REG NO:

ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – MARCH /APRIL 2016

B.Com – VI Semester

ACC 606: ACCOUNTS OF OTHER COMPANIES(ELECTIVE P-IV-ACCOUNTS)

Duration: 3 Hours Max. Marks: 100

SECTION – A

Answer ALL the questions. Each carries 2 marks. (10×2=20)

The life assurance fund of a company stood at Rs 5, 25,000 on 31/3/2015 and the valuation of its net liability in respect of policies on that date revealed a figure of Rs 4, 86,000.How much would the policy holders stand to get by way of bonus?

Distinguish between ‘cash bonus’ and ‘reversionary bonus’.

State the purpose of creating reserve for unexpired risk. State its accounting treatment?

Differentiate between annuities and consideration for annuities granted?

Calculate rent to be charged per day per room from the following information for a three Star Hotel at Delhi, if occupancy rate is a) 100% b) 80%.

a) Number of rooms available for occupancy = 50

b) Estimated total cost for April, 2008 = Rs. 12,00,000

c) Return expected = 50% on cost.

Explain the plans available to classify resident guests of a hotel.

What do you mean by a ‘statutory corporation’? How does it differ from a joint stock company?

In the context of accounts of electricity companies, what is ‘reasonable return’?

What is meant by ‘night audit’? Explain the job of a night auditor.

10.

What is double account system? State the special features of Double account system.

SECTION – B

II)

Answer any FOUR questions. Each carries 5 marks. (4×5=20)

11.

Calculate the net claim to be shown in Revenue Account of Insurance Company;

Claims paid during the year ended 31-3-2015	5,60,000
Claims outstanding on 1-4-2014	52,000
Claims outstanding on 31-3-2015	92,000
Claims covered under reinsurance	25,000

12.

The Life Fund of a Life Insurance Company on 31.03.2015 showed a balance of Rs. 54,00,000. However, the following items were not taken into account while preparing the Revenue A/c for 2014-15. Ascertain the correct life fund balance.

a) Interest and dividends accrued on investments Rs. 20,000

b) Income Tax deducted at source on the above Rs. 6,000

c) Reinsurance claims recoverable Rs. 7,000

d) Commission due on reinsurance premium paid Rs. 10,000

e) Bonus in reduction of premiums Rs. 3,000

13.

The life fund of a life Assurance Company was Rs.86,48,000 as on 31-3-2015. The interim bonus paid during the inter-valuation period was Rs.148000. The periodical Actuarial valuation determined the net liability at Rs. 74,25,000. Surplus brought from the previous valuation was Rs.8,50,000. The directors of the company proposed to carry forward Rs.9,31,000 and to divide the balance between the shareholders and the policy holders in the ratio of 1:10.

Show a) The valuation balance sheet b) The net profit for the valuation period and c) The distribution of the surplus.

14.

Following balances relate to an electricity company and pertain to its accounts for the year ended 31^st March, 2015:

Particulars	Rs. in Lakhs
Share capital	100
Reserve fund (invested in 5% Government Securities at par)	60
Contingencies Reserve –( invested in 6% State Government loans)	20
Loan from State Electricity Board	30
11% Debentures	8
Development Reserve	10
Fixed Assets	200
Depreciation Reserve on fixed assets	80
Consumers’ Deposits	75
Amounts contributed by consumers towards fixed assets	2
Intangible assets	5
Tariffs and Divided control reserve	6
Current assets – Monthly average	20

The company earned a post tax (clear) profit of Rs.9 lakhs. Calculate Capital base under the provisions of Electricity Act.

15.

A five star hotel in Madras has 320 lettable rooms on a particular day. 240 rooms are occupied by 300 guests. Calculate the double occupancy rate.

16.

Define the duties and responsibilities of Comptroller & Auditor General of India.

SECTION – C

III)

Answer any THREE questions. Each carries 15 marks. (3×15=45)

17.

From the following balances extracted from the books of the LIC as at 31.03.2015, Prepare a Revenue A/c for the year ending 31.03.2015 in the prescribed form.

Claims by death	3,30,000	Life Assurance Fund (1.4.2014)	63,31,000
Claims by maturity	2,15,000	Premiums	20,65,000
Salaries	44,200	Bonus in reduction of premiums	1,000
Travelling Exp	1,200	Income Tax on Interest & Dividends	5,700
Directors’ fees	8,700	Agents & Canvasser’s allowance	26,500
Auditor’s Fees	1,000	Printing & Stationery	13,900
Medical fees	52,000	Postage & Telegrams	14,300
Commission	2,18,000	Receipt from sale of Stamps	2,300
Rent	2,800	Reinsurance premiums	40,950
Law Charges	200	Interest & Dividend (Gross)	2,72,000
Advertising	4,300	Policy Renewal Fees	9,600
Bank Charges	1,500	Assignment Fees	540
General Charges	2,000	Endowment Fees	690
Surrenders	47,500	Transfer Fees	1,400

18.

From the following Trial Balance of Bharatiya Hotel Ltd , prepare Profit & Loss account for the year ended 31/12/2015 and balance sheet as on that date:

	Debit (Rs)	Credit(Rs)
Hotel buildings	37,400
Vehicles	2280
Furniture & fixtures	3520
Glass, cutlery- 1/1/2015	2000
Glass, cutlery purchased during the year	1000
Printing & stationery	225
Hire of Hall for seminars		3670
Room rent		18850
Entertainment cost	345
Billiard room receipt		3845
Billiard board	10400
Billiard room expenses	2135
Profit on sale of beer, wine, cigars etc		1200
Arrears of room rent 1/1/2015	1125
Honorarium	1500
Sale of tickets for moonlight dinner		1600
Moonlight dinner expenses	1875
Salaries to staff	2700
Audit fee	600
Income from beauty parlor		8500
Repairing, cleaning and washing	350
Newspapers and magazines	180	95
Interest on bank deposits		25
Bank charges	20
Income from laundry		225
General expenses	2995
Stock of wine, beer, cigars, etc on 31/12/2015	300
Sundry creditors		3135
Cash in hand	1400
Cash at bank	1735
Share capital		32940
	74,085	74,085

Other information:

a)Stock of stationery & printing 0n 31/12/2015- Rs 35

b) Out of the total room rent, Rs 1125 represented arrears collected and Rs 760 received in advance.

c) An amount of Rs 500 was outstanding on account of room rent.

d) Unpaid salary amounted to Rs 200

e) Depreciation to be provided as under:

i) Vehicles 10%

ii) Furniture & fixtures 15%

iii) Hotel buildings 5%

19.

The following balances are extracted from the books of City Light Supply Corporation as on 31-3-2015:

	Rs.	Rs.
Equity shares		1,64,700
Debentures		60,000
Sundry creditors on open accounts		300
Depreciation fund		75,000
Capital Expenditure on 31-3-2014	2,85,000
Capital Expenditure during 2014-15	18,300
Sundry Debtors for current supplied	12,000
Other debtors	150
Stores in hand	1,500
Cash in hand	1,500
Cost of Generation of Electricity	9,000
Cost of Distribution of Electricity	1,500
Rent, Rates and Taxes	1,500
Management expenses	3,600
Depreciation	6,000
Interest on debentures	3,000
Interim dividend	6,000
Sale of current		39,000
Meter rent		1,500
Balance of Net Revenue Account as on 1-4-2014		8,550
	3,49,050	3,49,050

Prepare a) Capital account b) Revenue account c) Net Revenue account and

d) General balance sheet from the above Trial Balance.

20.

Define a Government company. Explain briefly the various provisions of sections 209,210 & 211 of Company’s Act, applicable to Government Company.

21.

a) Following information is extracted from the books of Modern Electricity Co for the year ended 31/3/2015:

Net profit before charging debenture interest – Rs 67, 50,150

10% debentures interest paid during the year – Rs 11, 25,000

Capital base arrived at by the company – Rs 3, 10, 89,000

Reasonable return calculated by the company – Rs 40, 68,450

You are required to show the disposal of surplus of the company.

a) b) Mr. Ganpath Checks into a five star hotel on 10^th Jan 2016 at 9 a.m. on American plan @ Rs. 300 per day. The hotel also levies a service tax @ 12% in addition to the room rent. Find the duration of stay and amount payable by Mr. Ganpath if he checks out at:

6p.m. on 10^th Jan
8a.m. on 11^th Jan
4p.m. on 11^th Jan
11.a.m. on 12^th Jan

When the duration of day is ascertained by the hotel on

24 hours or part thereof basis
Fixed check out time of 12 noon basis

SECTION – D

IV)

Case Study – Compulsory question. (1×15=15)

22.

Zaldi pay Insurance Company Limited has furnished the following information for preparation of revenue account for fire insurance business for the year ended 31.3.2015 and its profit and loss a/c for the year.

Particulars	Rs. (in ‘000)	Particulars	Rs.( in ‘000)
Claims admitted but not paid	42,376	Bad debts.	2,500
Commission paid	50,000	Claims paid	15,000
Commission on re-insurance received	12,000	P&L Appropriation A/c	10,000
Share transfer fees	5,000	Premium received	5,52,000
Expenses of management	78,000	Less : re-insurance claims outstanding as on 1.4.2014	27,000
Reserve for unexpired risk as on 1.4.2014	2,30,000	Dividend on share capital	18,500
Additional reserve on 1.4.2014	40,000

The following further information has also to be considered:

a. Premium outstanding at the end of the year Rs. 40,000.

b. Additional reserve at 10% of net premium to be maintained.

c. It is the policy of the company to maintain 50% of premium towards reserves for unexpired risks.

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