Roll No………………… | |
Total No. of Questions— 6] | [Total No. of Printed Pages—6 |
Time Allowed : 3 Hours | Maximum Marks : 100 |
JPR | |
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. |
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Marks |
1. | On 30th September, 1999 Beta Enterprises Ltd. was incorporated with an Authorised Capital of Rs. 50 lakhs. Its first accounts were closed on 31st March, 2000 by which time it had become a listed company with an issued subscribed and paid up Capital of Rs. 40 lakhs in 4,00,000 Equity shares of Rs. 10 each.
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Trial Balance as on 31st March, 2002 | ||||||||||||
(Rupees in 000's) | ||||||||||||
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( 2 )
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Additional Information: | |||
(a) | Administration costs should be split between the Divisions in the ratio of 5 : 3 : 2. | ||
(b) | Distribution costs shouldbe spread over the Divisions in the ratio of 3 : 1 : 1 | ||
(c) | Directors have proposed a Final Dividend of Rs. 8 lakhs. | ||
(d) | Some of the users of Ceramics Division are unhappy with the product and have lodged claims against the company for damages of Rs. 7.5 lakhs. The claim is hotly contested by the company on legal advice. | ||
(e) | Fixed Assets worth Rs. 30 lakhs were added in the Cermics Divsion on 1.4.2001. | ||
(f) | Fixed Assets are written off over a period of 10 years on straight line basis in the books. However for Income tax purposes depreciation at 20% on written down value of the assets is allowed by Tax Authorities. | ||
(g) | Income tax rate may be assumed at 35% | ||
(h) | During the year Engineering Division has sold to Alpha Ltd. goods having a sales value of Rs. 25 lakhs. Mr. Gamma, the Managing Director of Beta Enterprises Ltd. owns 100% of the issued Equity Shares of Alpha Ltd. the sales made to Alpha Ltd. were at normal selling price of Beta Enterprises Ltd. | ||
You are required to prepare Profit and Loss account for the year ended 31st March, 2002 and the Balance Sheet as at that date. Your answer should include nodtes and disclosures as per Accounting Standards. | |||
2. | (a) | Explain the concept of `Economic value added' (EVA for short) and its uses. | 6 |
(b) | A company obtained term loan during the year ended 31st March, 2002 in an extent of Rs. 650 lakhs for modernisation and development of its factory. Buildings worth Rs. 120 lakhs were completed and Plant and Machinery worth Rs. 350 lakhs were installed by 31st March, 2002. A sum of Rs. 70 lakhs has been advanced for Assets the installation of which is expected in the following year. Rs. 110 lakhs has been utilised for Working Capital requirements. Interest paid on the loan of Rs. 650 lakhs during the year 2001-2002 amounted to Rs. 58.50 lakhs. How should the interest amount be treated in the Accounts of the Company? | 6 | |
(c) | For what purposes inspection of records and documents of Merchant Banker is ordered by SEBI? | 4 |
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3. | The following are the Balance Sheet of A Ltd. and B Ltd. as on 31st December, 2001. | 16 | |||||||||||||||||||
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Fixed Assets of both the companies are to be revalued at 15% above book value. Stock in Trade and Debtors are taken over at 5% lesser than their book value. BOth the companies are to pay 10% Equity Dividend, Preference dividend having been already paid. | |||||||||||||||||||||
After the above transactions are given effect to, A Ltd., will absorb B Ltd. on the following terms: | |||||||||||||||||||||
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Prepare: | |||||||||||||||||||||
(a) Absorption entries in the books of A Ltd. | |||||||||||||||||||||
(b) Statement of consideration payable by A Ltd. |
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4. | (a) | Following are the information of two companies for the year ended 31st March, 2002: | |||||||||||||
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Assume the Market expectation is 18% and 80% of the Profits are distributed. | |||||||||||||||
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(b) | Write a note on recommendations given in the Guidance note on Accounting in respect of Minimum alternate Tax (MAT) issued by INstitute of Chartered Accountants of India. | 4 | |||||||||||||
5. | On 31st March, 2002 the Balance Sheets of H Ltd. and S Ltd. stood as follows: | 16 | |||||||||||||
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( 5 )
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Following Additional Information is available: | ||||
(a) | H Ltd. purchased 90 thousand Equity Shares in S Ltd. on 1st April, 2001 at which date the following balances stood in the books of S Ltd. |
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(b) | On 14th July, 2001 S Ltd. declared a dividend of 20% out of pre-acquisition profits and paid corporate dividend tac (including surcharge) at 11%. H Ltd. credited the dividend received to its profit and Loss Account. |
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(c) | On 1st November, 2001 S Ltd. issued 3 fully paid Equity shares of Rs.10 each, for every 5 shares held as bonus shares out of pre-acquisiton General Reserve. |
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(d) | On 31st March,2002,the stock of S Ltd. included goods purchased for Rs.50 thousand from H Ltd., which had made a profit of 25% on cost |
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Prepare a consolidated Balance Sheet as on 31st March, 2002. In the context of relevant Accounting Standards, give your comments on any four of the following matters for the financial year ending on 31.3.2002 | 4x4=16 | |||
(a) | Assets and liabilities and income and expenditure items in respect of foreign branches are translated into Indian rupees at the prevailing rate of exchange at the end of the year. The resultant exchange differences in the case of profit, is carried to other Liabilities Account and the Loss, if any, is charged to revenue. |
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(b) | Leave encashment benefit is accounted for as per "Pay-as-you-go" method. | |||
(c) | Increase in pension liability on account of wage revision in 1999-2000 is being provided for in 5 instalments commencing from that year.The remaining liability of Rs. 300 lakhs as re-determined in acturial valuation will be provided for in the next 2 years. |
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(d) | A Pharma Company spent Rs. 33 lakhs during the accounting year ended 31st March, 2002 on a research project to develop a drug to treat "AIDS". Experts are of the view that it may take four years to establish whether the drug will be effective or not and even if found effective it may take two to three more years to produce the medicine, which can be marketed. The company wants to treat the expenditure as deferred revenue expenditure. |
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(e) | While preparing its final accounts for the year ended 31st March, 2002 Rainbow Limited created a provision for Bad and Doubtful debts at 2% on trade debtors. A few weeks later the company found that payments from some of the major debtors were not forthcoming. Consequently the company decided to increase the provision by 10% on the debtors as on 31st March, 2002 as the accounts were stil open awaiting approval of the Board of Directors. Is this to be considered as an extra-ordinary item or prior period item? |
NSW |