ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION –APRIL 2014
B.COM – II SEMESTER
ADVANCED ACCOUNTING – I
Time: 3 hrs Marks: 100
SECTION – A
I) Answer ALL the questions. Each carries 2 marks. (2 x 10 =20)
1. State 5 methods of valuation of goodwill.
2. The intrinsic value of a share is Rs.260/- and its yield value is Rs.290/-.
Calculate the fair value of the share.
3. Explain Recoupment of short working.
4. What is meant by ‘poor selling line’ of goods? Compare the Gross Profit ratio of
these goods with that of normal stock.
5. The super profits of a company is Rs.25,000/-. The present value of an annuity
of Re.1, for 3 years at 10% per annum is 2.478. Calculate the value of goodwill
using Annuity method.
6. Ascertain Opening Stock when:-
Purchases 60,000
Wages 20,000
Sales 1,00,000
Closing stock 15,000
Percentage of gross profit on sales is 25%
7. As per the Revised Schedule VI of the Co’s Act. Where do the following items
appear in the Balance Sheet?
(a) Preliminary Expenses (b) Bills discounted but not yet matured
(b) Calls in Advance (d) Workmen’s Accident Compensation Fund
8. State the formula for valuation of Right Shares.
9. State two differences between Dependent and Independent Branches.
10. The Head office charges the Branch at cost plus 25%. Goods sent to Branch is
Rs.40,000/- Goods returned to Head office is Rs.600/-. What is the net value of
Goods sent to Branch?
SECTION – B
II) Answer ANY FOUR questions. Each carries 5 marks. (4 x 5 =20)
11. Under what heads will you show the following items in the Balance Sheet of the
Company?
a. Securities Premium
b. Interest accrued but due on secured loan
c. Interest accrued but not due on loan
d. Uncalled liability on partly paid shares
e. Capital Reserve
f. Debit balance in the statement of profit and loss
2
g. Employees earned leave payable on retirement
h. Computer soft wares
i. Goods in transit
j. Provision for Provident Fund Scheme
12. The following particulars are available in respect of the business carried on by
Wisehead:
Rs.
1 Capital invested 50,000
2 Trading results:
2010 Profits Rs.12,200; 2011 Profit Rs.15,000;
2012 Loss Rs.2,000; 2013 Profits Rs.21,000
3 Market rate of interest on investments 8%
4 Rate of risk return on capital invested in
business
2%
5 Remuneration from alternative employment of
the proprietor (if not engaged in business)
3,600 per
annum
You are required to compute the value of goodwill on the basis of 3 years’ purchase of
super profits of the business calculated on the average profits of the last four years.
13. Prosperous Company is planning to raise funds by making rights issue of equity
shares to finance its expansion. The existing ordinary share capital of the
company is Rs. 2 Crore. The par value of its shares is Rs. 20 and the Market price
is Rs. 80. The alternatives under consideration before the management for
making rights issue are given below:
a) 4 new shares for 4 old shares @ par.
b) 3 new shares for 5 old shares @ Rs. 30.
c) 2 new shares for 5 old shares @ Rs. 40
d) 1 new share for 5 old shares @ Rs. 50.
Calculate the theoretical market price after the issue.
14. From the following particulars, prepare Branch Account showing the Profit or
Loss for the branch:
Opening Stock at the branch 60,000
Goods sent to branch 1,80,000
Sales (Cash) 2,40,000
Expenses:
Salaries 20,000
Other Expenses 8,000
Closing stock could not be ascertained, but it is known that the Branch generally
sells at cost plus 20%. The branch manager is entitled to a commission of 5% on
the profit before charging such commission.
15. Hubli Coal worked under a lease which provided for the payment of royalties at
Rs.5/- per ton with a minimum rent of Rs.25,500 per annum. Each year’s excess
Latest Govt Job & Exam Updates: