CA Inter Advanced Accounting Test: AS 2, AS 10 and AS 13 Answers

The first answer works through abnormal loss on 16,000 MT of raw material with 5% normal wastage, showing how normal loss is included in inventory cost while abnormal loss goes to the Profit and Loss statement. The PPE answer explains why land with an unlimited useful life is not depreciated and must not be debited to the building account. The investments answer shows how current shares are carried at the lower of cost and market value, while long-term holdings of gold and silver stay at cost unless the decline is other than temporary.

Attempt the questions first within the stated time, then compare your workings with the model answers step by step. Pay attention to the calculation of the abnormal loss per unit and to the classification reasons given for each investment. Note the standard references beside each answer so you can go back to the relevant chapter of AS 2, AS 10 and AS 13 when a similar question appears in your exam.

• Normal and abnormal loss in production
• Valuation of inventories under AS 2
• Depreciation of land and buildings under AS 10
• Separate depreciation of significant parts
• Current and long-term investments under AS 13
• Lower of cost and market value for shares
• Reclassification of investments