|Time Allowed : 3 Hours||Full Marks : 100|
|The figures in the margin on the right side indicate full marks.|
|Attempt Question No. 1 which is compulsory and any five from the rest.|
|1.||(a)||What is the primary reason for non–acceptability of International Accounting Standards (IAS) throughout the world?||2x10||(0)|
|(b)||What are the two alternative approaches for business valuation?||(0)|
|(c)||State how 'fixed assets' when discarded and sold are recognised in the Accounts of Electricity Companies.||(0)|
|(d)||Certain risks are not covered in loss of profit policy. — Mention any two of them.||(0)|
|(e)||How are 'donations' treated in Income and Expenditure Account and Balance Sheet?||(0)|
|(f)||What is the legal status of accounting standards issued by the Institute of Chartered Accountants of India?||(0)|
|(g)||What is meant of "non–banking assets"?||(0)|
|(h)||What do you mean by "fundamental accounting assumptions"?||(0)|
|(i)||Can share premium be distributed as dividends?||(0)|
|(j)||How the term "Treasury" defined in the context of Government accounting?||(0)|
|2.|| Wind Mill Ltd. supplying electricity maintains its accounts on double account basis. It incurred an expenditure of Rs. 25,00,000 to renovate its works. The relevant part of old works had costed Rs. 10,00,000. This capacity of new works will be double the capacity of old works. A sum of Rs. 5,00,000 is realised by the sale of old materials. Old materials of the value of Rs. 2,00,000 are used in the new works. Cost escalation (since old works were built) is as follows: |
(a) The amount of improvement to be capitalised.
(b) The amount to be written off to revenue.
(c) Journal Entries to record the transactions.
|3.|| On the eve of proposed absorption of A Ltd. by B Ltd., following summarised details are given: |
Terms of absorption are proposed as follows:
(a) Compute the purchase consideration, and
(b) Present the projected balance sheet of B Ltd. as if the proposed absorption is put through.
|4.||(a)||Distinguish between purchased goodwill and self–generated goodwill. How is each type of goodwill treated in company accounts?||6+10||(0)|
|(b)|| The balance sheet (summarised) of Tinker Ltd. as on 31 March 2005 was as follows: |
The company's profit and loss account for the year ended 31 March 2005 showed a net profit (before tax) of Rs. 25,00,000. The profit includes interest on investment of Rs. 50,000. Goodwill is being written off Rs. 50,000 per annum. The applicable income tax rate is 40 per cent. It is expected that the company will be able to maintain its present level of performance. Plant and machinery is revalued at Rs. 70,00,000. Future depreciation charge is to go up by Rs. 1,00,000. Normal return on capital employed may be taken at 10 per cent. Compute the value of goodwill of the company based on 4 years' purchase of maintainable super profit. The capital employed figure is to be calculated on the basis of the last year–end position.
|5.|| Puskar Enterprise has its head office in Ranchi and a branch in Imphal. The following trial balance has been extracted from the books of account as at 31 March 2005: |
Other relevant information:
Prepare,in columner form, the branch and head office trading and profit and loss accounts for the year ended 31 March 2005 and a combined balance sheet for Puskar Enterprise as on that date.
|6.|| The balance sheet of Bomex Ltd. as at 31 March 2005 was as follows: |
You are required to calculate the value of each equity share on assets basis.
The following further information is available:
|7.|| Nabipur Ltd. owns certain patent rights. It has granted a licence to Asoka Ltd. to use such rights on royalty basis. The royalty is payable at Rs. 50 per unit produced. Asoka Ltd. has issued a sub–license to Kaniska Ltd. on the basis of a royalty of Rs. 60 per unit sold. The minimum royalty payable by Kaniska Ltd. is fixed at Rs. 75,000 per annum. Short workings can be recouped within one year from the last date of the year in which they occur. |
The following particulars are available for the first three years of working.
You are required to
|8.||Write Short notes:-||4x4=16|
|(b)||Local Government Accounting;||(0)|
|(c)||Public Accounts Committee;||(0)|
|(d)||Structure of Government Accounts.||(0)|