|Total No. of Questions — 6]||[Total No. of Printed Pages — 4|
|Time Allowed : 3 Hours||Maximum Marks : 100|
|Answer all Questions|
|Working notes should form part of the answer.|
|Wherever necessary, suitable assumption(s) may be made and disclosed by the candidates.|
|1.||Answer the following questions:||10x2=20|
|(i)||Goods worth Rs. 5,00,000 were destroyed due to flood in September, 2006. A claim was lodged with insurance company. But no entry was passed in the books for insurance claim in the financial year 2006–07. |
In March, 2008, the claim was passed and the company received a payment of Rs.3,50,000 against the claim. Explain the treatment of such receipt in final accounts for the year ended 31st March, 2008.
|(ii)||Briefly indicate the items which are included in the expressions "Borrowing Cost" as per AS 16.||(0)|
|(iii)||Sterling Ltd. purchased a plant for US $ 20,000 on 31st December, 07 payable after 4 months. The company entered into a forward contract for 4 months @ Rs. 48.85 per dollar. On 31st December, 07, the exchange rate was Rs. 47.50 per dollar. |
How will you recognize the profit or loss on forward contract in the books of Sterling Limited for the year ended 31st March, 2008.
|(iv)||A company created a provision of Rs. 75,000 for staff welfare while preparing the financial statements for the year 2007–08. On 31st March, in a meeting with staff welfare association, it was decided to increase the amount of provision for staff welfare to Rs. 1,00,000. The accounts were approved by Board of Directors on 15th April, 2008. |
Explain the treatment of such revision in financial statements for the year ended 31st March, 2008.
|(v)||Explain "Employee’s stock option plan".||(0)|
|(vi)||A company entered into an agreement to sell its immovable property to another company for 35 lakhs. The property was shown in the Balance Sheet at Rs.7 lakhs. The agreement to sell was concluded on 15th February, 2008 and sale deed was registered on 30th April, 2008. The financial statements for the year 2007–08 were approved by the board on 12th May,2008. |
You are required to state, how this transaction would be dealt with in the financial statements for the year ended 31st March, 2008.
|(vii)||A Ltd. entered into a binding contract with C Ltd. to buy a machine for Rs. 1,00,000. The machine is to be delivered on 15th February, 2009. On 1st January, 2009, A Ltd. changed its process of production. The new process will not require the machine ordered and it shall have to be scrapped after delivery. The expected scrap value of the machine is nil. |
Explain how A Ltd. should recognise the entire transaction in the books of account for the year ended 31st March, 2009.
|(viii)||Goods are transferred from Department P to Department Q at a price 50% above cost. |
If closing stock of Department Q is Rs. 27,000, compute the amount of stock reserve.
|(ix)||X Ltd. received a revenue grant of Rs.10 crores during 2006–07 from Government for welfare activities to be carried on by the company for its employees. The grant prescribed the conditions for utilization. |
However during the year 2008–09, it was found that the prescribed conditions were not fulfilled and the grant should be refunded to the Government.
State how this matter will have to be dealt with in the financial statements of X Ltd. for the year ended 2008–09.
|(x)||"Conversion of debt into equity is a non–cash transaction." Comment.||(0)|
|2.|| Sun Ltd. and Moon Ltd. were amalgamated on and from 1st April, 2009. A new company Star Ltd. was formed to take over the business of the existing companies. The Balance Sheets of Sun Ltd. and Moon Ltd. as at 31st March, 2009 are given below: |
|3.|| The Balance Sheet of Dee Limited on 31st March, 2009 was as follows: |
At the General Meeting it was resolved to:
Holders of 3,000 debentures opted to get their debentures redeemed in cash only while the rest opted for getting the same converted into equity shares as per the terms of issue. Debenture redemption fund investment realized Rs. 1,80,000 on sales.
You are required to redraft the Balance Sheet after giving effects to the right issue and redemption of debentures. Also show the calculations in respect of number of equity shares issued and cash payment.
|4.|| DM Ltd., Delhi has a branch in London. London branch is an integral foreign operation of DM Ltd. At the end of the year 31st March, 2009, the branch furnishes the following trial balance in U.K. Pound: |
In head office books, the branch account stood as shown below:
The following further information are given:
You are required to prepare:
|5.||(a)|| From the following information, you are required to prepare Profit and Loss Account of Zee Bank Ltd., for the year ending 31st March, 2009: |
|(b)|| Dee Limited furnishes the following Balance Sheet as at 31st March, 2008: |
The company passed a resolution to buy back 20% of its equity capital @ Rs.50 per share. For this purpose, it sold all of its investment for Rs.22,00,000.
You are required to pass necessary journal entries and prepare the Balance Sheet.
|6.||(a)|| P, Q and R are partners sharing profits and losses in the ratio of 2 : 2 : 1. Their Balance Sheet as on 31st March, 2009 is as follows: |
They decided to dissolve the firm. The following are the amounts realized from the assets:
Creditors allowed a discount of 5% and realization expenses amounted to Rs.1,500. A bill for Rs.4,200 due for sales tax was received during the course of realization and this was also paid.
You are required to prepare:
|(b)||Answer the following:|
|(i)|| Axe Limited began construction of a new plant on 1st April, 2008 and obtained a special loan of Rs.4,00,000 to finance the construction of the plant. The rate of interest on loan was 10%. |
The expenditure that were made on the project of plant were as follows:
The company’s other outstanding non–specific loan was Rs.23,00,000 at an interest rate of 12%.
The construction of the plant completed on 31st March, 2009. You are required to:
|(ii)|| Compute Basic Earnings per share from the following information: |
Net profit for the year ended 31st March, 2009 was Rs.2,75,000.