Loyola College B.Com April 2011 Adv. Corporate Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

SIXTH SEMESTER – APRIL 2011

CO 6606 – ADV. CORPORATE ACCOUNTS

 

 

 

Date : 09-04-2011              Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

 

PART – A

ANSWER ALL THE QUESTIONS:                                                                        (10 X 2=20)

  1. Explain the meaning of double insurance.
  2. Explain what is non- performing assets?
  3. Write a short note on minority interest.
  4. Write a note on purchase consideration.
  5. What is meant by double account system?
  6. A life assurance co. prepared its revenue account for the year ended 31.12.2007 and ascertained its life assurance fund to be 28,35,000. It was found later that the following has been omitted from the accounts.
  7. Interest accrued on investments Rs.39000; income tax liable to be deducted thereon is estimated to be Rs.10500.
  8. Outstanding premiums Rs.32800.
  9. Bonus utilized for reducation of premium Rs. 6750
  10. Claims intimated but not admitted Rs. 17400.
  11. Claims covered under reinsurance Rs. 6500.

What is the true life assurance fund?

  1. On 31st march 2008 bharat commercial bank ltd. Finds its advances classified as follows:

Rs.

Standard assets                                         1491300

Substandard assets                                    92800

Doubtful assets(secured):

Doubtful for one year                               25660

Doubtful for one year to three years         15640

Doubtful for more than three years          6580

Loss assets                                                            10350

Calculate the amount of provisions to be made by the bank against the above mentioned advances.

  1. Raman ltd. Agrees to purchase the business of Krishnan ltd. On the following terms.
    1. For each of the 10000 shares of Rs.10 each in Krishnan ltd, two shares of raman ltd. Of Rs.10 each will be issued at an agreed value of Rs.12 per share. In addition Rs.4 per share in cash also will be paid.
    2. 8% debentures worth 80000 will be issued to settle the Rs.60000 9% debentures in Krishnan ltd.
    3. 10000 will be paid towards expense of winding up.

Calculate the purchase consideration.

  1. The trial balance of the ABC bank ltd. As on 30.6.2004 shows the following balances.

Interest and discount                                           45,40,600

Rebate on bill discounted (1.7.2003)                  4750

Bills discounted and purchased                          3,37,400

The unexpired discount as on 30.06.2004 is estimated to be 5560. Draft necessary adjusting entries and calculate the amount of interest and discount to be credited to profit and loss account.

  1. Explain cost of control.

 

 

PART – B

ANSWER ANY FIVE QUESTIONS:                                                          (5 X 8=40)

  1. Distinguish between amalgamation, absorption and external reconstruction with suitable examples.
  2. Explain the various schedules to be prepared by a commercial bank.
  3. What are the advantages and disadvantages of double account system?
  4. From the following particulars prepare a profit and loss account of new bank ltd. For the year ended 31.12.2006.

Particulars                                Rs.(000’s)                      Particulars                 Rs.(000’s)

Interest of loans                               260                           interest on cash credits            225

Interest on fixed Deposits                           280                           Rent and taxes                                      20

Debit on bills discounted                   50                           interest on over drafts               56

Commission charged to customers      9                           directors and auditors fees          4

Establishment expenses                     56                           interest on savings account       70

Discount on bill discounted             200                           postage and telegram                  2

Interest on current account                45                           sundry charges                            2

Printing and advertisement                  3

  1. The balance sheets of C ltd and D ltd as at 31.12.2006 were as follows:
LIABILITIES C LTD.(Rs) D LTD.(Rs) ASSETS C LTD.(Rs) D LTD.(Rs)
Sh. Capital (in shares of Rs.10 each) 200000 100000 Sundry assets 132500 138200
General reserve 18000 20000 Good will ——— 20000
Profit and loss a/c 24500 23000 Shares in D ltd at cost 140000 ——-
creditors 30000 15200
272500 158200   272500 158200

In the case of D ltd. Profit for the year ended 31.12.2006 is Rs 12000 and transfer to reserve is Rs. 5000. The holding of C ltd. In D ltd. Is 90% acquired on 30th June 2006. Draft a consolidated balance sheet of C ltd and its subsidiary.

 

 

 

 

  1. From the following balance sheet of Sam ltd. As on 31.3.2004
LIABILITIES Rs ASSETS Rs.
Sh. Capital:

8% pref sh. Of Rs100 each.

375000 Fixed assets 1625000
Equity shares of Rs.10 each 750000 Investments 300000
General reserve 450000 Current assets 250000
7% debentures 350000
Current liabilities 250000
  2175000   2175000
  1. ltd agreed to take over the business of Sam ltd.

Calculate the purchase consideration under net assets method on the basis of the following:

  • R ltd agreed to discharge 7% debentures at a premium of 10% by issuing 9% debentures of R ltd.
  • Fixed assets are to be valued at 10% above book value, the investments at par, current assets at 10% discount and current liabilities at book value.

 

  1. From the following particulars relating to Z insurance co. ltd. Prepare fire revenue account for the year ending 31.12.2004.

Rs.                                                                   Rs.

Claims paid                                               480000              premium received     1200000

Claims outstanding on 1.1.04                   40000               reinsurance prem.pd.  120000

Claims intimated but not accepted

And paid on 31.12.2004                           10000              commission                200000

Claims intimated and accepted

but not paid on 31.12.2004                       60000             commission on

reinsurance ceded       10000

commission on reinsurance accepted        5000                provision for

unexpired risk on

1.1.04                          400000

Expenses of management                                     305000

Bonus in reduction of premium                12000              additional provision

For unexpired risk on

1.1.04                          20000

You are required to provide for additional reserve for unexpired risk at 1% of net premium in addition to the opening balance.

  1. A life insurance co. gets its valuation made once in every two years. Its life assurance fund on 31.3.08 amounted to 63,84,000 before providing Rs.64000 for the shareholders dividend for the year 2007 – 2008. Its actuarial valuation due on 31.3.08 disclosed a net liability of Rs.6080000 under assurance annuity contracts. An interim bonus of Rs 80000 was paid to the policy holders during the two years ending 31.03.08. prepare a statement showing the amount now available as bonus to policy holders.

PART – C

ANSWER ANY TWO QUESTIONS:                                                          (20 X 2=40)

  1. From the following balances of united general insurance company ltd. As on 31.12.08 prepare a) fire revenue account; b) marine revenue account and c) profit and loss account.
Provision for unexpired risk

On 1.1.08 – fire

Marine

 

500000

1640000

Interest, dividend received 28000
Additional reserve on 1.1.08

Fire

 

100000

Difference in exchange(cr) 600
Bad debts – fire

marine

10000

24000

Miscellaneous receipts 10000
Auditors fees 2400 Profit on sale of land 120000
Directors fees 10000 Premium received – fire

Marine

1200000

2160000

Share transfer fees 1600 Expenses of management – fire

Marine

290000

800000

Bad debts recovered 2400 Commission earned on reinsurance

Ceded – fire

Marine

 

60000

120000

Claims paid and outstanding

Fire

Marine

 

380000

760000

Commission paid – fire

Marine

180000

216000

depreciation 70000

Provision for unexpired risk is to be kept at 50% of the premiums received for fire and at 100% for marine departments. The additional reserve in case of fire insurance is to be increased by 5% of the net premiums.

 

  1. The following balance sheets are presented to you:

Balance sheet as on 31.12.2009

LIABILITIES A.Ltd.

Rs.

B.Ltd.

Rs.

ASSETS A.Ltd.

Rs.

B.Ltd.

Rs.

Sh. Capital:

Shares of Rs.50 each

250000 100000 Fixed Assets 175000 75000
General reserve 50000 ——– Stock in trade 45000 20000
Profit and loss account 40000 ——– Debtors 30000 15000
6% debentures ——- 50000 6% debentures in B ltd

Acquired at par

30000 ——-
Trade creditors 37500 22500 Shares in B ltd 1500 @ Rs 40 60000 ——-
Cash at Bank 37500 12500
Profit and Loss account ——– 50000
377500 172500 377500 172500

A ltd. acquired the shares on 1.4.09. The profit and loss account of B ltd showed a debit balance of Rs.75000 on 1.1.09. Trade creditors of B ltd include Rs.10000 for goods supplied by A ltd on which A ltd made a profit of Rs 1000. Half of the goods were still in stock on 31.12.09. Prepare the consolidated balance sheet.

 

  1. From the following particulars of XYZ bank ltd having its own premises, prepare the balance sheet in the prescribed form as on 31.12.2010.
particulars Rs.in 000’s particulars Rs.in 000’s
Authorized capital 4000 Letters of credit issued 500
Subscribed capital 4 lakh shares of Rs.10 each Rs.5 paid 2000 Telegraphic transfers payable 800
investments 7000 Bank drafts payable 1200
Bills discounted (in India) 15000 Short loans 40
Profit and loss(cr) 850 Rebate on bills discounted 10
Endorsement on bills for collection 100 Acceptances for customers 5000
Liability of customers for acceptances 5000 Loans and advances 10000
Money at call on short notice 9000 Cash credits 10000
Cash in hand 2000 overdrafts 1000
Cash with RBI 4000 Bills purchased(payable ouside india) 1000
Reserve 3000 Current and deposit accounts 56000
Cash with SBI 4000 Investment fluctuation fund 100
Bills for collection 100

 

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