|Time Allowed : 3 Hours||Full Marks : 100|
|The figures in the margin on the right side indicate full marks.|
|PART A questions are compulsory. Attempt all of them.|
|PART B has seven questions. Attempt any five of them|
|PART A (25 Marks)|
|1.||(a)||In each of the cases given below, one out of four alternatives is correct. Indicate the correct answer ( = 1 mark) and give your workings/reasons briefly (= 1 mark):||2x6=12|
|(i)|| GANGOTRI LTD. has provided depreciation as per Accounting records Rs.4 lakhs and as per Tax records Rs.7 lakh. Unamortised preliminary expenses, as per tax record is Rs.5600. There is adequate evidence of future profit efficiency. If the tax rate applicable to the company is 40%, what would be deferred Tax liability as per AS–22. |
|(ii)|| ANURAG LTD. purchased a Plant on 1.4.2008 for Rs.10,00,000. It provides depreciation @ 20% on W.D.V. during the year ended on 31.3.2010. What would be the carrying amount of Plant on 31.3.2010, if the company provided impairment loss on Plant for Rs.1,00,000? |
|(iii)|| VARTUAL LTD. acquired 1000 shares in ANKIT LTD. at a Cum–right price of Rs.250 per share. Ankit Ltd. offered right shares of one for every two held at Rs.125 per share. After the right issue the share price fell from Rs.250 to Rs.200 per share. If the rights were sold by vartual Ltd. at Rs.70 per share, what would be the carrying cost of investment in Ankit Ltd. after the sale of rights? |
|(iv)|| The fair market values of Pension Plan assets of ASILEENA LTD. at the begining of year 2009–10 was Rs.7,00,000. The employer contribution to the plan and Benefit payments made to retirer during the year were Rs.1,00,000 and Rs.40,000 respectively. If the actual return on pension Plan assets is Rs.50,000, what would be the Fair market value of pension plan at end of year 2009–10 (As per–AS–15)? |
|(v)|| On July 01,2009 GRENISON LTD. acquired 7000 Equity shares of NARMADA LTD. for consideration of Rs.8,00,000. The Share Capital of NARMADA LTD. consists of 10,000 Equity shares of Rs.100 each. |
The balances of General Reserve and Profit and Loss Account of NARMADA LTD. are as under:
What will be the amount of Minority Interest to be shown in Consolidated Balance Sheet as on March 31,2010:
|(vi)|| The following data is extracted from the books of HYDER LTD. as on March 31,2010. |
If the normal rate of return is 9%, what would be value of an Equity Share of HYDER LTD.
|(b)||Choose the most appropriate one from the stated options and write it down (only indicate A, B, C, D as you think correct):||1x5=5|
|(i)|| According to AS–29, Restructuring Cost does not include: |
|(ii)|| As per AS–26 when an intangible asset is required by issue of shares and other securities, the cost of intangible asset should be recorded at: |
|(iii)|| ARKUTI LTD. has different distinguishable segments–One of them is engaged in providing an individual product and it is subject to risk and returns. Such segment is known as: |
|(iv)|| Under the purchase method of accounting the transferee company incorporates into its books (As per AS–14): |
|(v)|| The chairman of the Public accounts Committee is appointed from amongst the members of Lok Sabha elected to the Committee by– |
|(c)||(i)||Define ‘Firm Commitment’ relating to Hedge Accounting.||2x4=8||(0)|
|(ii)||Explain the meaning and significance of going concern concept of accounting.||(0)|
|(iii)||Securitisation is different from factoring. Comment.||(0)|
|(iv)||State briefly the disclosure requirements in Balance Sheet in respect of State level Value Added Tax (VAT).||(0)|
|PART B (75 Marks)|
|2.||(a)||Mr. RAJA enters into certain equity derivative instruments contracts on March 27, 2010. The initial margin on these contracts, calculated as per span, is Rs. 35,000. The margin for the subsequent days, calculated as per span is a follows: |
On 29th March, 2010 Rs.40,000
On 30th March, 2010 Rs.30,000
On 31st March, 2010 Rs.32,000
Show the journal entries for the Payment/Receipt of the initial margin and disclosure requirement in the Balance Sheet.
|(b)||X Ltd. had issued debentures which had been guaranteed by the Government of India both as to the repayment of the principal and interest. The company disclosed the same as ‘secured loans’ in their balance sheet, Comment.||3||(0)|
|(c)|| The following are the Balance Sheets of Bat Ltd. and Ball Ltd. as on 31st March, 2010. |
On that day Bat Ltd. absorbed Ball Ltd. The members of Ball Ltd. are to get one equity share of Bat Ltd. issued at a premium of Rs. 2 per share for every five equity share held by them in Ball Ltd. The necessary approvals are obtained.
You are asked to pass journal entries in the book of Bat Ltd. to give effect to the above.
|3.||(a)||A company purchased a plant for Rs.25 lakhs during the financial year 2009–10 and installed it immediately. The price charged by the vendor included excise duty (cenvat credit available) of Rs.2.50 lakhs. During this year, the company also produced excisable goods on which excise duty chargeable is Rs.2.25 lakhs. Show the journal entries describing cenvat credit treatment and at what amount should the plant be capitalised?||6||(0)|
|(b)||An enterprise, which has neither more than one business segment nor more than one geographical segment, is required to disclose segment information as per AS 17. Comment.||3||(0)|
|(c)|| Following details are given for PHIMPEX LTD’s for the year ended March 31, 2010. |
Prepare a statement showing financial information about PHIMPEX LTD's operations in different industry segment-keeping in view AS–17.
|4.||(a)|| SONEX LTD was incorporated on 1st April, 2010 to take over the running business of Mr. Daga. |
The purchase consideration was satisfied by allotment of:
The company issued a prospectus for issuing 50000 equity shares of Rs.10 each at a premium of Rs.2 per share and 20000 10% redeemable preference shares of Rs.10 each at par. The entire amount in respect of the issue was received by 30th June, 2010 except final call of Rs.3 per share on 2500 shares issued to Mr. P, a Director. Underwriting commission @ 2.5% on nominal value of equity shares and @ 3% on preference shares were paid to a Merchant Banker.
The preliminary expenses were estimated at Rs.75,000 in the prospectus but the actual expenses incurred was as under:
The company purchased a plot of land for Rs.1,20,000. Further, it advanced Rs.2,30,000 for construction of office building and Rs.3,50,000 to a supplier, being 35% of contract price for supply of machinery. A part of the investments taken over from Mr. Daga was sold for Rs.80,000 (Rs.5,000 in excess of their book value).
Prepare a receipts and payments account and other relevant financial information to be included in the statutory report pursuant to sec. 165 of the Companies Act, 1956 in respect of SONEX LTD. made upto 30th June, 2010.
|(b)|| The following is the Balance Sheet of DELTA LTD as on 31–03–2010 |
The company bought back 20,000 shares at Rs.30 each. The transaction in respect of buy back was financed by sale of 4/5th of non trade investments for Rs.6.20 lakhs.
Show important accounting entries in the books of the company to record buy back and also show the balance sheet after buy back.
|(c)||How should deferred tax assets and deferred tax liabilities be disclosed in the balance sheet of a company?||2||(0)|
|5.||(a)|| The following information has been extracted from the Annual Report 2009–10 of SITERAZE LTD. |
Other Information is available from the Annual Report for 2009–10.
Calculate the Economic Value Added of SITERAZE LTD for the year 2009–10.
|(b)||On 1st October, 2009, GREEN GARDEN LTD (Construction Company) undertook a contract to construct a building for Rs.170 lakh: On 31st March, 2010 the company found that it had already spent Rs.129.98 lakh on the construction. Prudent estimate of additional cost for completion was Rs.64.02 lakh. |
What is the additional Provisions for foreseeable loss, which must be made in the final accounts for the year ended 31st March, 2010 as per provisions of AS–7?
|(c)||Discuss the provision of the constitution of India to safeguard the Independence of the comptroller and Auditor General of India.||4||(0)|
|6.||(a)|| AIR LTD, SEA LTD and RAIL LTD are members of a group. AIR LTD bought 70% of the shares of SEA LTD on October, 1,2008 and 30% of the shares of RAIL LTD on 1st January, 2010. SEA LTD bought 60% of the shares of RAIL LTD on October 1, 2009. |
State how the Profit/(loss) will be reflected in the consolidated Balance Sheet.
|(b)||State briefly the reporting requirements as to environmental statement in the Directors’ Report of companies.||4||(0)|
|(c)||The surplus arising from sale of investments was set off against a non-recurring loss and was not disclosed separately. Comment.||3||(0)|
|7.||Answer the following questions:||5x3=15|
|(a)||XY Ltd. was making provisions for non-moving stocks based on issues for the last 12 months upto 31.3.2009. Based on technical evaluation, the company wants to make provisions during the year 2009–10. |
Total value of stock–Rs. 150 lakhs.
Provisions required based on 12 months issue Rs.4.0 lakhs
Provisions required based on technical evaluation Rs.3.20 lakhs.
Does this amount to change in accounting Policy? Can the company change the method of provision?
|(b)||PQ Ltd. has been including interests in the valuation of closing stock. In the accounting year 2009–10 the management of the company decided to follow AS–2 and accordingly interests have been excluded from the valuation of closing stock. This has resulted in decrease in profits by Rs.250,000. |
Is a disclosure necessary? If so, draft the same.
|(c)|| AB Ltd. has set up its business in a designated backward area which entitles the company to receive from the Govt. of India a subsidy of 25% of the cost of investment. Having fulfilled all the conditions under the scheme, the company in its investment of Rs.80 crores in capital assets, received Rs.20 crores from the Govt. in February, 2010 in the accounting period 2009–10. The company wants to treat this receipt as an item of revenue and thereby reduce the losses in P. & L. A/c for the year ended 31.3.2010. |
Do you think the treatment is justified? Answer with reference to relevant A.S.
|8.||(a)||Discuss some key differences between IFRS, US GAAP and IGAAP related to |
|(b)|| The following is an extract from the cash flow statement of VENTEX LTD prepared for the year ended March 31, 2010. |
Redraft and reconstruct the cash flow statement of VENTEX LTD in proper order for the year ended March 31, 2010 in accordance with AS-3 (Revised) using indirect method.
|(c)|| MS KRITIKA furnishes the following information about all option at the Balance Sheet date (31.3.2010): |
Determine the amount of provision to be made in the books of Account of Ms Kritika.