Loyola College B.Com April 2007 Adv. Corporate Accounts Question Paper PDF Download

October 20, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

TH 25

B.Com. DEGREE EXAMINATION –COMMERCE

SIXTH SEMESTER – APRIL 2007

CO 6606 – ADV. CORPORATE ACCOUNTS

Date & Time: 20/04/2007 / 9:00 – 12:00 Dept. No. Max. : 100 Marks

_____________________________________________________________________________________

SECTION: A

Answer any ten only: 10 x 2 = 20

What is Rebate on Bills discounted?

On 1^st October 2005, Bank discounted a bill if Rs.20, 000 @ 12% p.a and the bill has on that date exactly four months to run considering the days of grace also. Accounts are closed on 31^st Journalize transaction.

State True or False:

The Percentage of Profit to be transferred to statutory reserve by the banking company is 20%.
Letter of Credit and Endorsement are shown in the bank accounts under the head of Contingent Liabilities.

What is Re insurance?

From the following particulars calculate the premiums earned to be derived in schedule 1 of a life insurance company.

Premium less reinsurance Rs.1, 61,500, Accrued Premium Rs.5, 000 and Bonus in reduction of premium not yet adjusted Rs.5, 000.

Write short note on: Cost of Control.

Stock of Rs.3, 20,000 held by H Ltd consists of Rs.1, 20,000 goods purchased from S Ltd who has charged Profit on Sale of 20%. H Ltd acquired 80% of shares of S Ltd. Calculate the amount of unrealized profit included in stock.

Mention any two characteristic features of double account system.

Compute the amount to be charged to Revenue A/C from the information given below:

Original cost of an asset Rs.3, 00,000. Present cost of replacement Rs.3, 90,000. Amount spent for replacement Rs.4, 70,000.

Write a Note on “Purchase Consideration”.

SECTION – B

Answer Any Five Only. 5 x 8 = 40

Write short note on: a) reversionary bonus; b) Actuarial valuation; c) Endowment Policy; d) Bonus utilized in reduction of premium.

Give the “proforma” of schedule 9 of balance sheet of the bank with imaginary figures.

Distinguish between Merger method and Purchase method of Accounting for amalgamation.

The Trial Balance of the Neena Bank Ltd., As on 30^th June 2004 shows the following balances:

Interest and discount 45,40,600

Rebate on bills discounted (1.7.2003) 4,750

Bills discounted and Purchased 3,37,400

The unexpired discount as on 30.6.04 is estimated to be Rs.5,560. Draft necessary adjusting entries and calculate the amount of interest and discount to be credited to Profit and Loss Account.

The life assurance fund of a company on 31.3.2006 was Rs.29, 00,000. Its net liability on that date was estimated to be Rs.19, 00,000 by the company’s actuary. The investments held by the company amounted to Rs.1, 60,00,000 against which the investment reserve stood at Rs.2, 50,000. The investments have to be written down by Rs.3, 50.000.

The company declared a reversionary bonus of Rs.20 per Rs.1000 with the option to policyholders of bonus in cash at the rate of Rs.8 per Rs.1000. Total value of policies in force was Rs. 8 crores. ¼ of the policyholders in value decided to receive the bonus in cash. The company estimated that its liability for income tax would be Rs.1, 60,000.

Draft journal entries to record the above.

City Electricity Ltd. earned a profit o fRs.8, 45,000 during the year ended 31^st March 2005 after debenture interest @ 7 ½ % on Rs.2, 50,000. With the help of the figures given below, show the disposal of profits:

Original Cost of fixed Assets 1,00,00,000

Formation and other expenses 5,00,000

Monthly average of current assts (net) 25,00,000

Reserve Fund (represented by 4% Govt. Securities) 10,00,000

Contingencies Reserve Fund Investments 2,50,000

Loan from Electricity Board 15,00,000

Total depreciation written off to date 20,00,000

Tariff and Dividend Control Reserve 50,000

Security deposits received from customers 2,00,000

Assume Bank Rate to be 6%

The Mangalore Municipal Corporation replaces part of its existing water mains with larger mains at the cost of Rs.75, 00,000. The original cost of laying the old mains was Rs.15, 00,000 and the present cost of laying those mains would be three times the original cost. Rs.1, 25,000 was realized by the sale of old materials and old materials of Rs.3, 75,000 were used in the replacement and included in the cost given above.

Give the journal entries to record the above and show the allocation of expenses between revenue and capital along with replacement account.

Balance sheet of H.Ltd, and S.Ltd as on 31.12.2000 given below:

Liabilities HLtd. S.Ltd. Assets H.Ltd. S.Ltd.

Share Capital 10,000 5,000 sundry assets 17,000 10,000

(Rs.1 each)

General Reserve 5,000 ——— 4000 shares in

S.Ltd 5000

Creditors 3,000 3,200

P&L A/C 4,000 1,800

22,000 10,000 22,000 10,000

H.Ltd. purchased shares in S.Ltd. On 30^th June, 2000. On 1^st January 2000 the balance sheet of S.LTd. showed loss of Rs.3, 000 which was written off out of the profits earned during 2000.Profits are assumed to accrue evenly throughout the year. Prepare consolidated Balance sheet.

SECTION – C

Answer any two only. 2 x 20 = 40

The following are the balance sheets of A.Ltd., and B.Ltd., as on 31-3-2005

Liabilites A.Ltd B.Ltd. Assets A.Ltd. B.LTd.

Rs. Rs. Rs. Rs.

Share Capital 10,00,000 2,50,000 Land & Building 7,50,000 1,00,000

(Rs.100 each) Investments 1,25,000 ———

P&L A/C 7,50,000 1,25,000 Current Assets 16,25,000 3,50,000

Current

Liabilities 7,50,000 75,000

25,00,000 4,50,000 25,00,000 4,50,000

A Ltd has agreed to absorb B Ltd. On the following terms: A) It is assessed that Net assets of B Ltd may be taken at RTs.3, 62,500, which is to be satisfied by issue of fully paid shares of Rs.100 each by B Ltd at par. B) A.Ltd’s investments include 20% of the shares in B Ltd. At the cost of Rs.60, 000.

Close the books of BLTd and give journal entries and Balance sheet in the books

of A.Ltd.

From the following figures taken from the books of Money Bank Ltd., prepare profit and loss account and balance sheet as on 31.12.2004.

Debit Balances ( Rs.in ‘000) Credit Balances ( Rs.in ‘000)

Reserve fund investment 350 Share Capital 500

Money at call&short notice 450 Reserve Fund 350

Investments 250 Fixed deposits 950

Interest accrued and paid 200 Savings bank deposits 3000

Rent 20 Current deposits 8000

Salaries 69 Profit &Loss A/c1.1.2004 200

Directors fees 6 Bank draft 310

P.F contribution 5 Unclaimed dividends 20

General Expenses 10 Travelers Cheques 500

Premises 1200 Borrowed from banks 800

Cash 150 Interest and Discounts 700

Stock of stationery 10 Commission 50

Cash with RBI 1400 Branch adjustments 340

Balance with other banks 1600

Owing by foreign-

-Correspondent 100

Bills discounted 600

Loans 3000

Cash Credits and o/d 4000

Dividend 50

——— — ———

15,720 15,720

———– ———

Adjustments:

Rebate on bills discounted for unexpired term isRs.5000

A Provision for doubtful debts amounting to Rs.30, 000 is required

Create provision for taxation to the extent of Rs. 1,00,000

Charge 5% depreciation on premises on original cost.

Traveler’s Cheques paid amounted to Rs.20, 000.

Following are the Balance Sheets of HLtd. and its subsidiary SLtd. as on31.3.05

Liabilities H. Ltd. S. Ltd. Assets H. Ltd S Ltd

Rs. Rs. Rs. Rs.

Share Capital 10, 00,000 4, 00,000 Fixed Assets 8, 00,000 5,00,000

(Rs.100 each)

General Reserve 3,20,000 1,20,000 Stock 2, 00,000 1,80,000

P&L A/C 2,80,000 1,80,000 Debtors 80,000 1,50,000

Creditors 1,60,000 1,80,000 Investments:

3200 shares in

S.Ltd at cost 6, 00,000 ——–

Bank 80,000 50,000

17,60,000 8.80,000 17,60,000 8,80,000

____________________________________________________________________________________________
H.Ltd. acquired the shares in S.Ltd on 1^st Oct.2004. The Profit and loss account of S.Ltd. on 1- 4 – 2004 showed a balance of Rs.1, 40, 000 out of which a dividend of 20% was paid for the year 2003-2004 in the month of Oct 2004. H.Ltd credited the dividend to its Profit and Loss account. Sundry creditors of S.Ltd includes Rs.30, 000 for goods supplied by H.Ltd. the closing stock of S.Ltd includes goods worth Rs.12, 000 which were supplied by H.Ltd. at a profit of 25% on cost. Prepare Consolidated Balance Sheet.

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Loyola College B.Com April 2008 Adv. Corporate Accounts Question Paper PDF Download

October 20, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

RO 33

SIXTH SEMESTER – APRIL 2008

CO 6606 – ADV. CORPORATE ACCOUNTS

Date : 23/04/2008 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

SECTION A

Answer All questions 10 x 2 = 20

What do you mean by money at call and short notice?
What is meant by bonus in reduction of premium?
What do you understand by ‘pooling of interest’?
Distinguish between double accounting and single accounting system.
Write short note on net payment method of purchase consideration.
From the following , you are required to calculate the amount of claims to be shown

in the revenue account for year ending 31.12.2005.

Claims paid in 2005 Rs. 3,06,000; Claim on account of re-insurance was Rs. 75,000;

Claim outstanding for 2004 Rs. 45,000;Claims outstanding for the year 2005

Rs. 36,000.

Under which schedule of the Bank will the following items appear in the final

statement? a) Staff welfare expenses; b) Interest paid on fixed deposit; c) Interest on

balance deposited with RBI.

While closing the books of a bank on 31^st December 2003, you find in the loan

ledger as unsecured balance of Rs. 2 lakhs in the account of a merchant whose

financial condition is reported to you as bad. Interest on the same account amounted

to Rs. 20,000 during the year. During the year 2004, the bank accepted 75 paise in the

rupee on account of the debt upto 31^st December 2003. Find out the amount of bad

debts.

Calculate the amount of unrealized profit included in stock from the following

information.

Closing stock of Rs. 6,40,000 held by ‘A’ Ltd. consist of Rs. 2,40,000 goods

purchased from “B” Ltd. who charged 20% profit on sales. “A” Ltd. is the

holding company of “B” Ltd. with 80% share holding.

10.The revenue account of life insurance company shows the life assurance fund on 31^st

March, 2002, at Rs. 62,21,310 before taking into account the following items:

(i) Claims covered under re-insurance Rs. 12,000 (ii) Bonus utilized in reduction of

life insurance premium Rs. 4,500 (iii) Interest accrued on securities Rs. 8,260

What is the life assurance fund after taking into account the above omissions?

SECTION B

Answer any FIVE only. 5 x 8=40

Write short notes on (a) valuation balance sheet, (b) rebate on bill discounted,

Give the format of Profit & Loss account prescribed in Banking Regulation Act.

Bright Electricity Ltd. earned a profit of RS. 26,95,000 for the year ended

31^st March 2002 after debenture interest at 14% on Rs. 5,00,000. Calculate

the reasonable return after taking into consideration the following facts also:

Fixed assets (original cost) 2,00,00,000

Formation and other expenses 10,00,000

Monthly average of current assets(net) 50,00,000

Reserve fund(represented by 8% Government securities) 20,00,000

Contingencies reserve investments 5,00,000

Loan from Electricity Board 30,00,000

Total depreciation on fixed assets, written off to date 40,00,000

Tariffs and dividends control reserve 1,00,000

Security deposits received from customers 4,00,000

Assume the bank rate to be 10%

X Ltd. agreed to acquire the business of Y Ltd. as on 31.12.1999. The summary of

the Balance Sheet of Y Ltd. on that date was as follows:-

Rs. Rs.

Equity Shares of Rs. 10 cash 6,00,000 Goodwill 1,00,000

General Reserve 1,70,000 Land & Bldg 6,40,000

Profit & Loss A/c. 1,10,000 Stock 1,68,000

6% Debentures 1,00,000 Debtors 36,000

Creditors 20,000 Cash 56,000

————- ————

10,00,000 10,00,000

The consideration payable to X Ltd. was agreed as follows:

a cash payment of Rs. 2.50 for every share in Y Ltd.
Issue of 9000 equity shares of Rs. 10/- fully paid in X Ltd. having a agreed value of Rs. 15 per share.
Issue of such an amount of fully paid 5% Debentures of X Ltd. at 96% as is sufficient to discharge 6% debentures of Y Ltd. at a premium of 20%

Assets are revalued by X Ltd. as follows:

Land & Building Rs. 12,00,000

Stock Rs. 1,42,000

Debtors at book value less 5% for doubtful debtors

Prepare the realisation account in the books of Y Ltd.

Life insurance gets its valuation made once in every two years. It’s life assurance

fund on 31.12.96 stood at Rs. 55,55,000 before providing for Rs. 55,000, being

shareholders dividend for 1996. Its acturial valuation on 31.12.96 disclosed a net

liability of Rs. 35,00,000. An interim bonus of Rs. 1,00,000 was paid to the policy

holders during the previous two years. You are required to show (a) Valuation Balance Sheet (b)Net

Profit for the period and (c) The distribution of the surplus.

The following is an extract from Trial balance of a Bank as on 31.3.2005.

Debit

Rs.

Credit

Rs.

Bill discounted

Rebate on Bill discounted 1.04.04

Discounted Received

50,00,000

20,057

1,50,000

Date

Bill amount (Rs.)

Period of Bill

Rate of Discount p.a

02.01.05

15.02.05

03.03.05

1,00,000

40,000

30,000

90 days

60 days

30 days

12%

11%

Calculate the amount of unexpired discount and pass the necessary adjusting journal

entries from the above information.

From the following particulars prepare the Fire Revenue Account for 1998.

Claims paid Rs. 2,35,000

Legal expenses regarding claims 5,000

Premium received 6,00,000

Re insurance premium 60,000

Commission 1,00,000

Expenses of management 1,50,000

Provision against unexpired risk on 1.1.98 2,60,000

Claims unpaid on 1.1.98 20,000

Claims unpaid on 31.12.98 35,000

On 31^st March 2006, the Balance Sheet of Y Ltd. Stood as follows:

Liabilities Assets

Share capital 60,000 equity shares Machinery Rs. 5,50,000

of Rs. 10 each fully paid Rs. 6,00,000 Furniture 1,35,200

Capital Reserve 13,000 Stock 3,15,800

Foreign Project Reserve 9,700 Debtors 1,29,300

General Reserve 75,350 Cash at Bank 74,360

P & L Account 24,130

3,000 11% Debentures 3,00,000

Creditors 1,82,480

—————— —————–

12,04,660 12,04,660

On this date, Y Ltd. was absorbed by X Ltd. The scheme of absorption provided that share holders of Y Ltd. would get 110 shares of X Ltd. of Rs. 100 each for every 100 shares held in Y Ltd. and 3,000 11% debentures of Y Ltd. would be converted into equal number of 12% debentures of X Ltd. of Rs. 100 each. You are required to pass journal entries in the books of X Ltd. assuming that the absorption is in the nature of merger.

SECTION C (2 x 20 = 40)

Answer any Two only

From the following Trial Balance of Chennai Bank Ltd., prepare the final accounts

for the year ending 31.12.2002.

Money at call Rs. 8,00,000 Share Capital Rs. 20,00,000

Cash in hand & RBI 6,50,000 Reserve Fund 6,00,000

Investments 18,50,000 Deposits 25,00,000

Loans 15,00,000 Short loans 5,00,000

Cash Credits 5,00,000 Interest & discount 8,00,000

Premises 5,80,000 Commission 1,70,000

Furniture 1,20,000 Locker rent 60,000

Interest paid 3,00,000 P/L(1.1.2002) 20,000

Salaries 2,15,000

Non Banking assets 80,000

Audit fees 30,000

Other expenses 25,000

—————- ————-

66,50,000 66,50,000

a) Provide Rs. 20,000/- for doubtful debts and Rs. 40,000/- for taxes.
b) Provide Rs. 10,000/- for rebate on bills discounted.
c) Acceptances on behalf of the customers accounted to Rs. 4,00,000/-
d) Depreciate furniture 10% p.a.
e) Directors propose 5% dividend.

Following are the Balance sheets of A Ltd. and B Ltd. as on 31.03.2002.

A Ltd.

Particulars

Rs.

Particulars

Rs.

Share Capital

40,000 Equity shares of Rs. 100 each

General Reserve

Current Liabilities

40,00,000

30,00,000

1,00,00,000

Fixed Assets

Investments

Current assets

30,00,000

5,00,000

65,00,000

__________

1,00,00,000

B Ltd.

Particulars

Rs.

Particulars

Rs.

Share Capital

20,000Equity shares of Rs. 50 each

General Reserve

Current Liabilities

Provision for tax

Proposed dividend

10,00,000

5,00,000

1,00,000

18,00,000

Goodwill

Fixed assets

Current assets

50,000

3,50,000

14,00,000

__________

18,00,000

B Ltd. is to be absorbed by A Ltd. on the following terms:

(i) B Ltd. declares a dividend of 10% before absorption for the payment of

Which it is to retain sufficient amount of cash.

(ii) The net worth of B Ltd. is valued at Rs. 14,50,000

(iii) The purchase consideration is satisfied by the issue of fully paid-up shares

Of Rs. 100 each in A Ltd.

Following further information is also to be taken into consideration:

A Ltd. holds 5,000 shares of B Ltd. at a cost of Rs. 3,00,000
The stocks of B Ltd. include items valued at Rs. 1,00,000 purchased from A Ltd. (cost to A Ltd.Rs. 75,000)
The creditors of B Ltd. include Rs. 50,000 due to A Ltd.

Show ledger accounts in the books of B Ltd. to give effect to the above and Balance

Sheet of A Ltd. after completion of the absorption.

Big Ltd. purchased control of Small Ltd. on 1.7.2004. Following are the Balance

Sheets of the two companies at 31.12.2004

Liabilities

Big. Ltd.

Small

Ltd.

Assets

Big. Ltd.

Small

Ltd.

Equity share capital of Rs. 10 each

General Reserve

P & L A/c

Creditors

Bills payable to Big Ltd.

Contingent liability of Big Ltd. for Rs. 9,000 for bills discounted

3,60,000

36,000

60,000

_______

5,16,000

1,80,000

30,000

60,000

42,000

6,000

________

3,18,000

Goodwill

Building

Machinery

Stock in trade

Debtors

Investment in 13,500 shares of Small Ltd.

Cash at bank

6,000

60,000

1,20,000

70,500

30,000

2,02,500

27,000

________

5,16,000

24,000

60,000

1,08,000

60,000

54,000

12,000

________

3,18,000

Small Ltd. had on 1.1.2004 Rs. 30,000 in General Reserve and Rs. 36,000(Cr.) in Profit and Loss Account. 10% dividend was received by Big. Ltd. in July from Small Ltd. for 2003 and this amount was credited to Profit and Loss Account of holding company. Machinery standing in the books of Small Ltd. at Rs. 1,20,000 on the date of purchase was revalued at Rs. 1,44,000. Stock of Small Ltd. includes Rs. 9,600 received from Big Ltd. on which it made a profit of 25% on cost.

Prepare the Consolidated Balance Sheet.

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Loyola College B.Com April 2009 Adv. Corporate Accounts Question Paper PDF Download

October 20, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

KP 34

B.Com. DEGREE EXAMINATION – COMMERCE

SIXTH SEMESTER – April 2009

CO 6606 – ADV. CORPORATE ACCOUNTS

Date & Time: 23/04/2009 / 9:00 – 12:00 Dept. No. Max. : 100 Marks

SECTION A (10 x 2 = 20)

Answer any TEN questions.

Mention any two features of double account system.
Explain Non Performing assets.
What do you mean by Money at call and short notice?
Explain the term Bonus in Reduction of Premium.
What do you understand by Valuation Balance Sheet?
On 1^st October 2007, Robin Bank discounted a five month bill of Rs.20,000 at 12% p.a. Give the journal entry for rebate on bills discounted(accounts are closed on 31^st December).
Under which schedule of the Bank will the following items appear in the final statement?
a) Unclaimed dividend; b) Interest paid on current accounts; c) Gold ; d)Non-banking assets

While closing the books of a bank on 31^st December 2003, you find in the loan ledger as unsecured

balance of Rs. 2 lakhs in the account of a merchant whose financial condition is reported to you as

bad. Interest on the same account amounted to Rs. 20,000 during the year. During the year 2004,

the bank accepted 75 paise in the rupee on account of the debt upto 31^st December 2003. Find out

the amount of bad debts.

The life fund of a Life Insurance Co. on 31^st March 2006 showed a balance of Rs.54,00,000. However the following items had been omitted from the accounts:

(a) Outstanding premiums-Rs.32,800

(b) Claims intimated but not admitted-Rs.17,400

What is the revised life insurance fund?

While closing the books of account, a commercial bank has its advances classified as

follows:

Classification of assets Rs. in lakhs Doubtful assets: Rs. in lakhs

Standard assets 8,000 Upto one year 700

Sub-standard assets 650 One to three years 400

Loss assets 500 More than three years 200

You are required to calculate the amount of provisions to be made by the bank.

SECTION B (5 x 8 = 40)

Answer any 5 questions:

Distinguish between Merger method and Purchase method of accounting foe Amalgamation.

Write Short notes on:

(i) Rebate on bills discounted

(ii) Minority interest

(iii) Reinsurance

(iv) Annuity

The following are the balance sheets of Y Ltd. and X Ltd. as on 31-3-2002

Liabilities

Y Ltd

X Ltd

Assets

Y Ltd

X Ltd

Share Capital:

Shares of Rs. 10 each

P & L A/c

Loan from Y Ltd

Creditors

2,00,000

30,000

—-

20,000

3,00,000

50,000

40,000

10,000

Buildings

Loan to X Ltd.

Investments in

5,000 shares of X Ltd.

Stock

Debtors

Cash at Bank

75,000

40,000

50,000

55,000

20,000

10,000

2,80,000

—-

70,000

35,000

15,000

2,50,000

4,00,000

2,50,000

4,00,000

X Ltd absorbs the business of Y Ltd. on the condition that is has to issue the equal

number of shares of Rs. 10 each at Rs. 11 per share held by the members of Y Ltd.

Give the ledger accounts in the books of Y Ltd. and journal

entries in the of X Ltd; and also prepare the balance sheet of X Ltd. after absorption

(apply purchase method)

The XYZ Electricity Company decided to replace some parts of its Plant by an improved Plant.

The Plant to be replaced was built in 2003 for Rs. 54,00,000. It is estimated that it would now

cost Rs. 80,00,000 to build a new Plant of the same size and capacity. The cost of the new Plant

as per the improved design was Rs. 1,70,00,000 and in addition, material belonging to the old

Plant valued at Rs. 5,50,000 was used in the construction of the new Plant. The balance of the old

Plant was sold for Rs. 3,00,000. Compute the amount to be capitalized. Also pass the journal

entries and Replacement Account.

The following were the balance sheets of Large Ltd. and Little Ltd. as on 31.12.2007

Liabilities

Large Ltd

Little Ltd.

Assets

Large Ltd.

Little Ltd.

Share Capital:

Share Capital of Rs. 10 each

General Reserve

P & L A/c

Creditors

1,00,000

40,000

30,000

20,000

________

1,90,000

20,000

3,000

—

7,000

_______

30,000

Buildings

Shares in Little Ltd. at cost

Stock

Debtors

Bank

P & L A/c

90,000

28,000

25,000

35,000

12,000

—-

________ 1,90,000

10,000

—

8,000

7,000

2,000

3,000

________

30,000

When the Large Ltd. acquired 80% of the shares in Little Ltd. the latter had a credit balance of Profit & Loss A/c Rs. 2,000 and General Reserve Rs. 3,000. Prepare the consolidated balance sheet

H Electricity Co. earned a Profit of Rs. 8,49,250 after paying Rs. 30,000 @ 6% as debentures

interest for the year ended 31-1-2004. The following further information is supplied for you:

Fixed Assets Rs. 1,80,00,000

Depreciation written off 50,00,000

Loan from Electricity Board 40,00,000

Reserve Fund investments at Par(4%) 10,00,000

Contingencies Reserve investment, at par(4%) 7,50,000

Tariffs and Dividends control reserve 1,00,000

Security deposits of customers 1,50,000

Customers’ contribution to assets 50,000

Preliminary expenses 40,000

Monthly average of current assets, including

Amount due from customers Rs. 2,50,000 7,60,000

Development Reserve 2,50,000

Assume RBI bank rate at 6% p.a.

Show the disposal of the profits.

Jaldi Pay Insurance Co. Ltd. has furnished the following information for preparation of

revenue account for fire insurance business for the year ended 31.12.2007

Rs.

Claims admitted but not paid

Commission paid

Commission on reinsurance received

Share transfer fees

Expenses of management

Reserve for unexpired risk

as on 1.1.07

Additional reserve on 1.1.07

42,376

50,000

12,000

5,000

78,000

2,30,000

40,000

Bad debts

Claims paid

P&L A/c

Premium received

less insurance

Claims outstanding

as on 1.1.7

Dividend on

share capital

2,500

15,000

10,000

5,52,000

27,000

18,500

The following further information has also to be considered:

(i) Premium outstanding at the end of the year Rs. 40,000

(ii) Additional reserve at 10% of net premium to be maintained.

(iii) It is the policy of the company to maintain 50% of premium towards

Reserves for unexpired risks.

A Life Insurance Company gets its valuation made once in every two years. Its Life Assurance

fund on 31.3.98 amounted to Rs. 63,84,000 before providing Rs. 64,000 for the shareholders’

dividend for the year 1997-98. It actuarial valuation due on 31.3.1998 disclosed a net liability

of R.s 60,80,000 under assurance annuity contracts. An interim bonus of Rs. 80,000 was paid

to the policy holders during the two years ending 31.3.1998.

Prepare a statement showing the amount now available as bonus to policy holders.

SECTION C (2 x 20 = 40)

Answer ANY 2 questions:

Alpha Co. Ltd and Beta Co. Ltd decided to amalgamate their business and form a new company called Gamma Co. Ltd which will take over all the assets and liabilities of both the companies on the basis of the following balance sheets:

Liabilities

Alpha Ltd.

Beta Ltd.

Asstes

Alpha Ltd.

Beta Ltd.

Share Capital:

Shares of

Rs. 100 each

General Reserve

Profit and loss Account

Creditors

1.00,000

30,000

20,000

50,000

2,00,000

20,000

10,000

40,000

Goodwill

Machinery

Patents

Stock

Debtors

Cash

30,000

90,000

25,000

35,000

15,000

5,000

20,000

1,00,000

—

80,000

60,000

10,000

2,00,000

2,70,000

2,00,000

2,70,000

(i) The purchase consideration of Alpha Ltd. is agreed at Rs.1,60,000 payable in fully

paid shares of Rs.10 each.

(ii)The purchase consideration of Beta Ltd. is agreed for an exchange of Rs.10 each fully paid in Gamma Co. Ltd for every share in Beta Co. Ltd. Prepare the Amalgamated Balance Sheet(Note: Amalgamation is in the nature of ‘Merger’)

The following are the ledger balances extracted from the books of the Karnataka

Bank Ltd. as 31.3.2002

Capital

40,000 shares of Rs. 10 each fully paid

Statutory Reserve

Profit & Loss Account(balance on 31.3.2001)

Current Deposits

Savings Bank Deposits

Fixed Deposits

Borrowing(from other banks)

Employees’ Security Deposits

Cash in Hand

Balances with Reserve Bank of India

Balances with Banks

Money at Call & Short Notice

Investments in Government Securities

Investments in Approved Securities

Investments in Shares

Bills Purchased & Discounted

Cash Credits, Overdrafts, etc.

Buildings(cost Rs. 1,00,000)

Furniture & Fixtures(cost Rs. 50,000)

Inter-office Adjustments

Interest Accrued on Investments

Interest & Discount

Income on Investments

Commission, Exchange & Brokerage

Profit on Sale of Investments

Loss on Sale of Investments

Miscellaneous Income(rent received)

Interest on Deposits

Interest on Borrowings

Payments to & Provisions for Employees

Rent, Taxes & Lighting

Director’s Fees

Auditors’ Fees

Postage & Telegrams

1,40,000

1,00,000

1,80,000

40,000

1,90,000

12,000

28,000

80,000

3,10,000

76,000

34,000

50,000

10,000

2,000

37,000

8,000

60,000

4,000

2,000

3,000

1,000

4,00,000

70,000

30,000

2,30,000

50,000

1,60,000

1,50,000

45,000

2,00,000

10,000

14,000

7,000

1,000

13,67,000

Other Information:

Provide for rebate on bills discounted Rs. 5,000
Write off depreciation on: Buildings Rs. 6,000 and Furniture & Fixtures Rs. 4,000
Current deposits include Rs. 10,000 being debit balances representing overdrafts
Bills for collection amounted to Rs. 70,000 and acceptances, endorsements, etc. Rs. 50,000

Prepare the Final Statements as on 31.3.2002.( Detailed schedules need not be prepared)

The following were the balance sheets of H Ltd. and S Ltd as on 31-12-2005 from which prepare consolidated balance sheet:

Liabilities

H Ltd

S Ltd.

Assets

H Ltd.

S Ltd.

Share Capital of

Rs. 10 each

General Reserve

P & L A/c

Creditors

Bills Payable

5,00,000

60,000

30,000

20,000

10,000

6,20,000

2,50,000

50,000

40,000

15,000

25,000

3,80,000

Fixed Assets

Shares in S Ltd.

20000shares of Rs.10eachat cost

Govt. Securities

Stock

Debtors

Bills Receivable

Bank

2,00,000

2,50,000

—

70,000

40,000

15,000

45,000

—

6,20,000

1,50,000

—

80,000

75,000

35,000

15,000

25,000

3,80,000

(1) When the H Ltd. acquired the shares in S Ltd on 1-5-05 the latter had Rs. 50,000 and Rs10,000 to the credit of General Reserve and Profit and Loss Account respectively.

(2) Bills payable of S Ltd. include Rs. 5,000 accepted in favour of H Ltd.

(3) The debtors of H Ltd. include Rs. 2,500 due from S Ltd.

(4) The stock of S Ltd. included Rs. 12,000 supplied by H Ltd. at cost plus 20%.

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

October 19, 2017 by 01 prakash

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)

Explain the meaning of double insurance.
Explain what is non- performing assets?
Write a short note on minority interest.
Write a note on purchase consideration.
What is meant by double account system?
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.
Interest accrued on investments Rs.39000; income tax liable to be deducted thereon is estimated to be Rs.10500.
Outstanding premiums Rs.32800.
Bonus utilized for reducation of premium Rs. 6750
Claims intimated but not admitted Rs. 17400.
Claims covered under reinsurance Rs. 6500.

What is the true life assurance fund?

On 31^st 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.

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.

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.

Explain cost of control.

PART – B

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

Distinguish between amalgamation, absorption and external reconstruction with suitable examples.
Explain the various schedules to be prepared by a commercial bank.
What are the advantages and disadvantages of double account system?
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

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 30^th June 2006. Draft a consolidated balance sheet of C ltd and its subsidiary.

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

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.

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.

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)

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.

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.

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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