(01) The summarized trail balance of “Asiri”plc prepared as at 31st March 2022 is given below.

Description Rs 000 Rs 000

Property plant and equipment
Machines 6500
Motor vehicles at cost 15000
Office equipment at cost 4500
Accumulated depreciation as at 01st April 2021
Machines 1300
Motor vehicles 4500
Office equipment 1800
Sales 32000
Cost of sales 10500
Trade receivables 10800
Trade payables 4050
Closing stock as at 31st March 2022 1500
Cash and cash equivalents 800
Dividend paid 1000
Provision for sales warranty as at 01st April 2021 750
Stated share capital- ordinary shares 18000
Machine revaluation reserve as at 01st April 2021 800
Retained earnings as at 01st April 2021 3750
Distribution cost 4800
Administration expense 4500
Other expense 4750
Finance cost 1200
Tax paid (2021/2022) 1100
66950 66950

Additional information
Following adjustments should be made before preparing financial statements for the year ended 31 st
March 2022.
I. Business is conducted in a rented building at annual rent of Rs 240000.Total rent paid of Rs
360000 has been included in the administration expense.
 II. On 01/04/2021 machines were revalued again for Rs 4600000.Revaluation reserve give in the
trial balance shows the surplus generated from the revaluation of machines made in a previous
year. After revaluation, Useful life of the machine was re-estimated as four years and no scrap
value. No entry has been made regarding the current year revaluation.
III. Office equipment which was purchased on Rs 01/10/2019 for Rs 2500000 was sold for Rs
2000000 on 01/10/2021.No entry has been made in this regard other than debiting sales
proceeds to the cash account and crediting to the sales account. Office equipment are
depreciated at 20% per on straight line basis.
IV. Motor vehicles are used for the distribution of products. Annual motor vehicle depreciation of
Rs1500000 has been debited to the administration expense while crediting to the motor
vehicle account in an error.
V. Administration expense includes paid fuel expense of directors of Rs 200000 and paid auditor
charges of Rs 300000.Accrued auditor charges is Rs 50000
VI. On 01/04/2021 company entered in to a lease agreement and acquired motor vehicle for the
use of directors for five-years period. At the same date initial payment of Rs 2900000 and
direct cost of Rs 80000 were paid in cash. Scrap value of the motor vehicle after useful life of
five years was estimated as Rs710000.Followig information is also relevant for the motor
vehicle acquired on right to use basis.
Present value of lease liability at the initial measurement Rs 1730,000
Lease interest - For current year Rs 173000
- For next year Rs 128000
Annual lease installment of Rs 625000; first installment was paid on 31/03/2022.

Initial payment, direct expense and the annual installment paid have been debited to the other
expense. No other entry has been made in this regard.
VII. Company was exempted for tax for last year and tax paid for first three quarters of the current
year is given in the trail balance and tax for the last quarter of the current year is estimated as
Rs 400,000.
VIII. Board of directors authorized the financial statements for publication on15/05/2022.
Following events were occurred before authorizing financial statements
• An employee who was sacked off during the year has filed the case against the company
by 31.03. 2022. Company lawyers reliably estimate that a compensation of Rs 400000
has to be paid.
• Cost and net realizable value of the closing stock as 31/03/2022 was estimated as Rs
1500000 and Rs 1800000.On 01/05/2022 closing stock was sold for Rs 1600000.
• A debtor of Rs 400000 who was sold goods on 10/04/2022 was declared bankrupted by
the court on 05/05/2022.
Required:

Prepare following financial statement of Asiri plc for the year ended 31/03/2022 according LKAS 01
(Presentation of Financial Statement)
1. Profit or loss and other comprehensive income statement for the year ended 31/03/2022.
2. Statement of changes in equity for the year ended 31/03/2022.
3. Statement of financial position as at 31/03/2022 (40 Marks)
(02).(A). Following information is related to a certain material used by Nadun plc for the production
process.
Date Description Quantity -units Unit cost Rs
01April 22 Balance 1000 40
06 April 22 Purchase 3000 48
11 April 22 Issued to factory 2000 ?
17 April 22 Purchase 4000 50
20 April 22 Issued to factory 4000 ?
25 April 22 Purchase 3000 52
30 April 22 Issued to factory 3500 ?
Required:

01. Prepare store ledger for the month assuming that the company uses first in first out (FIFO)
method to price the material issuance.
02. Calculate the Cost of material used for the production assuming that the company uses first
in first out (FIFO ) method to price the material issuance.
03. Calculate the Cost of closing stock as at 30/03/2022 assuming that the company uses
weighted average cost (WAC) method to price the material issuance. (15 Marks)
(B). Kalpani plc which produces handbags has two production departments as cutting and sewing and
a service department. All three departments are operated in a same building. Estimated overhead
cost of next year at its maximum capacity is given below.
Estimated Overhead cost Rs 000
Rent and rates 105
Indirect salary 1100
Machine depreciation 110
Electricity-Lighting 315
Power –Machines 525
Employee supervision cost 220
Other information.
01.
Cutting section Sewing section store
Machines cost Rs 000 4200 2400 -
Flore area used –square meters 500 500 50
No of employees 5 5 1
Running hours of machines 10000 7500 -
02. Overhead cost Store is distributed according to the running hours of machines.
03. Direct labour cost and direct material cost of producing a bag respectively are Rs 500
and Rs 1500
04. It takes two machine hours in the cutting section and three machine hours in the
sewing section to produce a bag.
Required:
1. Overhead analysis sheet clearly showing the basis of apportionment (including
reapportionment)
2. Overhead absorption rate for cutting and sewing sections
3. Calculate, Production cost of a bag
4. Calculate, Gross profit that can be earned by selling 20000 bag if selling price is decided 20%
profit on selling price. (25Marks)
(03). On 01/04/2022 Amal started a business to sell organic agro inputs under the name of “Haritha”
traders. Impact of some transactions occurred in the business during the month of April have
been recorded using an accounting as given below. (Rs000)
No Assets Liability Equity
Property Stocks Trade Cash Trade Accrued Long
plant & receivables payables expense term
equipment loans
1 2000 1500 3500
2 +1400 -600 +800
3 +400 +400
4 -900 +1200 +300
5 -50 -50
6 -540 -600 +60
7 +100 -130 -30
8 -800 +720 -80
9 -20 -20
10 -25 +5 -30
11 -50 -50
12 -10 -10
13 -200 +250 +50
14 -22 -20 -2
15 -20 -20
1980 330 210 1683 100 5 380 3718

Additional information:
01. All cash transactions are made through a bank current account. Owner has not made goods
drawings.
02. Cash control account balance of the business as at 30th April was not equal to the balance of bank
statement. It was revealed that the following transactions have not been recorded in the books of the
business.

• Direct deposit made by debtor of Rs 60000.

• Lease instalment of Rs 20000 including an interest of Rs 5000 for a motor vehicle used by
Amal for his personal use.
• Standing order payment of electricity of the business Rs 8000
• Bank charges Rs 2000.

03. Rates payable local council for the month of April was Rs 4000.
Required.
1.Describe transactions no 01 to 15 including values (30 Marks)
2.Calculte adjusted cash control account balance as at 30.04.2022 (5 Marks)
3.Calcultate profit or loss for the month of April using net asset method. (5Marks)
( Total 40 Marks)

(4). (A). Ashwinn plc registered for VAT, sells mobile phones and phone accessories. Company
purchases and sells products on cash as well on credit. Following information was taken
from the trade receivable sub ledger and trade payable sub ledger for the month of March
2022
 Trade receivable sub ledger as at 31.03.2022(Rs 000)

Name Opening Sales Cash Discount Ending

balance received allowed balance
Global traders 200 800 630 70 300
Universal traders 150 600 450 50 250
Beeta traders 250 700 540 60 350
Total 600 2100 1620 180 900

Trade payable sub ledger as at 31.03.2022(Rs 000)

Name Opening purchase Cash paid Discount Ending

balance received balance
Gamma traders 100 400 225 25 250
Alfa traders - 500 360 40 100
unique traders 150 300 150 - 300
Total 250 1200 735 65 650

Total of list of sub ledgers as at 01.03.2022 were equal to the control account balances. Balance of the
cash control account as at 01.03.2022 was Rs 80000.
Other than the cash received from debtors and cash paid to creditors, following cash transactions were
also incurred during the month.
• Cash sales and cash purchase respectively were Rs 1200000 and Rs 750000
• All sales and purchases were given without VAT.Apllicable VAT rate is 10%. VAT paid to
the inland revenue department was Rs 60000.
• Operational expense of Rs 150000 has been paid during the month.
• Old office equipment was sold for Rs230000 during the month.
• Investment income received during the month was Rs 200000
(Ignore the dates of transactions)
Required:
1. prepare following journals
i. Cash receipts journal
ii. Cash payment journal
iii. Sales journal
iv. Purchase journal
2.Prepare following accounts for the month ended 31.03.2022
i. Cash control account
ii.Trade receivable control account
iii.Trade payable control account
iv.VAT control account
3.prepare List of trade receivable and trade payable.(30 Marks)
(B). Following information was taken from the books of Malki plc for the year ended 31.03.2022.
Description Rs 000
Sales 28000
Gross profit 11200
Stocks as at 01.04.2021 3200
Stocks as at 31.03.2022 2400
Operational expense including interest 4800
Interest expense 1280
Tax expense 1600
Additional information:
4. Total assets and liabilities of the business as at 31.03.2022 respectively were Rs 20000,000 and
Rs 5000,000.
5. No of shares issued by the end of the year was 1600000
6. 20% of total assets are current assets while 25% of liabilities are current liabilities.

Calculate following ratios

1. Quick assets ratio
2. Interest cover ratio
3. Net profit ratio
4. Stock turnover ratio
5. Earnings per share (10 Marks) ( Total 40 Marks)

(05). (A). Ranga and Suranga were in a partnership sharing profits and losses equally. Business is
conducted a rented building owned by Ranga. when Wiranga admitted to the partnership
on 01/04/2021, partnership agreement was revised as given below.
• Share profit and loss at 2:2:1respectively among Ranga,Suranga and Wiranga
• Paying 10% annual interest on adjusted capital account balance.
• Paying monthly salary of Rs 30000 to Suranga and Wiranga
• Adjusting goodwill through the capital account of the partners
• Transactions related to partners, other than the goodwill and capital contribution, should be
adjusted through the current account of the partners.

Trial balance of the business prepared as at 31.03.2022 is given below.

Description Dr Cr
Capital accounts as at 01/04/2021
Ranga 3000
Suranga 2000
Current accounts as at 01/04/2021
Ranga 400
Suranga 300
Loan account –Ranga as at 01/04/2021 100
Property plant and equipment at carrying value 8000
Sales 5450
Cost of sales 3000
Operating expense 630
Closing stock at 31/03/2022 350
Cash 270
Value of motor vehicle brought by Wiranga 1000
12250 12250

Additional information:
1. Stocks costing Rs 55000 sold to a customer still remain in the store. It is also included in the
closing stocks as at 31/03/2022.
2. Business is conducted in a rented building owned by Ranga at annual rent of Rs 360000.From
01/01/2022 annual rent has increased up to Rs 480000.No entry has been kept regarding the
building rent.
 3. Salary of suranga for six months and Wiranga for 9 months have paid. Salary paid and paid
Life insurance instalment of Ranga and suranga of Rs 5000 each have been included in to the
operational expense.
4. On 01/04/2021, Newly admitted partner Wiranga brought a motor vehicle worth Rs 1000000
to the business as his share capital and goodwill. Goodwill of the business was estimated as
Rs 500000.
5. Revenue license fee of the motor vehicle transferred by Wiranga of Rs 10000 for the year
starting 01/04/2021 has been paid by Wiranga from his personal money.

Required:
1. Income statement of the partnership for the year ended 31/03/2022 including profit
appropriations,
2. Capital and current account of the partners for the year ended 31/03/2022. (20 marks).

(B). Summarized statement of financial position of Nuwan plc for the years ended 31.03.2021 and
31.03.022 are given below.

As at 31/03/2022 As at 31/03/2021
Rs 000 Rs 000
Property plant and equipment at carrying value 14300 15100
Right to use asset- motor vehicle at carrying value 4500
stocks 5100 2100
Trade receivables 4600 1400
Cash and cash equivalents 2300 1900
Total assets 30800 20500

Stated share capital – Ordinary shares 18000 12000

Revaluation reserve 1500 500
General reserve 500
Retained earnings 2900 2000
Lease creditors 3200
Trade payables 4900 5300
Provision for tax 300 200
Total equity and liabilities 30800 20500

Additional information for the year ended 31/03/2022.

1. An interim dividend of Rs 600000 was paid during the year.
2. A motor vehicle in which carrying value of Rs 1100000 was sold for Rs 1000000 on
01/04/2021.At the same date company acquired a motor vehicle on right to use basis by
agreeing to pay five equal instalments. Carrying value of the right use assets was Rs 5000000
and down payment paid was Rs 1000000 and first lease instalment has been paid and the
implicit rate of interest is 10% per annum.
3. Company has utilized Rs 1500000 from its retained earnings for bonus issue. Other than that
company made a right issue of share during the year.
4. Tax for the current year was 1/5 of net profit before tax for the period.

Required to prepare cash flow statement of Nuwan plc for the year ended 31/03/2022 according to
LKAS 07- cash flow statement. ( 20 Marks) ( Total marks 40)
(06). A. “Agro Friendly” plc engages in production of organic fertilizer is considering to invest
innew technology to produce electricity. Already they have made a feasibility study by
incurring an expense of Rs 400000.
You are provided following information related to this project.
• Initial cost of New technology Rs 5000000
• Establishment cost Rs 1000000
• Working capital requirement Rs 600000 (working capital can't be recovered at the end of
the project)
• Project period is five years and the scrap value of the investment at the end of the project
period is Rs 600000

Cash flow estimation of the project for five years are given below.(Rs 000)
year 1 2 3 4 5
Reduction in electricity expense 2000 2200 2300 1800 1200
Operational expense except depreciation 150 250 300 200 400

Discounting factors at 10% interest rate are given below.

year 1 2 3 4 5
10% discounting factor 0.91 0.83 0.75 0.68 0.62

Required:
1. A statement to show the cash inflow and outflows of the project (including initial cash flows)
2. Calculate Pay-back period of the investment
3. Calculate Net present value of the investment
4. Decision with reason whether to make this investment based on net present value. (10 marks)

(B). “Eksath suhada sangamaya”is a welfare society formed for the wellbeing of the society .There
are 80 members in the society and annual subscription per member is Rs 3000.Following
balances (except cash) were appeared in the books of the society as at 01/04/2021.
Equipment Rs 150000
Subscription receivables Rs 20000
Accrued expense Rs 40000
Accumulated fund ?

Cash account prepared for the year ended 31/03/2022 is given below.

Rs Rs
B/B/F 20000 Expense 140000
Subscription for 2020/2021 15000
Subscription for 2021/2022 225000
Subscription for 2022/2023 10000 B/C/D 130000
270000 270000

Additional information
1. On 01/04/2021 an equipment worth Rs 300000 was received as a donation. Society decided
to recognize donation as an income over period of ten years.
2. Equipment should be depreciated 10% per annum.
3. Accrued expense as at 31/03/2022 was Rs 25000.
Required to:
1. Prepare Subscription account for the year ended 31/03/2022.
2. Calculate surplus or deficit for the year ended 31/03/2022.
3. Accumulated fund as at 31/03/2022. (10 marks).

C. Rasika plc produces LED bulbs. Estimated details regarding the special LED bulb to be produced
are given below.
Total fixed cost Rs 3000000
Selling price of a bulb Rs 500
Contribution to sales ratio 40%
Expected sales capacity 25000 bulbs.

Required:
1. Unit Variable cost and unit contribution
2. Break-even point in units
3. Margin of safety in units
4. Profit at the expected capacity
5. Sales income to be generated a profit of Rs 2500000
5. If Company expects reduce the selling price by 40% from next year due to high competition
Sales capacity is expected to increase up to 45000 units due the reduction in selling price.
I.Contribution to sales ratio
II.Sales value at the Breakeven point
III.Increase or decrease in expected profit ( 20 Marks)