1. | The following is the Balance Sheet of sri Agni Dev as on 31st March, 2001: Liabilities | Rs. | | Assets | Rs. | Capital account Sundry Creditors for purchases | 2,52,500 45,000 | | Machinery Furniture Stock Debtors Cash in Hand Cash at Bank | 1,20,000 20,000 33,000 1,00,000 8,000 16,500 | | 2,97,500 | | | 2,97,500 |
Riots occurred and fire broke out on the evening of 31st March, 2002, destroying the books of account and Furniture. The cashier was grievously hurt and the cash available in the cash box was stolen. The trader gives you the following information: (i) | Sales are affected as 25% for cash and the balance on credit. His total sales for the year ended 31st March, 2002 were 20% higher than the previous year. All the sales and purchases of goods were evenly spread throughout the year (as also in the last year). |
(ii) | Terms of credit Debtors Creditors | 2 Months 1 Month |
| (iii) | Stock level was maintained at Rs. 33,000 all throughout the year. | (iv) | A steady Gross Profit rate of 25% on the turnover was maintained throughout. Creditors are paid by cheque only, except for cash purchase of Rs. 50,000 | (v) | His private records and the Bank Pass-Book disclosed the following transaction for the year. (i) | Miscellaneous Business expenses | Rs. 1,57,500 (including Rs. 5,000 paid by cheque and Rs. 7,500 was outstanding as on 31st March, 2002. | (ii) | Addition to Machinery | Rs. 60,000 (paid by cheque) | (iii) | Private drawings | Rs. 30,000 (paid by cash) | (iv) | Travelling expenses | Rs. 18,000 (paid by cash) | (v) | Introduction of Additional Capital by depositing in to the bank | Rs. 5,000 (paid by cash) |
| (vi) | Depreciation on Machinery is to be provided @15% on the Closing Book value | (vii) | The cash stolen is to be charged to the Profit and Loss Account |
Prepare Trading, Profit and Loss Account for the year ended 31st March, 2002 and a Balance Sheet as on that date. Make appropriate assumptions wherever necessary. All workings should form part of your answer. | 20 | (0) |
2. | From the following information as on 31st March, 2002, prepare the Revenue Accounts of Sagar Bhima co. Ltd. engaged in Marine Insurance Business: | Particulars | Direct Business (Rs.) | | Re–insurance (Rs.) | I. | Premium: | | Received | 24,00,000 | 3,60,000 | | Receivable - 1st April | 1,20,000 | 21,000 | | – 31st March | 1,80,000 | 28,000 | | Premium paid | 2,40,000 | ––– | | Payable – 1st April | ––– | 20,000 | | –31st March | ––– | 42,000 | II. | Claims: | | Paid | 16,50,000 | 1,25,000 | | Payable –1st April | 95,000 | 13,000 | | – 31st March | 1,75,000 | 22,000 | | Received | –– | 1,00,000 | | Receivable – 1st April | ––– | 9,000 | | –31st March | ––– | 12,000 | III. | Commission: | | On Insurance accepted | 1,50,000 | 11,000 | | On Insurance ceded | ––– | 14,000 |
Other expenses and income: Salaries - Rs.2,60,000 ; Rent, Rates and Taxes - Rs.18,000; Printing and Stationery - Rs. 23,000; Indian Income Tax paid - Rs. 2,40,000; Interest, Dividend and Rent received (net) - Rs. 1,15,500; Income Tax deducted at source - Rs. 24,500; Legal Expenses (Inclusive of Rs.20,000 in connection with the settlement of claims) - Rs.60,000; Bad Debts - Rs. 5,000; Double Income Tax refund - Rs. 12,000; Profit on Sale of Motor car Rs. 5,000. Balance of fund on 1st April was Rs. 26,50,000 including Additional Reserve of Rs. 3,25,000. Additional Reserve has to be maintained at 5% of the net premium of the year. | 16 | (0) |
3. | The financial position of two companies Hari Ltd. and Vayu Ltd. as on 31st March, 2002 was as under: Assets | Hari Ltd. (Rs.) | Vayu Ltd.(Rs.) | Goodwill | 50,000 | 25,000 | Buildings | 3,00,000 | 1,00,000 | Machinery | 5,00,000 | 1,50,000 | Stock | 2,50,000 | 1,75,000 | Debtors | 2,00,000 | 1,00,000 | Cash at Bank | 50,000 | 20,000 | Preliminary Expenses | 30,000 | 10,000 | | 13,80,000 | 5,80,000 |
Liabilities | Hari Ltd. (Rs.) | | Vayu Ltd. (Rs.) | Share Capital: | | | Equity Shares of Rs. 10 each | 10,00,000 | 3,00,000 | 9% Preference Shares of Rs. 100 each | 1,00,000 | –– | 10% Preference Shares of Rs. 100 each | -–– | 1,00,000 | General Reserve | 1,00,000 | 80,000 | Retirement Gratuity fund | 50,000 | 20,000 | Sundry Creditors | 1,30,000 | 80,000 | | 13,80,000 | 5,80,000 |
Hari Ltd. absorbs Vayu Ltd. on the following terms: (a) | 10% Preference Shareholders are to be paid at 10% premium by issue of 9% Preference shares of Hari Ltd. | (b) | Goodwill of Vayu Ltd. is valued at Rs. 50,000, Buildings are valued at Rs. 1,50,000 and the Machinery at Rs. 1,60,000 | (c) | Stock to be taken over at 10% less value and Reserve on Bad and Doubtful Debts to be created @ 7.5% | (d) | Equity Shareholders of Vayu Ltd. will be issued Equity Shares @ 5% premium |
Prepare necessary Ledger Accounts to close the books of Vayu Ltd. and show the acquisition entries in the books of Hari Ltd. Also draft the Balance Sheet after absorption as at 31st March, 2002. | 16 | (0) |
4. | Avinash, Rohit and Madwesh were carrying on business in partnership sharing Profits and Losses in the ratio of 5 : 4 : 3 respectively. The Trial Balance of the firm as on 31st March, 2002 was the following: Particulars | Dr. (Rs.) | | Cr.(Rs.) | Plant and Machinery @ Cost | 1,05,000 | — | Stock | 60,200 | — | Sundry Debtors | 85,000 | — | Sundry Creditors | — | 1,05,200 | |
Capital A/cs: | Avinash | — | 70,000 | Rohit | — | 50,000 | Madwesh | — | 30,000 | Drawings A/cs: | Avinash | 30,000 | — | Rohit | 25,000 | — | Madwesh | 20,000 | — | Depreciation on Plant and Machinery | — | 35,000 | Trading Profit for the year | — | 1,29,800 | Cash at Bank | 94,800 | — | | 4,20,000 | 4,20,000 |
Additional Information : | (a) | Interest on Capital Accounts at 10% on the amount standing to he credit of partner’s Capital Accounts at the beginning of the year was not provided before preparing the above Trial Balance. | | (b) | On 31st March, 2002 they formed a Private Ltd. Company Anagha (P) Ltd. to take over the partnership business. | | (c) | You are further informed as under: (i) | Plant and Machinery is to be transferred at Rs. 80,000 | (ii) | Equity Shares of Rs. 10 each of the company are to be issued to the partners at par in such numbers to ensure that by reason of their share holdings alone. They will have the same rights of sharing Profits and Losses as they had in the partnership. Balance if any in their Capital Accounts will be settled by giving 7 1/2% Preference Shares at par. | (iii) | Before transferring the business, the partners withdrew by cash from partnership the following amounts over and above the drawings as shown in the Trial Balance: (a) | Avinash | Rs.20,000 | (b) | Rohit | Rs.10,600 | (c) | Madwesh | Rs.14,200 |
| (iv) | All Assets and Liabilities except Plant and Machinery and the Bank Balance are to be transferred at their value in the books of the partnership as at 31st March, 2002. | (v) | You are required to prepare: (a) | Profit and Loss Adjustment Account for the year ending 31st March, 2002. | (b) | Capital Accounts showing all the adjustments required to dissolve the partnership | (c) | A statement showing the number of shares of each class to be issued by the company to each of the partners to settle their accounts. | (d) | Prepare Balance Sheet of the company Anagha (P) Ltd. as on 31.03.2002 after take over of the business. |
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5. | From the following details relating to the Accounts of Grow More Ltd. prepare Cash Flow statement Liabilities | 31.3.2002 (Rs.) | | 31.3.2001 (Rs.) | Share Capital | 10,00,000 | 8,00,000 | Reserve | 2,00,000 | 1,50,000 | Profit and Loss account | 1,00,000 | 60,000 | Debentures | 2,00,000 | — | Provisions for taxation | 1,00,000 | 70,000 | Proposed dividend | 2,00,000 | 1,00,000 | Sundry Creditors | 7,00,000 | 8,20,000 | | 25,00,000 | 20,00,000 | Assets | Plant and Machinery | 7,00,000 | 5,00,000 | Land/Building | 6,00,000 | 4,00,000 | Investments | 1,00,000 | — | Sundry Debtors | 5,00,000 | 7,00,000 | Stock | 4,00,000 | 2,00,000 | Cash on hand/Bank | 2,00,000 | 2,00,000 | | 25,00,000 | 20,00,000 |
(i) | Depreciation @25% was charged on the opening value of Plant and Machinery. | (ii) | During the year one old machine costing 50,000 (WDV 20,000) was sold for Rs. 35,000 | (iii) | Rs. 50,000 was paid towards Income tax during the year. | (iv) | Building under construction was not subject to any depreciation | Prepare Cash flow Statement. | | 16 | (0) |
6. | Attempt any four of the following questions: | 4x4=16 | |
| (a) | When Capitalization of borrowing cost should cease as per Accounting Standard 16? | | (0) |
| (b) | Define a "Business Segment" and a "Geographical Segment" as per Accounting Standard 17. | | (0) |
| (c) | Briefly describe, how do you calculate "Diluted earnings per share" as per Accounting Standard 20. | | (0) |
| (d) | Briefly describe the disclosure requirements for "Deferred Tax Assets" and "Deferred Tax Liabilities" as per Accounting Standard 22. | | (0) |
| (e) | Write short note on Sale and Lease Back Transactions as per accounting Standard 19. | | (0) |
| (f) | Explain percentage of completion method in respect of Construction Contracts as per Accounting Standard 7. | | (0) |