1 of 1 Automatic Zoom Section 7 Following information pertains to non-current assets of Bunny Ear Limited (BEL): Land: In January 2019, the government allotted a piece of land to BEL subject to the condition that BEL will establish a factory building on it. The land was recorded at its fair value of Rs. 100 million. Factory building: On 1 March 2019, BEL started construction of the factory building. The construction work was completed on 30 June 2020. Payments related to the construction of the factory were as follows: Description 11 bill of contractor 2nd bill of contractor 3rd bill of contractor Last bill of contractor Date of payment 1-Mar-2019 1-Aug-2019 1-Jan-2020 1-Jul-2020 Rs. in million 130 190 180 100 The project was financed through: government grant of Rs. 200 million received on 1 February 2019. Unused funds from government grant were invested in a saving account @ 8% per annum. withdrawals from the following running finance facilities obtained from Bank A and Bank B. The relevant details are: -B Obtained icap.proctorexam.com is sharing your screen Stop sharing 2020 Markuori D.I.A 1 of 1 + Automatic Zoom Description 1st bill of contractor 20 bill of contractor 3rd bill of contractor Last bill of contractor Date of payment 1-Mar-2019 1-Aug-2019 1-Jan-2020 1-Jul-2020 Rs. in million 130 190 180 100 The project was financed through: (1) government grant of Rs. 200 million received on 1 February 2019. Unused funds from government grant were invested in a saving account @ 8% per annum. (ii) withdrawals from the following running finance facilities obtained from Bank A and Bank B. The relevant details are: Bank A Baak B Obtained on 1 January 2019 1 January 2020 Markup rate 12% 14% - Rs. in million Balance on 31 December 2019 250 Markup for 2010 22 Balance on 31 December 2020 350 200 Average balance during 2020 300 150 Markup for 2020 36 21 Manufacturing plant The manufacturing plant was purchased on 1 August 2020 at cost of Rs. 420 million Rs. 240 million was financed through an interest free loan from government. The loan will be forgiven if the pl reasonable assura icap proctorexam.com is sharing your screen Step sharing ere is a 25C Heavy ch o i and 8/9 > :: Overview Markup rate Balance on 31 December 2019 Markup for 2019 Balance on 31 December 2020 Average balance during 2020 Markup for 2020 12% 14% Rs. in million 250 22 350 200 300 150 36 21 Manufacturing plant: The manufacturing plant was purchased on 1 August 2020 at cost of Rs. 420 million. Rs. 240 million was financed through an interest free loan from government. The loan will be forgiven if the plant is operated for atleast 4 years by BEL. Upon acquisition, there is a reasonable assurance that BEL will comply with this condition. Other information: BEL uses cost model for subsequent measurement of property, plant and equipment. All government grants are recorded as deferred income and a part of it is transferred to income each year. Useful life of the factory building and manufacturing plant has been estimated at 25 years and 10 years respectively. Required: Prepare relevant extracts (including comparative figures) from BEL's statement of profit or loss for the year ended 31 December 2020 and statement of financial position as on that date. (Notes to the financial statements are not required. Borrowing costs are to be calculated on the basis of number of months) (16) 1 of 1 Automatic Zoom Section 7 Following information pertains to non-current assets of Bunny Ear Limited (BEL): Land: In January 2019, the government allotted a piece of land to BEL subject to the condition that BEL will establish a factory building on it. The land was recorded at its fair value of Rs. 100 million. Factory building: On 1 March 2019, BEL started construction of the factory building. The construction work was completed on 30 June 2020. Payments related to the construction of the factory were as follows: Description 11 bill of contractor 2nd bill of contractor 3rd bill of contractor Last bill of contractor Date of payment 1-Mar-2019 1-Aug-2019 1-Jan-2020 1-Jul-2020 Rs. in million 130 190 180 100 The project was financed through: government grant of Rs. 200 million received on 1 February 2019. Unused funds from government grant were invested in a saving account @ 8% per annum. withdrawals from the following running finance facilities obtained from Bank A and Bank B. The relevant details are: -B Obtained icap.proctorexam.com is sharing your screen Stop sharing 2020 Markuori D.I.A 1 of 1 + Automatic Zoom Description 1st bill of contractor 20 bill of contractor 3rd bill of contractor Last bill of contractor Date of payment 1-Mar-2019 1-Aug-2019 1-Jan-2020 1-Jul-2020 Rs. in million 130 190 180 100 The project was financed through: (1) government grant of Rs. 200 million received on 1 February 2019. Unused funds from government grant were invested in a saving account @ 8% per annum. (ii) withdrawals from the following running finance facilities obtained from Bank A and Bank B. The relevant details are: Bank A Baak B Obtained on 1 January 2019 1 January 2020 Markup rate 12% 14% - Rs. in million Balance on 31 December 2019 250 Markup for 2010 22 Balance on 31 December 2020 350 200 Average balance during 2020 300 150 Markup for 2020 36 21 Manufacturing plant The manufacturing plant was purchased on 1 August 2020 at cost of Rs. 420 million Rs. 240 million was financed through an interest free loan from government. The loan will be forgiven if the pl reasonable assura icap proctorexam.com is sharing your screen Step sharing ere is a 25C Heavy ch o i and 8/9 > :: Overview Markup rate Balance on 31 December 2019 Markup for 2019 Balance on 31 December 2020 Average balance during 2020 Markup for 2020 12% 14% Rs. in million 250 22 350 200 300 150 36 21 Manufacturing plant: The manufacturing plant was purchased on 1 August 2020 at cost of Rs. 420 million. Rs. 240 million was financed through an interest free loan from government. The loan will be forgiven if the plant is operated for atleast 4 years by BEL. Upon acquisition, there is a reasonable assurance that BEL will comply with this condition. Other information: BEL uses cost model for subsequent measurement of property, plant and equipment. All government grants are recorded as deferred income and a part of it is transferred to income each year. Useful life of the factory building and manufacturing plant has been estimated at 25 years and 10 years respectively. Required: Prepare relevant extracts (including comparative figures) from BEL's statement of profit or loss for the year ended 31 December 2020 and statement of financial position as on that date. (Notes to the financial statements are not required. Borrowing costs are to be calculated on the basis of number of months) (16)