| 1. | (a) | List out any four of accounting concepts. | 2x10=20 | (0) |
| | (b) | State the disclosure requirements in the financial statements of a contractor. | | (0) |
| | (c) | State the componants of financial statement. | | (0) |
| | (d) | State the accounting treatment regarding valuation of fixed assets where several assets are purchased for consolidated price. | | (0) |
| | (e) | State with reasons whether the following statements are True or False: | (i) | Accounting principle is general rule followed in preparation of financial statements. | | (ii) | the inventory under As 2 is valued on the basis of cost price or current replacement cost whichever is lower. |
| | (0) |
| | (f) | What is meant by "intrinsic value" in regard to valuation of equity shares? | | (0) |
| | (g) | Link–up the items with appropriate accounting systems: | Items | Accounting system | | (i) | Commission on re-insurance | (1) | Bank Account | | (ii) | Net Revenue Account | (2) | Company Account | | (iii) | Forfeited shares A/c | (3) | Double Accounting system | | (iv) | Acceptances, endorsements and other obligations | (4) | Insurance Accounts |
| | (0) |
| | (h) | In case of membership fees of club, how to treat the same in the Income and Expenditure A/c and Balance Sheet? | | (0) |
| | (i) | Goodwill is a rough measure of the earning power of the capital employed by an entity — True or False. | | (0) |
| | (j) | For accounting purposes, what steps are required in case of amalgamation in the nature of purchase or absorption or external reconstruction? | | (0) |
| 2. | The following are the Balance Sheets of Good Ltd. and Bad Ltd. as on 31.03.2007: | Good Ltd.
(Rs. in crores) | | Bad Ltd.
(Rs. in crores) | Sources of Funds:
Share Capital:
Authorised
Issued and Subscribed Equity Shares of
Rs. 10/- each fully paid
Reserves and surplus
Shareholders Fund
Unsecured loan from Good Ltd.
Funds employed in Fixed Assets cost
Less: Depreciation
Written down value
Investment at Cost:
30 lakhs equity shares of Rs. 10 each of Bad Ltd.
Long term loan to Bad Ltd.
Current Asset: |
200
(—) 133 |
25
12
88
100
—
100
80
60
20
3
10
67
100 |
134
(—) 155 |
5
5
10
15
10
25
40
34
6
—
—
19
25 |
On that day Good Ltd., absorbed Bad Ltd. The Members of Bad Ltd. are to get one eqity share of Good Ltd. issued at a premium of Rs. 2 per share for every five equity share held by them in Bad Ltd. The necessary approvals are obtained. You are asked to pass Journal entries in the books of the two companies to give effect to the above. | 16 | (0) |
| 3. | From the following Balance Sheet of A Ltd. as at 31st March, 2007, compute the value of Goodwill on the basis of Super Profits method assuming 3 years' purchase: | Liabilities | | Rs. | Assets | Rs. | 5,000 10% pref. shares of
Rs. 10 each fully paid
25,000 equity shares of
Rs. 10 each fully paid
Profit & Loss A/c:
Balance on 1.4.2006
Add: Profit for 2007
Creditors |
50,000
2,50,000
30,000
1,70,000 |
2,00,000
20,000 | Buildings
Less: Depreciation
Plant Machinery
Less: Depreciation
Investments @ 8% p.a.
Stock
Debtors
Cash at Bank |
1,50,000
2,00,000
50,000
40,000
60,000
20,000 | | | 5,20,000 | | 5,20,000 |
The following informations is furnished to You: | (i) | Building is worth Rs. 3,00,000. | | (ii) | Profits for last three years have shown an increase of Rs. 30,000 annually. | | (iii) | In the financial year 2004-2005, repair charges of Rs. 30,000 stood capitalised in the building. | | (iv) | Investments consists of 500 8% bonds of Rs. 100 each. | | (v) | Normal rate of return is 12.5% p.a. | | (vi) | Taxation may be resumed at 40%.
Show necessary workings. |
| 16 | (0) |
| 4. | The following is the Balance Sheet of Shri Raman as on 30th June, 2006: | Liabilities | Rs. | Assets | Rs. | Capital Account
Loan
Creditors | 96,000
30,000
62,000 | Building
Furniture
Motor Car
Stock
Debtors
Cash in hand
Cash at Bank | 65,000
10,000
18,000
40,000
34,000
4,000
17,000 | | 1,88,000 | | 1,88,000 |
A riot occurred on the night of 30th June, 2006 in which all books and records were lost. The Cashier had absconded with the available cash. Shri Raman gives you the following information: | (a) | His sales for the year ended 30th June, 2006 were 20% higher than the previous year's. He always sells his goods at cost plus 25%, 20% of the total sales for the year ended 30th June, 2006 were for cash. There were no cash purchases. | | (b) | On 1st July, 2005, the stock level was raised to Rs. 60,000 and stock was maintained at this new level all throughout the year. | | (c) | Collections from debtors amounted to Rs. 2,80,000 of which Rs. 70,000 was received in cash. Business expenses amounted to Rs. 40,000 of which Rs. 10,000 was outstanding on 30th June, 2006 and Rs. 12,000 was paid by cheques. | | (d) | Analysis of the pass book revealed the following: | Rs. | Payment to Creditors
Personal Drawings
Cash deposited in Bank
Cash withdrawn from Bank | 2,75,000
15,000
1,43,000
24,000 |
| | (e) | Gross profit as per last year's audited accounts was Rs. 60,000 | | (f) | Provide depreciation on Building and Furniture at 5% and Motor car at 20%. | | (g) | The amount defalcated by the cashier may be treated as recoverable from him. |
Prepare the Trading and Profit and Loss Account for the year ended 30th June, 2006 and the Balance Sheet as on that date. | 6+6+4=16 | (0) |
|
| 5. | A firm has to take complete stock on 21st June, 2006, because of a deal for sale of business which fell through only at the last stage. As a consequence, it decided not to carry out stock taking on 30th June, 2006 when accounts were closed for the year. The stock was on 21.06.2006 Rs. 67,460. The following information is supplied to you regarding transactions in stock between 21.06.2006 and 30.06.2006. | (a) | Goods purchased from 21.06.2006 to 30.06.2006 amounted to Rs. 4,820, out of which goods worth Rs. 1,900 were received on 02.07.2006. | | (b) | Sales during the period from 21.6.2006 to 30.6.2006 amounted to Rs. 16,800 including Rs. 3,600 for goods sent on approval, half of which were still returnable on 30.06.2006. The firm sells goods at cost puls 25% but there was one lot of goods which had cost Rs. 2,800 but had to be sold for Rs. 1,200 due to damage. The stock as on 21.6.2006 included these goods at cost. | | (c) | Unsold goods in the hands of a consignee on 30.06.2006 were valued at Rs. 3,200. |
Prepare a statement showing the actual value of stocks as on 30th June, 2006. | 16 | (0) |
| 6. | Clear profits of Karikal Electricity Corporation Ltd. is Rs. 70,000 for the year ended 31st March 2006. Other details are as follows: | Rs. | Development Reserve
Loan by Electricity Board
Depreciation Provision
Tariff and Dividend Control Reserve
Cost of Fixed Assets
Compulsory Investment against Contingency Reserve
Working Capital | 2,00,000
4,00,000
60,000
50,000
8,00,000
2,00,000
2,00,000 |
Rate of interest on investment against contingency reserve is 5% p.a. Reserve Bank rate is 9%. From the data given above find out: | (d) | Distribution of clear profits. |
| 4x4=16 | (0) |
| 7. | Simplex Ltd. was incorporated on 1st April, 2006 to take over the running business of Mr. Robert. The purchase consideration was satisfied by allotment of: | (i) | 15,000 equity shares of Rs. 10 each issued at a premium of Rs. 2 per share; | | (ii) | 12,000 10% Redeemable preference shares of Rs. 10 each, at par redeemable on 31.03.2011; | | (iii) | Rs. 70,000 paid in cash. |
The company issued a prospectus for issuing 50,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share and 20,000 10% Redeemable preference shares of Rs. 10 each, at par. The entire amount in respect of the issued was received by 30th June, 2006 except final call of Rs. 3 per share on 2,500 shares issued to MRX, 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: | Rs. | | Solicitor's Fee
Printing of Memorandum
Stamping and Registration
Advertisement Expenses | 20,000
20,000
25,000
25,000 |
(Rs. 10,000 remaining unpaid) |
The company purchased a plot of land for Rs. 1,50,000, Further, it advanced Rs. 2,00,000 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. Robert was sold for Rs. 80,000 (Rs. 5,000 in excess of their book value.) Prepare 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 Simplex Ltd. made up to 30th June, 2006. | 16 | (0) |
| 8. | Write notes on the following: | 4x4=16 | |
| | (a) | Finance Accounts of Central Government; | | (0) |
| | (b) | Supplementary Grant of Government Finance; | | (0) |
| | (c) | Public Accounts Committee; | | (0) |
| | (d) | Consolidated Fund. | | (0) |
