| 1. | Mr.X runs a retail business. Suddenly he finds on 31.3.2006 that his Cash and Bank balances have reduced considerably. He provides you the following information: | (i) | Balances | 31.3.2005
Rs. | 31.3.2006
Rs. | | Sundry Debtors
Sundry Creditors
Cash at Bank
Cash in hand
Rent (Outstanding for one month)
Stock
Electricity and Telephone bill —outstanding | 35,400
84,400
1,08,400
10,400
2,400
11,400
— | 58,800
22,400
2,500
500
3,000
20,000
6,400 | | (ii) | Bank Pass–book reveals the following: | | Rs. | | Total Deposits
Withdrawals:
Creditors
Professional charges
Furniture & Fixtures (acquired on 1.10.05)
Proprietor's drawings | 10,34,000
8,90,000
34,000
54,000
1,61,900 | | (iii) | Rent has been increased from January, 2006. | | (iv) | Mr. X deposited all cash sales and collections from debtors after meeting wages, shop expenses, rent, electricity and telephone charges. | | (v) | Mr. X made all purchases on credit. | | (vi) | His credit sales during the year amounts to Rs. 9,00,000 | | (vii) | He incurred Rs. 6,500 per month towards wages. | | (viii) | He incurred following expenses: (a) Electricity and telephone charges Rs. 24,000 (paid) (b) Shop expenses Rs. 18,000 (paid) | | (ix) | Charge depreciation on furniture and fixtures @10% p.a. Finalise the accounts of Mr. X and compute his profit for the year ended 31.3.2006. Prepare statement of affairs and reconcile the profit and capital balance. |
| 20 | (0) |
| 2. | (a) | From the following information, compute the amount of provisions to be made in the Profit and Loss account of a Commercial bank: | Assets | Rs. in Lakhs | (i)
(ii) | Standard (Value of security Rs. 6,000 lakhs)
Sub–standard | 7,000
3,000 | | (iii) | Doubtful | (a) | Doubtful for less than one year
(Realisable value of security Rs. 500 in lakhs) | 1,000 | | (b) | Doubtful for more than one year, but less than 3 years
(Realisable value of security Rs. 300 lakhs) | 500 | | (c) | Doubtful for more than 3 years (No security) | 300 |
|
| 8 | (0) |
| | (b) | From the following details, prepare bills for collection (Asset) A/c and Bills for collection (Liability) A/c. | Rs. | On 1.4.2005, Bills for Collection were
During the year 2005–2006 Bills received for Collection
amounted to
Bill collected during the year 2005–06
Bill dishonored and returned during the year | 51,00,000
75,00,000
98,47,000
27,10,000 |
| 4 | (0) |
| | (c) | X Fire Insurance Co. Ltd commenced its business on 1.4.2005. It submits you the following information for the year ended 31.3.2006. | Rs. | Premiums received
Re–insurance premiums paid
Claims paid
Expenses of Management
Commission paid
Claims outstanding on 31.3.2006 | 15,00,000
1,00,00
7,00,000
3,00,000
50,000
1,00,000 |
Create reserve account for the year ended 31.3.2006. Prepare Revenue account for the year ended 31.3.2006. | 4 | (0) |
| 3. | Concept & Co. with Rs. Head Office at Mumbai has a branch at Nagpur. Goods are involved to the Branch at cost plus 33½%. The following information is given in respect of the branch for the year ended 31st March, 2006. | Rs. | Goods sent to Branch (Invoice price)
Stock at Branch on 1.4.2005 (Invoice price)
Cash sales
Returns of goods by custamers to the Branch
Branch expenses (paid in cash)
Branch debtors balance on 1.4.2005
Discount allowed
Bad debts
Collection from Debtors
Branch debtors cheques returned dishonoured
Stock at Branch on 31.3.2006 (Invoice price)
Branch debtors balance on 31.3.2006 | 4,80,000
21,000
1,80,000
6,000
53,500
30,000
1,000
1,500
2,70,000
5,000
48,000
36,500 |
Prepare under the Stock and Debtors system, the following Ledger Accounts in the books of the Head Office: | (i) | Nagpur Branch Stock Account | | (ii) | Nagpur Branch Debtors Account | | (iii) | Nagpur Branch Adjustment Account |
Also compute shortage of Stock at Branch, if any. | 16 | (0) |
| 4. | (a) | Raj Ltd. gives you the following information for the year ended 31st March, 2006: | (i) | Sales for the year Rs. 48,00,000. The Company sold goods for cash only. | | (ii) | Cost of goods sold was 75% of sales. | | (iii) | Closing inventory was higher than Opening inventory by Rs. 50,000. | | (iv) | Trade creditors on 31.3.2006 exceed the outstanding on 31.3.2005 by Rs. 1,00,000. | | (v) | Tax paid during the year amounts to Rs. 1,50,000 | | (vi) | Amounts paid to Trade creditors during the year Rs. 35,50,000 | | (vii) | Administrative and Selling expenses paid Rs. 3,60,000. | | (viii) | One new machinery was acquired in December, 2005 for Rs. 6,00,000 | | (ix) | Dividend paid during the year Rs. 1,20,000. | | (x) | Cash in hand and at Bank on 31.3.2006 Rs. 70,000. | | (xi) | Cash in hand and at Bank on 1.4.2005 Rs. 50,000. |
Prepare Cash Flow Statement for the year ended 31.3.2006 as per the prescribed Accounting standard. | 12 | (0) |
| | (b) | What all are the differences between Cash Flow statement and Fund Flow statement? | 4 | (0) |
|
| 5. | Firm X & Co. consists of partners A and B sharing Profits and Losses in the ratio of 3:2. The firm Y & Co. consists of partners B and C sharing Profits and Losses in the ratio of 5 : 3. On 31st March 2006 it was decided to amalgamate both the firms and form a new firm XY & Co., wherein A, B and C would be partners sharing Profits and Losses in the ratio of 4 : 5 : 1. | Balance Sheet as at 31.3.2006 | | Liabilities | X & Co. | Y & Co. | Assets | X & Co. | Y & Co. | Capitals:
A
B
C
Reserve
Creditors |
1,50,000
1,00,000
—
50,000
1,20,000
4,20,000 |
—
75,000
50,000
40,000
55,000
2,20,000 | Cash in Hand/bank
Debtors
Stock
Vehicles
Machinery
Building | 40,000
60,000
50,000
—
1,20,000
1,50,000
4,20,000 | 30,000
80,000
20,000
90,000
—
—
2,20,000 |
The following were the terms of amalgamation: | (i) | Goodwill of X & Co. was valued at Rs. 75,000. Goodwill of Y & Co. was valued at Rs. 40,000. Goodwill account not to be opened in the books of the new firm but adjusted through the Capital accounts of the partner. | | (ii) | Building, Machinery and Vehicles are to be taken over at Rs. 2,00,000. Rs. 1,00,000 and Rs. 74,000 respectively. | | (iii) | Provision for doubtful debts at Rs. 5,000 in respect of X & Co. and Rs. 4,000 in respect Y & Co. are to be provided. | | You are required to: | | (i) | Show, how the Goodwill value is adjusted amongst the partners. | | (ii) | Prepare the Balance Sheet of XY & Co. as at 31.3.2006 by keeping partners Capital in their profit sharing ratio by taking capital of 'B' as the basis. The excess or deficiency to be kept in the respective Partners' Current account. |
| 16 | (0) |
| 6. | Answer any four of the following: | 4x4=16 | |
| | (a) | X Co. Limited purchased goods at the cost of Rs. 40 lakhs in October, 2005. Till March, 2006, 75% of the stocks were sold. The company wants to disclose closing stock at Rs. 10 lakhs. The expected sale value is Rs. 11 lakhs and a commission at 10% on sale is payable to the agent. Advise, what is the correct closing stock to be disclosed as at 31.3.2006. | | (0) |
| | (b) | Explain the 'Accounting of Revaluation of Assets' with reference to AS – 10. | | (0) |
| | (c) | Explain the uses of Accounting information in agriculture farm. | | (0) |
| | (d) | Arjun Ltd. sold farm equipments through its dealers. One of the conditions at the time of sale is, payment of consideration in 14 days and in the event of delay interest chargeable @ 15% per annum. The Company has not realised interest from the dealers in the past. However, for the year ended 31.3.2006, it wants to recognize interest due on the balances due from dealers. The amount is ascertained at Rs. 9 lakhs. Decide whether the income by way of interest from dealers is eligible for recognition as per AS – 9. | | (0) |
| | (e) | AB Ltd. launched a project for producing product X in October, 2004. The Company incurred Rs. 20 lakhs towards Research and Development expenses upto 31st March, 2006. Due to prevailing market conditions, the Management came to conclusion that the product cannot be manufactured and sold in the market for the next 10 years. The Management hence wants to defer the expenditure write off to future years. Advise the Company as per applicable Accounting standard. | | (0) |
| | (f) | List the preferential creditors, who are eligible for preferential payment upon insolvency of an individual. | | (0) |
