| 1. | The following is the Balance Sheet of A Ltd. as at 31st March, 2006: | Liabilities | Rs. | Assets | Rs. | 8,000 equity shares of Rs.100 each
10% debentures
Loan from A
Creditors
General Reserve | 8,00,000
4,00,000
1,60,000
3,20,000
80,000
17,60,000 | Building
Machinery
Stock
Debtors
Bank
Goodwill
Misc. Expenses | 3,40,000
6,40,000
2,20,000
2,60,000
1,36,000
1,30,000
34,000
17,60,000 |
B Ltd. agreed to absorb A Ltd. on the following terms and conditions: | (1) | B Ltd. would take over all Assets, except bank balance at their book values less 10%. Goodwill is to be valued at 4 year’s purchase of super profits, assuming that the normal rate of return be 8% on the combined amount of share capital and general reserve. | | | (2) | B Ltd. is to take over creditors at book value. | | | (3) | The purchase consideration is to be paid in cash to the extent of Rs.6,00,000 and the balance in fully paid equity shares of Rs.100 each at Rs.125 per share.
The average profit is Rs.1,24,400. The liquidation expenses amounted to Rs.16,000. B Ltd. sold prior to 31st March, 2006 goods costing Rs.1,20,000 to A Ltd. for Rs.1,60,000. Rs.1,00,000 worth of goods are still in stock of A Ltd. on 31st March, 2006. Creditors of A Ltd. include Rs.40,000 still due to B Ltd.
Show the necessary Ledger Accounts to close the books of A Ltd. and prepare the Balance Sheet of B Ltd. as at 1st April, 2006 after the takeover. | |
| 20 | (0) |
| 2. | ‘X’ and ‘Y’ carrying on business in partnership sharing Profit and Losses equally, wished to dissolve the firm and sell the business to ‘X’ Limited Company on 31-3-2006, when the firm’s position was as follows: | Liabilities | Rs. | Assets | Rs. | X’s Capital
Y’s Capital
Sundry Creditors | 1,50,000
1,00,000
60,000
3,10,000 | Land and Building
Furniture
Stock
Debtors
Cash | 1,00,000
40,000
1,00,000
66,000
4,000
3,10,000 |
The arrangement with X Limited Company was as follows: | (i) | Land and Building was purchased at 20% more than the book value. | | | (ii) | Furniture and stock were purchased at book values less 15%. | | | (iii) | The goodwill of the firm was valued at Rs.40,000. | | | (iv) | The firm’s debtors, cash and creditors were not to be taken over, but the company agreed to collect the book debts of the firm and discharge the creditors of the firm as an agent, for which services, the company was to be paid 5% on all collections from the firm’s debtors and 3% on cash paid to firm’s creditors. | | | (v) | The purchase price was to be discharged by the company in fully paid equity shares of Rs.10 each at a premium of Rs.2 per share. | |
The company collected all the amounts from debtors. The creditors were paid off less by Rs.1,000 allowed by them as discount. The company paid the balance due to the vendors in cash.
Prepare the Realisation account, the Capital accounts of the partners and the Cash account in the books of partnership firm. | 16 | (0) |
| 3. | The following are the summarized Balance Sheets of ‘X’ Ltd. as on March 31, 2005 and 2006: | Liabilities | As on 31.3.2005
(Rs.) | As on 31.3.2006
(Rs.) | Equity share capital
Capital Reserve
General Reserve
Profit and Loss A/c
Long-term loan from the Bank
Sundry Creditors
Provision for Taxation
Proposed Dividends | 10,00,000
—
2,50,000
1,50,000
5,00,000
5,00,000
50,000
1,00,000
25,50,000 | 12,50,000
10,000
3,00,000
1,80,000
4,00,000
4,00,000
60,000
1,25,000
27,25,000 |
| Assets | Year
2005
(Rs.) | Year
2006
(Rs.) | Land and Building
Machinery
Investment
Stock
Sundry Debtors
Cash in Hand
Cash at Bank | 5,00,000
7,50,000
1,00,000
3,00,000
4,00,000
2,00,000
3,00,000
25,50,000 | 4,80,000
9,20,000
50,000
2,80,000
4,20,000
1,65,000
4,10,000
27,25,000 |
Additional Information: | (i) | Dividend of Rs.1,00,000 was paid during the year ended March 31, 2006. | | (ii) | Machinery during the year purchased for Rs.1,25,000. | | (iii) | Machinery of another company was purchased for a consideration of Rs.1,00,000 payable in equity shares. | | (iv) | Income–tax provided during the year Rs.55,000. | | (v) | Company sold some investment at a profit of Rs.10,000, which was credited to Capital reserve. | | (vi) | There was no sale of machinery during the year. | | (vii) | Depreciation written off on Land and Building Rs.20,000. |
From the above particulars, prepare a cash flow statement for the year ended March, 2006 as per AS 3 (Indirect method). | 16 | (0) |
| 4. | (a) | The life fund of Well-Life Assurance Co. was Rs.90,00,000 as on 31st December, 2005. The interim bonus paid during the valuation period was Rs.1,50,000. The periodical actuarial valuation determined the net liability at Rs.75,00,000. Surplus brought forward from the previous valuation was Rs.9,00,000. The directors of the company proposed to carry forward Rs.10,00,000 and to divide the balance between the shareholders and the policy holders. You are required to show: | (i) | The valuation Balance Sheet. | | (ii) | The Net Profit for the valuation period. | | (iii) | The distribution of the surplus. |
| 8 | (0) |
| | (b) | The following is an extract from the Trial Balance of Dream Bank Ltd. as at 31st March, 2006: Rebate on bills discounted as on 1-4-2005
Discount received | 68,259 (Cr.)
1,70,156 (Cr.) | | Analysis of the bills discounted reveals as follows: | Amount (Rs.)
2,80,000
8,72,000
5,64,000
8,12,000
6,00,000 | Due date
June 1, 2006
June 8, 2006
June 21, 2006
July 1, 2006
July 5, 2006 |
You are required to find out the amount of discount to be credited to Profit and Loss account for the year ending 31st March, 2006 and pass Journal Entries. The rate of discount may be taken at 10% per annum. | 8 | (0) |
|
| 5. | Mr. Ashok keeps his books in Single Entry system. From the following information, prepare Trading and Profit & Loss Account for the year ended 31st March, 2006 and the Balance Sheet as on that date: | Assets and Liabilities | 31.3.2005
(Rs.) | 31.3.2006
(Rs.) | Sundry Creditors
Outstanding expenses
Fixed Assets
Stock
Cash in Hand and at Bank
Sundry Debtors | 30,000
1,000
23,000
16,000
14,000
? | 25,000
500
22,000
22,500
16,000
36,000 |
Following further details are available for the Current year: | Rs. | | Rs. | Total receipts from debtors∗
Returns inward
Bad Debts
Total Sales
Discount received
Return outwards
Capital introduced (paid into Bank)
Cheques received from Debtors | 1,30,000
3,000
1,000
1,50,000
1,500
1,000
15,000
1,25,000 | Cash purchases
Fixed Assets purchased and
paid by cheque
Drawings by cheques
Deposited into the bank
Withdrawn from bank
Cash in hand at the end
Paid to creditors by cheques
Expenses paid | 2,000
1,000
6,500
10,000
18,500
2,500
1,20,000
20,000 |
| 16 | (0) |
| 6. | Answer any four of the following: | 4x4=16 | |
| | (a) | What are the costs that are to be included in Research and Development costs as per AS 8. | | (0) |
| | (b) | The Company reviewed an actuarial valuation for the first time for its Pension Scheme, which revalued a surplus of Rs.12 lacs. It wants to spread the same over the next 2 years by reducing the annual contribution to Rs.4 lacs instead of Rs.10 lacs. The average remaining life of the employees, if estimated to be 6 years, you are required to advise the Company considering the accounting standards 5 and 15. | | (0) |
| | (c) | X Ltd. entered into an agreement to sell its immovable property included in the Balance Sheet at Rs.10 lacs to another company for Rs.15 lacs. The agreement to sell was concluded on 28th February, 2006 and the sale deed was registered on 1st May, 2006. Comment with reference to AS 4. | | (0) |
| | (d) | What are the conditions that are to be satisfied for ‘Amalgamation in the nature of Merger’? | | (0) |
| | (e) | Write short note on “Appropriation Act” with reference to Government Accounts. | | (0) |
| | (f) | Define related party transaction under AS 18. | | (0) |
