) (In `)
1. Equity & Liabilities
(I) Share holders’ funds
(A) Share Capital 6,00,000 2,00,000
(B) Reserves & Surplus 1 6,00,000 1,80,000
(II) Non-Current Liabilities
(III) Current Liabilities
(A) Trade Receivables
Creditors 70,000 50,000
Bills Payables 25,000 5,000
Total 12,95,000 4,35,000
2. Assets
 (I) Non- Current Assets
(a) Plant, Property & 2 7,00,000 2,00,000
Equipments
(b) Non-Current 1,80,000
investments in S ltd
(II) Current Assets
(a)Inventory 1,80,000 1,20,000
(c) Trade Receivables
Debtors 80,000 20,000
Bills Receivables 25,000
© Cash & Cash 1,30,000 95,000
equivalents
Total 12,95,000 4,35,000

Notes to Accounts
Note No Particulars H ltd S ltd
1 Reserves & Surplus
General Reserves 4,00,000 1,00,000
Profit & Loss 2,00,000 80,000
Total 6,00,000 1,80,000
2 Plant, property &
equipments
Land & Building 5,00,000 1,50,000
Plant & Machinery 2,00,000 50,000
Total 7,00,000 2,00,000

Additional Information’s:
I) H ltd acquires 14,000 equity shares on 1.9.2019.
II) On 1.4.2019, the balances on General Reserves and P/L were `30,000 and
`20,000 respectively.
III) On 1.7.2019 S ltd issued 1 bonus shares for every 4 shares held in S ltd.
IV) S ltd declared dividend for the financial year 2018 – 2019 as on 31.5.2019
amounted to `50,000 which will distribute as per the shares holdings and it
will also be a part of consolidated balance sheet.
V) S ltd incurred `5,000 as a preliminary expenses.
VI) During the year the amount of Bills payable of H ltd were increases by
`5,000 and all the bills payable of S ltd were taken over by H ltd.