- JOSEPH’S COLELGE OF COMMERCE (AUTONOUMOUS)
END SEMESTER EXAMINATION – MARCH/APRIL 2015
B.COM – VI SEMESTER
ACC 606: ACCOUNTS OF OTHER COMPANIES (ACCOUNTS ELECTIVE)
Duration: 3 hours Max. Marks : 100
Section -A
- I) Answer ALL the questions. Each carries 2 marks (10×2=20)
- Write notes on ‘Development Reserve ‘and ‘Contingency Reserve ‘in case of electricity Companies?
- Explain Unexpired Risk Reserve.
- Give two advantages of Double Account System.
- State various departments in which a hotel organization can be divided.
- What is Tariff and dividend Control Reserve?
- The Following Balances are extracted from the books of AB life Insurance Corporation. Life insurance Fund (as on 31.3.2014) – 1600 lakhs Net liabilities as per Valuation – 1200 lakhs Interim Bonus paid – 150 lakhs You are required to show the valuation balance sheet as on 31.3.2014.
- Distinguish between single account system and double account system.
- What do you mean by “Catastrophe Reserve”?
- Distinguish between Endowment Policy and Whole Life Policy.
- State the difference between Resident Guests and Non Resident Guests.
Section – B
- II) Answer any FOUR questions. Each carries 5 marks (4×5=20)
- The Life Insurance Fund of Hindustan Life Insurance Co .Ltd was Rs 34,00,000 on 31st March 2014. Its actuarial valuation on 31st March, 2014 disclosed a net liability of Rs 28,80,000. An interim bonus of Rs 40000 was paid to the policy-holders during the previous two years. It is now proposed to carry forward Rs 1, 10, 000 and to divide the balance between the policy holders and the share holder. Show
(a) The valuation balance sheet
(b) The net profit for the two year period
(c) The distribution of the profits.
- Prepare the Fire Insurance Revenue A/c as per IRDA regulations for the year ended 31st March 2014 from the following details
| Claims paid | 4,90,000 |
| Legal expenses regarding claims | 10,000 |
| Premiums received | 13,00,000 |
| Re-insurance premium paid | 1,00,000 |
| Commission | 3,00,000 |
| Expenses of management | 2,00,000 |
| Provision against unexpired risk on 1st April 2013 | 5,50,000 |
| Claims unpaid on 1st April 2013 | 50,000 |
| Claims unpaid on 31st March 2014 | 80,000 |
- Write a note on night audit and explain a night auditor’s job.
- Write a note on statutory corporations.
15. Hiralal checks into a 5 star hotel on 10th January 2014 at 9 A.M on American Plan @ Rs 300 per day. The hotel levies a service tax @ 12% in addition to the room rent. Find the duration of stay and amount payable by Hiralal if he checks out at:
When the duration of day is ascertained by the hotel on (i) 24 hours or part thereof basis; (ii) fixed check out time of 12 noon basis; and (iii) night spent basis. |
- The following information is extracted from the books of modern Electricity Co Ltd for the year ended 31st March 2014.
| Net profit before charging debenture interest | 67, 50,150 |
| 10% debenture interest paid during the year | 11, 25,000 |
| Capital base arrived at by the company | 3,10,89,000 |
| Reasonable return calculated by the company | 40,68,450 |
You are required to indicate the disposal of surplus of the company.
Section C
III) Answer ANY THREE Questions. Each carries 15 Marks (3X15=45)
- Explain the provisions regarding maintenance of books of account, presentation of annual accounts and audit of Government companies?
- From the following figures relating to the Metro Life Insurance Company Ltd Prepare its Revenue Account for the year ended 31st March 2014 and a Balance Sheet as on that date:
| Particulars | (Rs.In 000s) |
| 2,00,00,000 Shares of Rs 25 each, Rs 10per share paid up | 2,00,000 |
| Claims under policies and outstanding less received on Re-assurance | 45,00,000 |
| Life Assurance fund on 1st April 2013 | 4,80,00,000 |
| Investment fund on 1st April 2013 | 50,00,000 |
| Expenses of Management | 15,00,426 |
| Investments | 5,10,00,000 |
| Freehold and Leasehold Property | 25,00,000 |
| Unpaid Dividends | 51,790 |
| Outstanding premiums (Net) | 6,03,200 |
| Claims admitted or intimated, but not paid | 30,00,000 |
| Outstanding interest | 5,90,000 |
| Surrenders | 2,58,950 |
| Annuities | 30,000 |
| Premiums less Re-assurance | 75,00,000 |
| Consideration for annuities granted | 50,500 |
| Bonus in reduction of premiums | 4,000 |
| Gain on redemption of Debenture (to be carried to investment Reserve Fund) | 20,000 |
| Interests, Dividends and Rents received | 32,00,336 |
| Interest accrued | 3,17,000 |
| Income Tax | 2,80,148 |
| Agents Balances Outstanding | 1,45,904 |
| Furniture and Fittings | 90,500 |
| Loans on the company s policies within their surrender value | 49,00,000 |
| Cash in hand and at Bank | 3,64,000 |
| Stamps in hand | 7,322 |
| Cheques paid into Bank and in course of realisation | 49,000 |
| Cheques issued but not presented for payment | 66,520 |
| Sundry Creditors | 44,874 |
| Premium received in advance | 1,00,000 |
| Commission paid | 1,00,000 |
| Income tax on interest and dividends | 1,20,000 |
| Transfer and other fees | 6,430 |
- Gupta Electricity Company earned a profit of Rs 33,97,000 after paying Rs 1,20,000 @ 6 per cent as debentures interest for the year ended 31 March 2014 .The following further information is supplied to you:
Rs.
| Fixed assets | 7,20,00,000 |
| Depreciation written off | 2,00,00,000 |
| Loan from electricity board | 1,60,00,000 |
| Reserve fund investment at par (4 per cent) | 40,00,000 |
| Contingency reserve investment at par (4 per cent) | 30,00,000 |
| Tariff and dividend control reserve | 4,00,000 |
| Security deposits of customers | 6,00,000 |
| Customers contribution to assets | 2,00,000 |
| Preliminary expenses | 1,60,000 |
| Monthly average of current assets including amount due from customers RS 1000000 | 30,40,000
|
| Development reserve | 10,00,000 |
Show the disposal of profits mentioned above taking bank rate as 9%
20.(a) Holiday Inn, a five star hotel in New Delhi, has 600 rooms in all .Out of which 30 rooms are used for operation purposes and 10 rooms are occupied by departmental heads. On 2nd January, 2014, 400 rooms were occupied by the guests. You are required to compute the room occupancy rate.
(b) The guest staying in the hotel on 31st December, 2013 were 400; Guests checked out on 1st January, 2014 before checkout time 12noon were 100.guest checked in 1st January, 2015 were 150 and guests checked out on 2nd January, 2014 before checkout time 12 noon were 100. You are required to compute the occupancy of rooms for 1st January, 2014.
(c) Hotel Sun and Sand, a three star hotel, in Bombay has 450 lettable rooms. Out of which 300 rooms are single bed rooms and 150 are double bed rooms .On 15th February, 2014, 200 single rooms and 100 double rooms are occupied by the guests. You are required to compute the bed occupancy rate for the day.
(d) A Five star hotel has 350 rooms available for letting out .On a particular day 300 rooms were occupied by 350 guests. Calculate the double occupancy rate
(e) Write a note on fixation of the room rate.
- From the following balances extracted from the books of Perfect General Insurance Company Limited as on 31.3.2014 , you are required to prepare Revenue Accounts in respect of Fire and Marine Insurance Business for the year ended 31.3.2014 and a Profit and Loss Account for the same period
| Directors fees | 80,000 | Interest received | 19,000 |
| Dividend received | 1,00,000 | Fixed Assets(1.4.2013) | 90,000 |
| Provision for taxation | Income Tax paid during the | ||
| ( As on 1.4.2013) | 85,000 | Year | 60,000 |
| Fire | Marine | |
| Outstanding claims on 1.4.2013 | 28,000 | 7,000 |
| Claims Paid | 1,00,000 | 80,000 |
| Reserve for Unexpired Risk on 1.4.2013 | 2,00,000 |
1,40,000 |
| Premiums Received | 4,50,000 | 3,30,000 |
| Agents Commission | 40,000 | 20,000 |
| Expenses of Management | 60,000 | 45,000 |
| Re-Insurance Premium (Dr) | 25,000 | 15,000 |
The following additional points are also to be taken into account
- Depreciation on Assets to be provided at 10% p.a
- Interest accrued on investments Rs 10,000
- Closing provision for taxation on 31.3.2014 to be maintained at Rs 1,24,138
- Claims outstanding on 31.3.2014 were fire insurance Rs 10,000 Marine insurance Rs 15,000
- Premium outstanding on 31.3.2014 were fire insurance Rs 30,000 Marine insurance Rs 20,000
- Reserve for unexpired risk to be maintained at 50% and 100% of net premiums in respect of Fire and Marine insurance respectively
- Expenses of management due on 31.3.2014 were Rs 10,000 for fire insurance and Rs 5,000 in respect of marine insurance.
SECTION – D
- IV) Case Study (15 Marks)
- The Following balances are extracted from the Books of Account of vidyut Electric Supply Company Ltd for the year ended 31st March 2014
DEBIT BALANCES
| License | 9,000 |
| Land (addition during the year Rs 10,000 ) | 2,10,000 |
| Building | 12,18,000 |
| Plant and Machinery | 2,04,000 |
| Transformer sub-station | 83,70,000 |
| Mains-overhead and underground (additions during the year Rs 17,70,000 ) | 2,84,25,000 |
| Meter House Service Connection (addition during the year Rs 2,25,000) | 32,10,000 |
| Furniture and Fixture (in addition during the year Rs 21,000) | 3,30,000 |
| Motor Lorries (addition during the year Rs 50,000) | 3,15,000 |
| Investments of contingency Reserves (in government Securities) | 4,80,000 |
| Purchase of Energy | 62,25,000 |
| Salaries and Wages | 12,00,000 |
| Repairs and Maintenance:
Buildings 22,500 Lorries 7,500 Transformers 90,000 Mains and services 5,10,000 Plant and Machinery 18,000
|
6,48,000 |
| Establishment Expenses | 19,95,000 |
| Rent, Rates and Taxes | 76,500 |
| Conveyance and Travelling | 60,000 |
| Audit fees | 22,500 |
| General expenses | 1,50,000 |
| Electricity Duty | 10,50,000 |
| Directors Fees and Allowences | 25,500 |
| Interest on Fixed Assets | 3,52,500 |
| Interest on consumers security deposits | 1,20,000 |
| Current assets | 33,00,000 |
| Work- in -Progress | 19,20,000 |
| Sundry Debtors | 40,50,000 |
| Cash and Bank Balances | 21,00,000 |
| Loans and Advances | 10,50,000 |
| Total | 6,71,16,000 |
CREDIT BALANCES
| Share Capital:
750000 Equity shares of Rs 10 each 300000 7per cent Preference shares of Rs 10 each |
75,00,000 30,00,000 |
| Reserve for Rebate to Consumers | 2,11,500 |
| Contingency Reserve | 4,80,000 |
| Tariff and Dividend Control Reserve | 2,10,000 |
| Developmental Reserve | 9,18,000 |
| Accumulated Depreciation | 2,40,00,000 |
| Balance of net revenue A/c brought forward from previous year | 22,500 |
| Loan from State GOVERNMENT (secured by charge on fixed assets) | 49,50,000 |
| Loan from state Electricity Board | 5,70,000 |
| Sundry Creditors | 25,74,000 |
| Consumers Security Deposits | 48,00,000 |
| Unclaimed Dividends | 2,25,000 |
| Sale of Energy | 1,74,75,000 |
| Rental of Meters | 1,05,000 |
| Maintenance of Public Lamps | 22,500 |
| Hire on Machinery and Goods | 37,500 |
| Interest on bank A/c | 15,000 |
| Total |
6,71,16,000 |
The following adjustments have to be made:
- Depreciation for the year 17,25,000
- Provision For Taxation 22,80,000
- Transfer to Contingency Reserve 2,25,000
- Transfer to Development Reserve 1,20,000
The amount of reasonable return may be presumed to be Rs 11,94,000
You should prepare Capital Account, Revenue Account, Net Revenue Account and General Balance Sheet of the Vidyut Electric Supply Company Ltd in the prescribed form.