st. joseph’s college of commerce (autonomous) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
END SEMESTER EXAMINATION – MARCH/APRIL 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
B.COM – II SEMESTER | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
C1 12 201: ADVANCED ACCOUNTING – I | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Duration: 3 Hours Max. Marks: 100 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECTION – A | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
I) | Answer ALL the questions. Each carries 2 marks. (10×2=20) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. | Find out the Admissible Claim from the following:
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2. | If the Fair Value of an Equity Share is Rs. 125 and its Intrinsic Value is Rs. 175, find its Yield Value. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
3. | What are Trade Receivables? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
4. | Under what heading and sub-headings will you show the following items in the final a/c’s of a company?
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5. | What is Recoupment of Shortworkings? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
6. | What Entry do you pass in the books of Head Office, when Mysore Branch receives Rs. 5,000 dividend on investments on behalf of the Head Office? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
7. | Mention any two objectives of Branch Accounting. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
8. | The face value of the Equity Shares of a company is Rs. 20 and the current market price is Rs. 27. The company issues right shares at the rate of three equity shares for every 5 existing equity shares held, the right shares being priced at Rs. 23. Calculate the value of right. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
9. | Mention the methods of valuation of Non-purchased Goodwill. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
10. | Explain Inter-branch transactions? | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
SECTION – B |
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II) | Answer any FOUR questions. Each carries 5 marks. (4×5=20) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
11. | You are required to calculate value of each Equity Share based on Discounted Cash Flow Method from the information given below:
a)Free Cash Flow Estimates:
b)After tax Cost of Capital is 17.5% c)Present Value factor at 17.5%
d) No. of Equity Shares = 50,000. |
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12. | A fire occurred on 25th April, 2014 in the premises of a company. From the following particulars ascertain the amount of claim to be lodged in case of the loss of stock which was insured.
The Gross Profit Ratio is 15%. The stock salvaged was estimated at Rs. 57,500.
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13. | The books of Shiva Ltd. showed an amount of Rs. 4,00,000 to the credit of Profit and Loss Account on 31st March, 2014 out of which directors decided:
a) To place Rs. 60,000 to General Reserve and Rs. 40,000 to Debenture Redemption Fund. b) The directors further recommended placing Rs. 25,000 to a Special Reserve Fund (to provide for contingencies). c) To pay bonus of 4% of the profits to employees. d) The payment of annual dividend on Rs. 6,00,000 8% Cumulative Preference Shares and a dividend at 15% on Equity Share Capital of Rs. 10,00,000 was also recommended by the Board of Directors.
Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2014.
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14. | Write the format for the Statement of Profit and Loss as required by the Companies Act., 2013.
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15. | Shri. Chakravarthy of Kolkata has a branch in Mumbai. Goods are supplied to the branch at cost. The branch sells goods for cash and on credit. The expenses of the branch are paid from Kolkata and the branch keeps a sales journal and the debtors’ ledger only. From the following information supplied by the branch, prepare the Branch Account in the books of H.O.
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16. |
Following are the particulars of Mr. Mohan:-
a) Profits after tax earned in 2012=Rs. 82,500, 2013= Rs. 79,200 and 2014=Rs. 85,800. b) Profits of 2013 is reduced by Rs.8,250 due to stock destroyed by fire and profits of 2012 include a non-recurring income of Rs.4950. c) Profits of 2014 include Rs.3,300 being income on investment. d) The stock is not insured and it is thought expedient (wise) to insure the stock. Insurance premium= Rs. 825 per annum. e) Fair remuneration to the proprietor not taken into calculation of profits is Rs.16,500 per annum. Calculate Goodwill on the basis of 2 years purchase of the average profits of the last 3 years. Tax Rate = 50%.
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SECTION – C | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
III) | Answer any THREE questions. Each carries 15 marks. (3×15=45) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
17. | From the following details, calculate the claim for Loss of profit.
a) Date of Fire: 1St September 2014. b) Indemnity Period: 6 months. c) Period of Disruption: 1st September 2014 to 1st February 2015. d) Sum Insured: Rs. 3,70,260. e) Sales were Rs. 20,40,000 for the preceding financial year ended on 31st March 2014. f) Net Profit for preceding Financial Year Rs. 1,22,400 plus Insured Standing Charges Rs. 2,44,800. g) Rate of Gross Profit = 18%. h) Uninsured Standing Charges = Rs. 20,400. i) Turnover during the disruption period = Rs. 2,29,500. j) Annual Turnover for 12 months immediately preceding the date of fire Rs. 22,44,000. k) Standard Turnover, i.e., for corresponding months (1st September 2013 to 1st February 2014) in the year preceding the date of fire Rs. 7,65,000. l) Increase in Cost of working capital Rs. 40,800 with saving of Insured Standing charges Rs. 15,300 during disruption period. m) Reduced Turnover avoided through increase in Working Capital cost Rs. 1,02,000. n) Special Clause stipulated – a) Increase in rate of GP= 2% and b) Increase in Standard and Annual Turnover = 10%. |
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18. | Amar Traders obtained a lease of a coal mine on 1st April 2009 on the following terms:
a) Royalty: Re.1 per tonne. b) Minimum Rent Rs. 12,000 per annum. c) Recoupment of shortworkings of each year during the next 3 years subject to a maximum of Rs. 2,500 per annum. d) In the event of strike, the minimum rent would be taken pro-rata on the basis of actual working days, but in the event of lockout, the lessee would enjoy a concession in respect of minimum rent for 50% of the period of lockout. e) Working for the first 5 years is as follows:
Prepare in the books of Amar Traders:
a) The Analytical Table b) Royalty A/c c) Shortworkings A/c d) Landlord’s A/c
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19. | G Ltd. proposed to purchase business carried on by S Ltd. Goodwill for this purpose is agreed to be valued at 3 years purchase of the weighted average profits of the last 4 years.
On the scrutiny of the A/c’s the following matters are revealed:
a. On 1.1.2013 a major repair was made in respect of plant incurring Rs.30,000 which was charged to revenue. The said sum is agreed to be capitalized, subject to adjustment of depreciation at 10% p.a on Reducing Balance Method. b. The closing stock of the year 2012 was overvalued by Rs.12,000. c. To cover management cost, an annual charge of Rs.24,000 should be made for the purpose of goodwill calculation. d. Compute the value of Goodwill. Tax Rate = 40%. |
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20. | The following is the balance sheet of X Ltd as on 31-3-2014.
The net profits of the company after deducting all working charges and providing depreciation and taxation are as under:
On 31-03-2014, Land and Building were valued at Rs.2,50,000 and Plant and Machinery at Rs.1,50,000.
In view of the nature of the business, it is considered that 10% is a reasonable return on average capital employed. For the purpose of valuation of shares, Goodwill is calculated at 5 years purchase of super profits based on the average profits of the last 5 years.
Additional depreciation of Land & Building and Machinery may be ignored.
Calculate the intrinsic value of shares – a) Ex-dividend and
b) Cum-dividend.
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21. | A Delhi merchant has a Branch at Chennai to which he charges out the goods at cost plus 25%. The Chennai Branch keeps its own sales ledger and transmits all cash received to the Head Office every day. All expenses are paid from the Head Office. The transactions for the Branch were as follows:
Prepare the Branch Trading and Profit and Loss Account and Branch Account for the year 31.03.2014. |
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SECTION – D | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
IV) | Case Study (1×15=15) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
22. | Vishnu and Co. Ltd has two branches, one in Mysore and the other in Chennai. The Director of Vishnu and Co. Ltd., appointed YOU as an accountant of the Company.
a) You are asked to Pass Journal Entries in the Books of Vishnu and Co, Ltd., for the following transactions:
b) You have also been provided with the following Balance Sheet of the Company. You are required to redraft it as per Schedule III of the Companies Act, 2013.
Vishnu and Co. Ltd. Balance Sheet as at 31.03.2014
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