|Total No. of Questions— 6]||[Total No. of Printed Pages—8|
|Time Allowed : 3 Hours||Maximum Marks : 100|
|Answers to questions are to be given only in English except in the cases of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued.|
|Answer all Questions|
|Working notes should form part of the answer.|
Wherever applicable, suitable assumptions should be made by the candidate.
|1.|| On the basis of the following information, calculate the value of goodwill of Gee Ltd. at three years purchase of super profits, if any, earned by the company in the previous four completed accounting years. |
The profits before tax of the four years have been as follows :
The rate of income tax for the accounting year 1999–2000 was 40%. Thereafter it has been 38% for all the years so far. But for the accounting year 2003–2004 it will be 35%.
In the accounting year 1999–2000, the company earned an extraordinary income of Rs. 1 crore due to a special foreign contract. In August, 2000 there was an earthquake due to which the company lost property worth Rs.50 lakhs and the insurance policy did not cover the loss due to earthquake or riots.
9% Non–trading investments appearing in the above mentioned Balance Sheet were purchased at par by the company on 1st April, 2001.
The normal rate of return for the industry in which the company is engaged is 20%. Also note that the companys shareholders, in their general meeting have passed a resolution sanctioning the directors an additional remuneration of Rs. 50 lakh every year beginning from the accounting year 2003–2004.
|2.|| On 31st March, 2004 the Balance Sheets of H Ltd. and its subsidiary S Ltd. stood as follows : |
The following information is also provided to you :
Prepare a Consolidated Balance Sheet of H Ltd. and its subsidiary S Ltd. as at 31st March, 2004 bearing in mind the requirements of AS21.
|3.|| The Balance Sheet of Z Ltd. as at 31st March, 2003 is given below. In it, the respective shares of the company’s two divisions namely S Division and W Division in the various assets and liabilities have also been shown. |
Loan funds included, inter alia, Bank Loans of Rs. 15 crore specifically taken for W Division and Debentures of the paid up value of Rs. 125 crore redeemable at any time between 1st October, 2002 and 30th September, 2003.
On 1st April, 2003 the company sold all of its investments for Rs. 102 crore and redeemed all the debentures at par, the cash transactions being recorded in the Bank Account pertaining to S Division.
Then a new company named Y Ltd. was incorporated with an authorised capital of Rs. 900 crore divided into shares of Rs. 10 each. All the assets and liabilities pertaining to W Division were transferred to the newly formed company; Y Ltd. allotting to Z Ltd.’s shareholders its two fully paid equity shares of Rs. 10 each at par for every fully paid equity share of Rs. 10 each held in Z Ltd. as discharge of consideration for the division taken over.
Y Ltd. recorded in its books the fixed assets at Rs. 218 crore and all other assets and liabilities at the same value at which they appeared in the books of Z Ltd.
You are required to :
|4.||(a)|| ABC Ltd. was incorporated on 1/5/2003 to take over the business of DEF and Co. from 1/1/2003. The Profit and Loss Account as given by ABC Ltd. for the year ending 31/12/2003 is as under : |
Prepare a Statement showing allocation of pre–incorporation and post incorporation profits after considering the following informations:
|(b)||A company gas given counter guarantees of Rs. 2.25 crores to various banks in respect of the guarantees given by the said banks in favour of Government authorities. Outstanding counter guarantees as at the end of financial year 2003–2004 were Rs. 1.95 crores. How should this information be shown in the Financial Statements of the Company.||4||(0)|
|5.||(a)|| At the end of the financial year ending on 31st December, 2003, a company finds that there are twenty law suits outstanding which have not been settled till the date of approval of accounts by the Board of Directors. The possible outcome as estimated by the Board is as follows : |
Outcome of each case is to be taken as a separate entity. Ascertain the amount of contingent loss and the accounting treatment in respect thereof.
|(b)|| Z Ltd. presents the following information for the year ending 31/3/2002 and 31/3/2003 from which you are required to calculate the Deferred Tax Asset/Liability and state how the same should be dealt with as per relevant accounting standard. |
Z Ltd. had incurred a loss of Rs. 504 lakhs for the year ending 31/3/2003 before providing for Current Tax of Rs. 26,000 lakhs.
|(c)|| From the following information taken from the books of F Ltd. relating to staff and community benefits, prepare a statement classifying the various items under the appropriate heads. |
|6.||(a)||Briefly describe the progress made by India so far in the field of human resource accounting.||4x4=16||(0)|
|(b)||What do you mean by restricted funds and unrestricted funds as found in the books of account of non–for–profit organisations?||(0)|
|(c)||Distinguish between mandatory transfers and non–mandatory transfers made by a college in its books of account.||(0)|
|(d)||Explain currency options related to foreign exchange.||(0)|