Zest Ltd.is engaged in the manufacturing of Automobiles with its registered office in Pune and is listed on BSE Limited. It also owns a chain of…

Zest Ltd.is engaged in the manufacturing of Automobiles with its registered office in Pune and is listed on BSE Limited. It also owns a chain of retail stores across 20 different locations in the cities of Pune and Kolhapur. Following are the brief facts about the transactions entered into by Zest Ltd. for which accounting advice is sought by the CFO from you: Zest Ltd. has recently made various acquisitions and details of each of them are as follows: (1) Zest Ltd. acquired 45% stake in Sun Ltd. on 1 st April, 2025 for 50,00,000. This leads to Zest Ltd. having significant influence on Sun Ltd. Since the date of acquisition till 31 st March, 2026, Sun Ltd. has earned a profit of 16,00,000. Also, on 31 st March, 2025, Sun Ltd. had revalued one of its property resulting in increase in the value of property by - 8,00,000 and accounted for it in the revaluation reserve in the same financial year. Zest Ltd. has a policy to value its investment in joint ventures and associates based on equity method. (2) Zest Ltd. acquired 40% shares in Large Ltd. on 1 st April, 2025 for a consideration of 65,50,000 and balance of retained earnings on the same date was - 52,40,000. It is the group's policy to re-measure its non-controlling interests at fair value and provide for impairment loss, if any, in the value of investment every year end. The retained earnings and issued share capital of Large Ltd. on 31 st March, 2026 are - 76,00,000 and - 40,00,000 respectively. Large Ltd. have not issued any share capital since the acquisition of shareholding by Zest Ltd. The fair value of the net assets of Large Ltd. was the same as their carrying amounts at the date of acquisition. The recoverable amount of net assets of Large Ltd. has been deemed to be - 1,15,00,000 as on 31 st March, 2026. On 1 st January, 2026, Zest Ltd. sold inventory costing - 5,00,000 to Large Ltd. for 15,00,000. The inventory was still unsold by Large Ltd. at 31 st March, 2026. This inventory was sold by Large Ltd. to third party on 8 th April, 2026. (3) On 1 st April 2025, Zest Ltd. agreed with shareholder of Sour Ltd. to acquire 100% stake in Sour Ltd. for total consideration of 200 lakhs which includes the following: (i) Zest Ltd. will reimburse shareholders of Sour Ltd. for the transaction cost of 4 lakhs. (ii) Two of the shareholders of Sour Ltd. will work as the general managers, even after Sour Ltd. is acquired by Zest Ltd. This arrangement will work for a period of 2 years and for which quarterly salary of 40,000 is provided to each of these individuals. (iii) Further Sour Ltd. had filed a legal case against Zest Ltd. in the past, which was not settled till the date of acquisition. Zest Ltd. agreed to settle the same for 2,00,000. On the basis of information provided in the above case scenario, you are required to choose most appropriate answer to the below mentioned questions from 6 to 8.