| 1. | A, B and C are partners of the firm ABC & Co., sharing profits and losses in the ratio of 5:3:2. Following is the Balance Sheet of the firm as at 31.3.2008: | Balance Sheet as at 31.3.2008 | | Liabilities | Rs. | Assets | Rs. | Partners’ capital accounts:
A
B
C
Investment fluctuation reserve
Contingency reserve
Long–term loan
Bank overdraft
Sundry creditors |
4,50,000
1,30,000
1,70,000
1,00,000
75,000
15,00,000
2,20,000
8,00,000 | Goodwill
Building
Machinery
Furniture
Investments (market value
Rs.75,000)
Stock
Sundry debtors
Advertisement suspense | 1,00,000
10,50,000
6,50,000
2,15,000
60,000
6,50,000
6,95,000
25,000 | | 34,45,000 | | 34,45,000 |
It was decided that B would retire from the partnership on 1.4.2008 and D would be admitted as a partner on the same date. Following adjustments are agreed amongst the partners for the retirement/admission: | (i) | Goodwill is to be valued at Rs.5,00,000, but the same will not appear as an asset in the books of the firm. | | (ii) | Building and machinery are to be revalued at Rs.10,00,000 and Rs.5,20,000 respectively. | | (iii) | Investments are to be taken over by B at the market value. | | (iv) | Provision for doubtful debts to be maintained at 20% on sundry debtors. | | (v) | The capital of the reconstituted firm will be Rs.10,00,000 to be contributed by the partners A, C and D in their new profit sharing ratio of 2 :2 : 1. | | (vi) | Surplus funds if any will be used to pay the bank overdraft. | | (vii) | Amount due to retiring partner B will be transferred to his loan account.
Prepare: (i)
(ii)
(iii) | Revaluation Account;
Capital Accounts of the partners; and
Balance Sheet of the firm after reconstitution. |
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| 20 | (0) |
| 2. | Following are the summarised Balance Sheets of A Ltd. and B Ltd. as at 31.3.2008: | Particulars | A Ltd. | B Ltd. | Share capital: Equity shares 10 each (fully paid up)
Securities premium
General reserve
Profit and loss account
10% Debentures
Secured loan
Sundry creditors | 10,00,000
2,00,000
3,00,000
1,80,000
5,00,000
—
2,60,000 | 6,00,000
—
2,50,000
1,60,000
—
3,00,000
1,70,000 | | 24,40,000 | 14,80,000 | Land and building
Plant and machinery
Investment (5,000 shares of B Ltd.)
Stock
Debtors
Cash at bank | 9,00,000
5,00,000
80,000
5,20,000
4,10,000
30,000 | 4,50,000
3,80,000
–
3,50,000
2,60,000
40,000 | | 24,40,000 | 14,80,000 |
The companies agree on a scheme of amalgamation on the following terms: | (i) | A new company is to be formed by name AB Ltd. | | (ii) | AB Ltd. to take over all the assets and liabilities of the existing companies. | | (iii) | For the purpose of amalgamation, the shares of the existing companies are to be valued as under:
A Ltd. = Rs.18 per share
B Ltd. = Rs.20 per share | | (iv) | A contingent liability of A Ltd. of Rs.60,000 is to be treated as actual existing liability. | | (v) | The shareholders of A Ltd. and B Ltd. are to be paid by issuing sufficient number of shares of AB Ltd. at a premium of Rs.6 per share. | | (vi) | The face value of shares of AB Ltd. are to be of Rs.10 each. | | You are required to: | | (i) | Calculate the purchase consideration (i.e., number of shares to be issued to A Ltd. and B Ltd.). | | (ii) | Pass journal entries in the books of A Ltd. for the transfer of assets and liabilities. | | (iii) | Pass journal entries in the books of AB Ltd. for acquisition of A Ltd. and B Ltd. | | (iv) | Prepare the Balance Sheet of AB Ltd. |
| 16 | (0) |
| 3. | (a) | On 11.11.2007 the premises of Rocky Ltd. was destroyed by fire. The following information is made available: | Rs. | Stock as on 1.4.2006
Purchases from 1.4.2006 to 31.3.2007
Sales from 1.4.2006 to 31.3.2007
Stock as on 31.3.2007
Purchases from 1.4.2007 to 11.11.2007
Sales from 1.4.2007 to 11.11.2007 | 3,75,000
5,20,000
8,55,000
2,00,000
3,41,000
4,35,500 |
In valuing the stock on 31.3.2007, due to damagee 50% of the value of the stock which originally cost Rs.22,000 was written off. In June, 2007 about 50% of this stock was sold for Rs.5,500 and the balance of obsolete stock is expected to realize the same price (i.e., 50% of the original cost). The gross profit ratio is to be assumed as uniform in respect of other sales. Stock salvaged from fire amounts to Rs.11,500. Compute the value of stock lost in fire. | 8 | (0) |
| | (b) | From the following prepare General Ledger Adjustment account in Debtors Ledger and Debtors Ledger Adjustment account in General Ledger:
Balance as on 1.4.2008 | Rs. | Debit balances in Debtors ledger
Credit balances in Debtors ledger | 2,46,200
3,400 | | Transactions during the month of April, 2008 | Credit sales
Sales return
Cash received from debtors
Discount allowed to debtors
Bills receivable received from debtors
Bills receivable dishonoured
Bills payable given to suppliers | 9,74,900
21,700
8,62,100
39,200
51,200
3,500
27,000 | | Credit balance in Debtors ledger on 30.4.2008 | 5,200 |
| 8 | (0) |
| 4. | Following is the Receipts and Payments Account of Mayur Club for the year ended 31st March, 2008: Receipts
Opening balance (1.4.2007) | Rs. | Payments
Payments | Rs. | Cash on hand
Cash at bank | 39,100
50,000 | Sports materials
Salaries | 3,04,500
3,15,000 | Receipts:
Subscriptions | Equipment purchased on 1.10.2007
Bank fixed deposits on 31.3.2008 | 60,000
1,50,000 | For the year 2006–07
For the year 2007–08
For the year 2008–09
Interest on bank Fixed deposits @10% | 18,000
9,63,000
4,500
45,000 | Rent
Ground maintenance
Insurance
Stationery
Sundry expenses
Closing balance as on 31.3.2008
Cash on hand
Cash at bank | 1,48,500
22,120
38,400
3,450
5,880
31,750
40,000 | | 11,19,600 | | 11,19,600 |
Following additional information is provided to you: | (i) | The club has 220 members. The annual subscription is Rs.4,500 per member. | | (ii) | Depreciation to be provided on furniture at 10% p.a. and on sports equipment at 15% p.a. | | (iii) | On 31st March, 2008, stock of sports material in hand (after members use during the year) is valued at Rs.78,000 and stock of stationery at Rs.3,150. Rent for 1 month is outstanding. Unexpired insurance amounts to Rs.9,600. | | (iv) | On 31st March, 2007 the club had the following assets: Furniture
Sports equipment
Bank fixed deposit
Stock of stationery
Stock of sports material
Unexpired insurance
Subscription in arrear | Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs. | 2,70,000
1,80,000
4,50,000
1,500
73,500
8,400
22,500 | Note:There was no liability on 31.3.2007.
You are required to prepare:
(i) Income and Expenditure Account; and
(ii) Balance Sheet as at 31st March, 2008. |
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| 16 | (0) |
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| 5. | Answer any eight out of the following: | 8x2=16 | |
| | (i) | Mr. A advanced Rs.30,000 to Mr. B on 1.4.2008. The amount is repayable in 6 equal monthly installments commencing from 1.5.2008. Compute the average due date for the loan. | | (0) |
| | (ii) | A company sold 25% of the goods on cash basis and the balance on credit basis. Debtors are allowed 2 months credit and their balance as on 31.3.2008 is Rs.1,40,000. Assume that the sale is uniform through out the year. Calculate the total sales of the company for the year ended 31.3.2008. | | (0) |
| | (iii) | In a concern, the opening provision for doubtful debts is Rs.51,000. During the year a sum of Rs.10,000 was written off as bad debt. The closing balance of sundry debtors amounts to Rs.6,30,000. It was decided that 10% of the debtors is to be maintained as provision. Calculate the closing balance towards provision for doubtful debts and pass journal entry for giving effect to the provision maintained. | | (0) |
| | (iv) | How would you record a non-monetary grant received from the Government as per AS 12? | | (0) |
| | (v) | What is the accounting entry to be passed as per AS 10 for the following situations:
(a) Increase in value of fixed asset by Rs.50,00,000 on account of revaluation.
(b) Decrease in the value of fixed asset by Rs.30,00,000 on account of revaluation. | | (0) |
| | (vi) | "One of the characteristics of financial statements is neutrality" – Do you agree with this statement? | | (0) |
| | (vii) | An industry borrowed Rs.40,00,000 for purchase of machinery on 1.6.2007. Interest on loan is 9% per annum. The machinery was put to use from 1.1.2008. Pass journal entry for the year ended 31.3.2008 to record the borrowing cost of loan as per AS 16. | | (0) |
| | (viii) | What is Account current? | | (0) |
| | (ix) | Domestic Assurance Co. Ltd. received Rs.5,90,000 as premium on new policies and Rs.1,20,000 as renewal premium. The company received Rs.90,000 towards reinsurance accepted and paid Rs.70,000 towards reinsurance ceded. How much will be credited to Revenue Account towards premium? | | (0) |
| | (x) | A loan outstanding of Rs.50,00,000 has DICGC cover. The loan guaranteed by DICGC is assigned a risk weight of 50%. What is the value of Risk–adjusted asset? | | (0) |
| 6. | Answer any four out of the following: | 4x4=16 | |
| | (a) | When can an item qualify to be a prior period item as per AS 5? | | (0) |
| | (b) | Ram & Co. acquired a motor lorry on hire–purchase basis. It has to make cash down payment of Rs.1,00,000 at the beginning. The payments to be made subsequently are Rs.2,63,000; Rs.1,85,000 and Rs.1,14,000 at the end of first year, second year and third year respectively. Interest charged is @ 14% per annum. Calculate the cost price of motor lorry and interest paid in each installment. | | (0) |
| | (c) | Explain Garner v/s Murray rule applicable in the case of partnership firms. State, when is this rule not applicable. | | (0) |
| | (d) | Albert Ltd. issued 50,00,000 Equity shares of Rs.10 each. The whole issue was underwritten by A, B and C as below: A
B
C | 15,00,000 shares
25,00,000 shares
10,00,000 shares |
Applications were received for 48,50,000 shares of which the marked applications were as follows: A
B
C | 12,00,000 shares
25,00,000 shares
8,50,000 shares |
Calculate the number of shares to be taken up by the underwriters. | | (0) |
| | (e) | Explain the factors to be considered before selecting the pre–packaged accounting software. | | (0) |
| | (f) | What are the items that are to be excluded in determination of the cost of inventories as per AS–2? | | (0) |
