Roll No……… | |
Total No. of Questions — 6] | [Total No. of Printed Pages — 4 |
Time Allowed : 3 Hours | Maximum Marks : 100 |
Answer all Questions |
Wherever appropriate, suitable assumption(s) should be made by the candidates. |
Working notes should form part of the answer |
Marks |
1. | Answer the following questions: | 10x2=20 | ||||||||||||||||||||||||||||
(i) | A Company had issued 20,000, 13% Convertible debentures of Rs.100 each on 1st April, 2007. The debentures are due for redemption on 1st July, 2009. The terms of issue of debentures provided that they were redeemable at a premium of 5% and also conferred option to the debentureholders to convert 20% of their holding into equity shares (Nominal value Rs.10) at a price of Rs.15 per share. Debentureholders holding 2,500 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the Debentureholders exercising the option to the maximum. | (0) | ||||||||||||||||||||||||||||
(ii) | Santosh Ltd. has received a grant of Rs.8 crores from the Government for setting up a factory in a backward area. Out of this grant, the company distributed Rs.2 crores as dividend. Also, Santosh Ltd. received land free of cost from the State Government but it has not recorded it at all in the books as no money has been spent. In the light of AS 12 examine, whether the treatment of both the grants is correct. | (0) | ||||||||||||||||||||||||||||
(iii) | Rohini Limited has obtained loan from an Institution for Rs.500 lacs for modernization and renovation of its plant and machinery. The installation of plant and machinery was completed on 31.3.2009 amounting to Rs.320 lacs and Rs.50 lacs was advanced to suppliers of additional assets and the balance of Rs.130 lacs has been utilized for working capital requirements. Total interest paid for the above loan amounted to Rs.65 lacs during 2008-09. You are required to state how the interest on institutional loan is to be accounted for in the year 2008-09. | (0) | ||||||||||||||||||||||||||||
(iv) | A Company follows April to March as its financial year. The Company recognizes cheques dated 31st March or before, received from customers after balance sheet date, but before approval of financial statement by debiting ‘Cheques in hand account’ and crediting ‘Debtors account’. The ‘cheques in hand’ is shown in the Balance Sheet as an item of cash and cash equivalents. All cheques in hand are presented to bank in the month of April and are also realised in the same month in normal course after deposit in the bank. State with reasons, whether the collection of cheques bearing date 31st March or before, but received after Balance Sheet date is an adjusting event and how this fact is to be disclosed by the company? | (0) | ||||||||||||||||||||||||||||
(v) | What is Piecemeal payments method under Partnership Dissolution? Briefly explain the two methods followed for determining the order in which the payments are made? | (0) | ||||||||||||||||||||||||||||
(vi) | Briefly explain “Reserve for Unexpired Risks” under General Insurance Business. What are the percentages of such reserve to be created under IRDA Act for various General Insurance businesses? | (0) | ||||||||||||||||||||||||||||
(vii) | On 31st March, 2010, the following ledger balances have been extracted from the books of Washington branch office:
You are required to convert above Ledger balances into Indian Rupees. Use the following rates of exchange:
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(viii) | Mention the condition when a cash credit overdraft account is treated as ‘out of order’. | (0) | ||||||||||||||||||||||||||||
(ix) | From the following information, calculate the amount of sundry debtors as on 31.3.2010: Balance as on 1.4.2009 is Rs.50,000. Bad debts are 2% and discount to the customers is given @ 1% of the opening balance of sundry debtors. Returns from the customers are Rs.3,000. Cash received from debtors is Rs.2,30,000. Cash received from debtors in transit is Rs.14,000. Cash sales are Rs.5,00,000. Credit sales are Rs.2,50,000. | (0) | ||||||||||||||||||||||||||||
(x) | Closing stock for the year ending on 31.3.2010 is Rs.50,000 which includes stock damageed in a fire in 2008–09. On 31.3.2009, the estimated net realisable value of the damageed stock was Rs.12,000. The revised estimate of net realisable value of damageed goods amounting Rs.4,000 has been included in closing stock of Rs.50,000 as on 31.3.2010. Find the value of closing stock to be shown in Profit and Loss account for the year 2009–10. | (0) | ||||||||||||||||||||||||||||
2. | P and Q are partners of P & Co. sharing Profit and Losses in the ratio of 3:1 and Q and R are partners of R & Co., sharing profits and losses in the ratio of 2:1. On 31st March, 2009, they decide to amalgamate and form a new firm M/s PQR & Co., wherein P, Q and R would be partners sharing profits and losses in the ratio of 3:2:1. The Balance Sheets of two firms on the above date are as under:
The amalgamated firm took over the business on the following terms:
You are required to prepare the Balance Sheet of new firm and capital accounts of the partners in the books of old firms. | 16 | (1) | |||||||||||||||||||||||||||
3. | Following is the Balance Sheet of XYZ Ltd. as on 31st March, 2010:
Due to heavy losses and overvaluation of assets, the following scheme of reconstruction was finalised:
Pass necessary journal entries in the books of XYZ Ltd. assuming that all the legal formalities have been completed. Prepare capital reduction account and Balance Sheet of the company after reduction. | 16 | (0) | |||||||||||||||||||||||||||
4. | (a) | Ram Limited of Chennai has a branch at Nagpur to which office, goods are invoiced at cost plus 25%. The branch makes sales both for cash and on credit. Branch expenses are paid direct from Head Office and the branch has to remit all cash received into the Head Office Bank Account at Nagpur. From the following details, relating to the year 2009, prepare the accounts in Head Office Ledger and ascertain Branch Profit as per stock and debtors method. Branch does not maintain any books of accounts, but sends weekly returns to head office:
| 8+8=16 | (0) | ||||||||||||||||||||||||||
(b) | From the following information furnished to you by Ayushman Insurance Co. Ltd., you are required to pass Journal entries relating to unexpired risk reserve and show in columnar form “Unexpired Risks Reserve Account” for 2009.
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5. | (a) | Given below is an extract from the trial balance of T.K. Bank Limited as on 31st December, 2009:
An analysis of the bills discounted is shown below:
Show the workings, how the relevant items will appear in the bank’s Profit and Loss account as on 31st December, 2009 and in bank’s Balance Sheet as on 31st December, 2009. | 8+8=16 | (0) | ||||||||||||||||||||||||||
(b) | From the following Trial Balance of PQ Ltd. on 31.12.2009, prepare liquidators’ final statement of account:
Following points should be kept in mind:
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6. | (a) | Chaitanya Limited issues 40,000 shares. Issue is underwritten by A, B and C in the ratio of 5:3:2 respectively. Unmarked applications totalled 2,000 whereas marked applications are as follows:
Calculate the net liability of each one of the underwriters. | 4x4=16 | (0) | ||||||||||||||||||||||||||
(b) | How will you disclose the following Ledger balances in the Final accounts of DVD bank:
• Surplus available Additional information:
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(c) | B&P Ltd. availed a lease from N&L Ltd. The conditions of the lease terms are as under:
Consider IRR = 10%. The present value of Re.1 due at the end of 3rd year at 10% rate of interest is Re.0.7513. The present value of annuity of Re.1 due at the end of 3rd year at 10% IRR is Rs.2.4868. State whether the lease constitute finance lease and also calculate unearned Finance income. | (0) | ||||||||||||||||||||||||||||
(d) | ABC Electricity Company laid down a main at a cost of Rs.24,00,000. Some years later the company replaced by improving the plant 2/3 portion of the main at a cost of Rs.40,00,000. The cost of material and labour having gone up by 25%. Sale of old material realised Rs.95,000. Old material value Rs.1,05,000 were used in renewal (including in above). Calculate the amount to be capitalised and show the journal entries for recording the transaction. | (0) |