St. Joseph’s College of Commerce (Autonomous)
End Semester Examinations – April 2014
M.Com – IV Semester
FINANCIAL REPORTING AND OPERATIONAL COMPLIANCE
Time: 3 Hrs Max. Marks: 100
Section – A
- Answer any 7 out of 10 questions. Each question carries 5 marks. (7×5=35)
- Match the following & write a brief note on AS-18.
| Accounting Standard No. | Particulars |
| a. Accounting Standard (AS) 6 | Revenue Recognition |
| b. Accounting Standard (AS) 1 | Depreciation Accounting |
| c. Accounting Standard (AS) 18 | Disclosure of Accounting Policies |
| d. Accounting Standard (AS) 26 | Related Party Disclosures |
| e.Accounting Standard (AS) 9 | Intangible Assets |
- Name the Fundamental Accounting Assumptions and briefly explain.
- List the contents of Annual Report and briefly explain.
- When does a dealer required to register under Karnataka Value Added Tax Act, 2003? What is the due date for filing monthly VAT returns for a dealer claiming input tax credit against output tax?
- Match the following & write a brief note on Negative list.
| Sl.No | Column – A | Column – B |
| 1 | Form 100 | Tax on Profession, Trades, Callings and Employment |
| 2 | Negative List | Monthly VAT Return |
| 3 | Maximum Retail Price | Service Tax |
| 4 | Profession Tax | Foreign Exchange Management Act, 1999 |
| 5 | Foreign Direct Investment | Valuation of Excisable Goods |
- Match the following & write a brief note on regulatory conditions for the appointment of Statutory Auditor.
| Sl.No | Column – A | Column – B |
| 1 | eForm 8 | Appointment of Statutory Auditor |
| 2 | eForm 17 | Change or in the designation of Director – Resignation, Retirement and Death |
| 3 | eForm 32 | Filing of yearly Annual Return |
| 4 | eForm 23B | Satisfaction of Charge |
| 5 | eForm 20B | Charge Creation |
- Distinguish between LLP and Company.
- Briefly explain the applicability of Employees’ Provident Funds Act, 1952 and Employee State Insurance Act, 1948 and also provide the contribution to be made by employer and employee under relevant acts.
- Briefly explain the concept of Negative List under Service Tax Law. What is the current rate of service tax notified by Central Government?
- Match the following & write a note on Deferred Tax.
| Sl.No | Column – A | Column – B |
| 1 | Financial Charges | AS – 11 |
| 2 | Deferred Tax | AS – 20 |
| 3 | Foreign Exchange Fluctuation | Borrowing Cost |
| 4 | Lower of cost or net realizable value | Accounting for Taxes on Income |
| 5 | Diluted Earnings Per Share | AS – 2 |
Section – B
- II) Answer any THREE Each question carries 15 marks. (3×15=45)
- Explain the concept of capital and capital maintenance.
- Explain the objectives of financial statements.
- Explain any 7 accounting standards in not more than five sentences.
- What is manufacturing under Central Excise Act, 1944. Briefly explain
- Who are the users of financial statements and explain their information needs?
- Info IT Exports Pvt., Ltd., a company in India are exporters of software development services and during the financial year has invoiced the following amounts in various currencies. Arrive at the Net Foreign Exchange Gain/Loss from the details provided below and also specify the following :
- where will the company reflect the exchange gain or loss in the financial statements.
- Specify what will be the impact on Networth on account of exchange gain or loss.
- Name the accounting standard which you are applying in arriving at the exchange gain or loss.
| Sl.No. | Invoice No. | Date of Invoice | Amount | Exchange rate on the date of Invoice | Exchange rate on the date of realisation |
| 1. | 1001 | 12/05/2012 | USD 15,000 | 53.50 | 54.25 |
| 2. | 1014 | 14/06/2012 | GBP 25,000 | 71.26 | 73.00 |
| 3. | 1036 | 10/03/2013 | EURO 10,000 | 66.30 | 63.11 |
- Compute Basic Earnings per Share (Basic EPS) and Diluted Earnings per Share (Diluted EPS)
Net profit for the current year Rs. 1,00,00,000
Equity Share Capital : 5,00,000 Equity Shares of Rs.10/- each
Share Application Money Pending Allotment – 50,000 equity shares of Rs.10/- each
- In not more than 5 sentences explain the need for Foreign Currency Translation in the books of account.
- Calculate the income tax and deferred tax from the following data:
- Profit of the company before tax – 40,88,605
- Depreciation as per Companies Act, 1956 – Rs.12,63,746/-
iii. Depreciation as per Income Tax Act, 1961 – 13,46,238/-
- Rate of income tax – 30%
- Briefly explain limitation of accounting.
- What is reverse charge mechanism under Service Tax Law. Briefly explain
Section – C
III)Answer the following compulsory question.
(1 x 20= 20)
16.You are required to prepare financial statements under Revised Schedule VI (including Notes forming part of accounts) from the following trial balance of Suhas Company Ltd. for the year ended 31st March, 2013.
Suhas Company Ltd.
Trial Balance as at 31st March, 2013
| Particulars | Debit (Rs.) | Credit (Rs.) |
| Equity Share Capital (Shares of Rs.10 each) Authorised Capital – Rs.10,00,000/- | 1,00,000 | |
| Term Loan | 85,000 | |
| Trade Payables | 18,100 | |
| Sales of Goods | 4,10,900 | |
| Opening Stock of Goods | 78,000 | |
| Profit & Loss appropriation | 16,000 | |
| Furniture & Fixtures | 50,000 | |
| Plant and Machinery | 1,25,000 | |
| Advertisement | 2,000 | |
| Purchase of Goods | 2,31,900 | |
| Rentals | 2,500 | |
| Cash | 800 | |
| Bank Balance | 1500 | |
| Interest on Bank Term Loan | 5,500 | |
| Salaries and Wages | 90,000 | |
| Debtors – Trade Receivable | 28,700 | |
| Direct Expenses | 2,300 | |
| Consumables | 8,400 | |
| Travelling and Conveyance | 3,400 | |
| Total | 6,30,000 | 6,30,000 |
Additional Information :
– Closing stock of goods as on 31st March, 2013 – Rs. 82,300
– Rate of Depreciation
| Particulars | As per Companies Act | As per Income Tax Act |
| Furniture & Fixtures | 20% | 10% |
| Plant and Machinery | 20% | 15% |
- 10% of debtors are doubtful and management decided to make provision in the books.
- Rate of Income tax – 30%
- 50% of Trade Payables are payable after one year from the end of 31st March 2013.
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