Loyola College B.Com April 2008 Adv. Corporate Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

RO 33

 

SIXTH SEMESTER – APRIL 2008

CO 6606 – ADV. CORPORATE ACCOUNTS

 

 

 

Date : 23/04/2008                Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

SECTION     A

Answer All questions                                                                           10 x 2 = 20

 

  1. What do you mean by money at call and short notice?
  2. What is meant by bonus in reduction of premium?
  3. What do you understand by ‘pooling of interest’?
  4. Distinguish between double accounting and single accounting system.
  5. Write short note on net payment method of purchase consideration.
  6. From the following , you are required to calculate the amount of claims to be shown

in the revenue account for year ending 31.12.2005.

Claims paid in 2005 Rs. 3,06,000; Claim on account of re-insurance was Rs. 75,000;

Claim outstanding for 2004 Rs. 45,000;Claims outstanding for the year 2005

Rs. 36,000.

  1. Under which schedule of the Bank will the following items appear in the final

statement? a) Staff welfare expenses; b) Interest paid on fixed deposit; c) Interest on

balance deposited with RBI.

  1. While closing the books of a bank on 31st December 2003, you find in the loan

ledger as unsecured balance of Rs. 2 lakhs in the account of a merchant whose

financial condition is reported to you as bad.  Interest on the same account amounted

to Rs. 20,000 during the year.  During the year 2004, the bank accepted 75 paise in the

rupee on account of the debt upto 31st December 2003.  Find out the amount of bad

debts.

  1. Calculate the amount of unrealized profit included in stock from the following

information.

Closing stock of Rs. 6,40,000 held by ‘A’ Ltd. consist of Rs. 2,40,000 goods

purchased from “B” Ltd. who charged 20% profit on sales. “A” Ltd. is the

holding company of “B” Ltd. with 80% share holding.

10.The revenue account of life insurance company shows the life assurance fund on 31st

March, 2002, at Rs. 62,21,310 before taking into account the following items:

(i) Claims covered under re-insurance Rs. 12,000 (ii) Bonus utilized in reduction of

life insurance premium Rs. 4,500 (iii) Interest accrued on securities Rs. 8,260

What is the life assurance fund after taking into account the above omissions?

 

SECTION    B

Answer any FIVE only.                                                                                        5 x 8=40

 

  1. Write short notes on (a) valuation balance sheet, (b) rebate on bill discounted,

(c) minority interest , (d) re-insurance

  1. Give the format of Profit & Loss account prescribed in Banking Regulation Act.

 

  1. Bright Electricity Ltd. earned a profit of RS. 26,95,000 for the year ended

31st March 2002 after debenture interest at 14% on Rs. 5,00,000.  Calculate

the reasonable return after taking into consideration the following facts also:

 

Fixed assets (original cost)                                                 2,00,00,000

Formation and other expenses                                               10,00,000

Monthly average of current assets(net)                                  50,00,000

Reserve fund(represented by 8% Government securities)     20,00,000

Contingencies reserve investments                                          5,00,000

Loan from Electricity Board                                                  30,00,000

Total depreciation on fixed assets, written off to date           40,00,000

Tariffs and dividends control reserve                                      1,00,000

Security deposits received from customers                             4,00,000

Assume the bank rate to be 10%

 

 

  1. X Ltd. agreed to acquire the business of Y Ltd. as on 31.12.1999. The summary of

the Balance Sheet of Y Ltd. on that date was as follows:-

Rs.                                            Rs.

Equity Shares of Rs. 10 cash            6,00,000             Goodwill              1,00,000

General Reserve                                1,70,000             Land & Bldg        6,40,000

Profit & Loss A/c.                             1,10,000             Stock                    1,68,000

6% Debentures                                  1,00,000             Debtors                   36,000

Creditors                                               20,000             Cash                       56,000

————-                                      ————

10,00,000                                       10,00,000

The consideration payable to X Ltd. was agreed as follows:

  1. a cash payment of Rs. 2.50 for every share in Y Ltd.
  2. Issue of 9000 equity shares of Rs. 10/- fully paid in X Ltd. having a agreed value of Rs. 15 per share.
  3. Issue of such an amount of fully paid 5% Debentures of X Ltd. at 96% as is sufficient to discharge 6% debentures of Y Ltd. at a premium of 20%

Assets are revalued by X Ltd. as follows:

Land & Building       Rs. 12,00,000

Stock                         Rs.   1,42,000

Debtors at book value less 5% for doubtful debtors

Prepare the realisation  account in the books of Y Ltd.

 

  1. Life insurance gets its valuation made once in every two years. It’s life assurance

fund on 31.12.96 stood at Rs. 55,55,000 before providing for Rs. 55,000, being

shareholders dividend for 1996.  Its acturial valuation on 31.12.96 disclosed a net

liability of Rs. 35,00,000.  An interim bonus of Rs. 1,00,000 was paid to the policy

holders during the previous two years. You are required to show  (a) Valuation Balance Sheet (b)Net

Profit for the period and (c) The distribution of the surplus.

 

  1. The following is an extract from Trial balance of a Bank as on 31.3.2005.
  Debit

Rs.

Credit

Rs.

      Bill discounted

Rebate on Bill discounted 1.04.04

Discounted Received

  50,00,000  

20,057

1,50,000

 

   Date Bill amount (Rs.) Period of Bill Rate of Discount p.a
    02.01.05

15.02.05

03.03.05

 

1,00,000

40,000

30,000

 

     90 days

60 days

30 days

 

      7%

12%

11%

Calculate the amount of unexpired discount and pass the necessary adjusting journal

entries  from the above information.

  1. From the following particulars prepare the Fire Revenue Account for 1998.

Claims paid                                                      Rs. 2,35,000

Legal expenses regarding claims                                5,000

Premium received                                                   6,00,000

Re insurance premium                                               60,000

Commission                                                            1,00,000

Expenses of management                                       1,50,000

Provision against unexpired risk on 1.1.98             2,60,000

Claims unpaid on 1.1.98                                             20,000

Claims unpaid on 31.12.98                                         35,000

  1. On 31st March 2006, the Balance Sheet of Y Ltd. Stood as follows:

Liabilities                                                      Assets

Share capital  60,000 equity shares                      Machinery              Rs. 5,50,000

of Rs. 10 each fully paid       Rs. 6,00,000           Furniture                        1,35,200

Capital Reserve                              13,000           Stock                              3,15,800

Foreign Project Reserve                   9,700           Debtors                          1,29,300

General Reserve                             75,350           Cash at Bank                     74,360

P & L Account                               24,130

3,000 11% Debentures                3,00,000

Creditors                                      1,82,480

——————                                          —————–

12,04,660                                                 12,04,660

On this date, Y Ltd. was absorbed by X Ltd. The scheme of absorption provided that share holders of Y Ltd. would get 110 shares of X Ltd. of Rs. 100 each for every 100 shares held in Y Ltd. and 3,000 11% debentures of Y Ltd. would be converted into equal number of 12% debentures of X Ltd. of Rs. 100 each.  You are required to pass journal entries in the books of X Ltd. assuming that the absorption is in the nature of merger.

 

SECTION    C                            (2 x 20 = 40)

Answer any Two only

 

  1. From the following Trial Balance of Chennai Bank Ltd., prepare the final accounts

for the year ending 31.12.2002.

Money at call                         Rs. 8,00,000       Share Capital                   Rs. 20,00,000

Cash in hand & RBI                     6,50,000       Reserve Fund                           6,00,000

Investments                                 18,50,000       Deposits                                25,00,000

Loans                                           15,00,000       Short loans                             5,00,000

Cash Credits                                  5,00,000        Interest & discount                8,00,000

Premises                                        5,80,000        Commission                           1,70,000

Furniture                                        1,20,000        Locker rent                               60,000

Interest paid                                   3,00,000        P/L(1.1.2002)                           20,000

Salaries                                          2,15,000

Non Banking assets                          80,000

Audit fees                                          30,000

Other expenses                                  25,000

—————-                                                ————-

   66,50,000                                                     66,50,000

  1. a) Provide Rs. 20,000/- for doubtful debts and Rs. 40,000/- for taxes.
  2. b) Provide Rs. 10,000/- for rebate on bills discounted.
  3. c) Acceptances on behalf of the customers accounted to Rs. 4,00,000/-
  4. d) Depreciate furniture 10% p.a.
  5. e) Directors propose 5% dividend.

 

  1. Following are the Balance sheets of A Ltd. and B Ltd. as on 31.03.2002.

A    Ltd.

     Particulars              Rs.    Particulars        Rs.
Share Capital

40,000 Equity shares of Rs. 100 each

General Reserve

Current Liabilities

 

 

40,00,000

30,00,000

    30,00,000

1,00,00,000

Fixed Assets

Investments

Current assets

  30,00,000

5,00,000

65,00,000

 

__________

1,00,00,000

 

 

B  Ltd.

      Particulars             Rs.    Particulars        Rs.
Share Capital

20,000Equity shares of Rs. 50 each

General Reserve

Current Liabilities

Provision for tax

Proposed dividend

 

 

 

10,00,000

5,00,000

1,00,000

1,00,000

      1,00,000

    18,00,000

Goodwill

Fixed assets

Current assets

     50,000

3,50,000

14,00,000

 

 

 

__________

18,00,000

B Ltd. is to be absorbed by A Ltd. on the following terms:

(i) B Ltd. declares a dividend of 10% before absorption for the payment of

Which it is to retain sufficient amount of cash.

(ii)  The net worth of B Ltd. is valued at Rs. 14,50,000

(iii)  The purchase consideration is satisfied by the issue of fully paid-up shares

Of Rs. 100 each in A Ltd.

Following further information is also to be taken into consideration:

  • A Ltd. holds 5,000 shares of B Ltd. at a cost of Rs. 3,00,000
  • The stocks of B Ltd. include items valued at Rs. 1,00,000 purchased from A Ltd. (cost to A Ltd.Rs. 75,000)
  • The creditors of B Ltd. include Rs. 50,000 due to A Ltd.

Show ledger accounts in the books of B Ltd. to give effect to the above and Balance

Sheet of A Ltd. after completion of the absorption.

 

  1. Big Ltd. purchased control of Small Ltd. on 1.7.2004. Following are the Balance

Sheets of the two companies at 31.12.2004

Liabilities    Big. Ltd.     Small

Ltd.

Assets    Big. Ltd.       Small

Ltd.

Equity share capital of Rs. 10 each

General Reserve

P & L A/c

Creditors

Bills payable to Big Ltd.

Contingent liability of Big Ltd. for Rs. 9,000 for bills discounted

 

3,60,000

36,000

60,000

60,000

__

 

 

 

 

_______

5,16,000

 

1,80,000

30,000

60,000

42,000

 

6,000

 

 

 

________

3,18,000

Goodwill

Building

Machinery

Stock in trade

Debtors

Investment in 13,500 shares of Small Ltd.

Cash at bank

 

       6,000

60,000

1,20,000

70,500

30,000

 

 

2,02,500

27,000

 

________

5,16,000

     24,000

60,000

1,08,000

60,000

54,000

 

 

 

12,000

 

________

3,18,000

 

Small Ltd. had on 1.1.2004 Rs. 30,000 in General Reserve and Rs. 36,000(Cr.) in Profit and Loss Account. 10% dividend was received by Big. Ltd. in July from Small Ltd. for 2003 and this amount was credited to Profit and Loss Account of holding company. Machinery standing in the books of Small Ltd. at Rs. 1,20,000 on the date of purchase was revalued at Rs. 1,44,000. Stock of Small Ltd. includes Rs. 9,600 received from Big Ltd. on which it made a profit of 25% on cost.

 

Prepare the Consolidated Balance Sheet.

 

 

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