Assignment No 1 (Non- Graded)
Advanced Financial Accounting (FIN611)
Total marks = 20
Due data 13th FEB 2014
Question #1LMS (Pvt) Limited has the following loans due as on December 31, 2012.
LOAN AMOUNT
Loan – 1 @ 6% Rs. 300,000
Loan – 2 @ 9% Rs. 150,000
All the two loans were brought forward from previous year. Neither loan is acquired nor paid during the year.
The company spent following amounts on construction of an asset.
PERIOD AMOUNT
January 01, 2012 Rs. 70,000
April 01, 2012 Rs. 80,000
October 01, 2012 Rs. 10,000
Calculate: Marks 10=(5+5)
1. Capitalization Rate
2. Borrowing cost eligible for capitalization
Note; account are closed on 31st December each year.
Question #2
Style limited has issued 700,000 ordinary shares of RS.10 each. The company has also issued RS.1000000 of 12% convertible bond in 2014, convertible in three years’ time at of 2 per share of RS.12 stock. Total amount of 2000000 at 10% convertible loan stock, convertible in one year’s time at the rate of 3 shares per RS 15 stock. Total earnings in 2014 are RS. 2500000 while tax rate for company 35%.
Required: Basic EPS and Diluted EPS Marks 10=(3+7)
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