M.Com. (Semester (CBCS) Examination Nov/Dec-2018
ADVANCED ACCOUNTANCY (Paper
Time: 2½ Hours Max. Marks: 70
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Choose the alternatives given below. 14
Under the double accounting system the balance sheet is presented in
parts.
Two Three
One Not prepared
Policy maturing only on death of insured is termed as
Endowment Policy Whole Life Policy
With Profit Policy None of the above
Liabilities under the existing policies are determined by valuation
in case of Life insurance.
Actuarial Fair
Average Surrender
Reduction of share capital requires the permission of
Central Government Court
SEBI State Government
If the right to recoup the short workings has expired they are transferred by
the lessee to
Profit and Loss Account Landlord Account
Royalty Account None of these
The depreciation on the fixed assets, under the double account system is
shown as
Depreciation reserve on the liabilities side of the general balance sheet
A deduction from the fixed assets
An expenditure on capital account in the first section of the balance
sheet
None of these
A company has issued capital of 10,000 equity shares of Rs. 10 each fully
paid. It decides to convert its capital into 20,000 equity shares of Rs. 5
each. It is a case of
Consolidation of share capital Sub-division of share capital
Decrease in us issued share capital None of these
The term means recognizing the capital structure of a company
including the reduction of claims of both the shareholders and the creditors
against the company.
Liquidation Reconstruction
Formation None of these
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While preparing the final accounts of an insurance company carrying on
general insurance business, the minimum reserve for unexpired risks that
has to be kept in respect of marine business is
50% 75%
100% None of these
10) If there is any balance in the capital reduction account after writing off all
the accumulated losses, then the same is transferred to
Share Capital Account Capital Reserve Account
General Reserve Account None of these
11) Cost of license is show in the
Capital A/c Reserve A/c
Income Expenditure A/c General Balance Sheet
12) A has taken a lease of mine with a minimum rent Rs. 1,00,000. The rate of
royalty is Rs. 1 per tonne. The production is Rs. 80,000 tonnes in a
particular year. Hence, the amount payable by a will be equal to
Rs. 20,000 Rs. 10,000
Nil None of these
13) International financial reporting standards, adopted by international
accounting standards board is a standardized format of
Final account Financial Reporting
A B None of these
14) International financial reporting standard comprises
IFRS IAS
SIC All of the above
Q.2 Write short note. 14
Define IFRS its importance
Short workings
Q.3 The X Co. Ltd. leased a property from Y Co. Ltd at a royalty of Rs. 1.50
per ton with a minimum rent of Rs. 2,000 p.a. each year excess of
minimum rent over royalties is recoverable out of the royalties of the next
five years. In the event if a strike and the minimum rental not being
reached, the lease provided that minimum rent would stand reduced
proportionately to time actually worked.
The results of the working were as follows,
07
Year Actual Royalties
1994 Nil
1995 650
1996 1,850
1997 2,250
1998 3,500
1999 (Strike-3 Months) 1,200
2000 3,000
Write up the royalty A/c and calculation of short workings table in the
books of X Co. Ltd. for all the years.
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On 31st March, 1999 the books of Maharashtra Fire General Insurance
Company Ltd. contained the following balances in respect of the
insurance business.
07
Particulars Rs.
Provision for unexpired risk on 1-4-98 3,50,000
Estimated liabilities in respect of outstanding Claims:
On 31st March, 1998 43,500
On 31st March, 1999 76,000
Expenses of management 2,25,000
Commission 1,25,000
Claims paid 3,95,000
Premiums 7,00,000
Interest Dividends 31,000
Profit on sale of securities 3,500
Re-insurance recoveries 10,000
Prepare the fire revenue account reserving for unexpired risk 40 percent
of premiums and treating the surplus if any as additional reserve. Fire
insurance premium Rs. 7,00,000 is after receipt of Rs. 20,000 and
payment of Rs. 30,000 as re-insurance premiums. An adjustment in
respect of commission at 15 percent on such premium is still to be made.
Q.4 Following are the balances of Jai Hind Ltd., as at 31st March, 2001 14
Particulars Rs.
Capital: 10,000 cumulative preference shares of
Rs. 10 each
1,00,000
16,000 equity shares of Rs. 10 each 1,60,000
Shares premium account 30,000
Creditors 26,000
Goodwill 10,000
Patent and trade marks 21,000
Freehold property at cost 70,000
Depreciation thereon 14,000
Plant and Machinery at cost 1,40,000
Depreciation thereon 30,000
Stock on 31st March, 2001 24,000
Debtors 15,000
Profit and loss account 55,000
Preliminary expenses 25,000
A scheme for reduction of capital was passed by the court on the following
terms:
Preference shares to be reduced to Rs. 9 per share.
Equity shares to be reduced to Rs. 1.25 per share.
The share premium A/c and intangible assets to be written off.
Plant and machinery to be revalued at Rs. 50,000.
One equity share of Rs. 1.25 to be issued for each Rs. 10 gross
preference dividend arrears, which is in arrears since March, 1997.
Draft journal entries and the revised balance sheet.
OR
Q.4 From the following balances extracted from the books of Purab-Pachim
Insurance Co. Ltd. please prepare revenue accounts and profit and loss
account for the year ended 31st December 1990 and a balance sheet as on that
date:
14
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Particulars Rs. Rs.
Share capital 5,000 share of Rs. each
Claims paid:
Fire insurance
Marine Insurance
Accident Insurance
Funds as at
Fire Insurance
Marine Insurance
Accident Insurance
Commission paid:
Fire insurance
Marine Insurance
Accident Insurance
Dividend equalization fund
Expenses of management:
Fire insurance
Marine Insurance
Accident Insurance
Premia less Re-insurance:
Fire insurance
Marine Insurance
Accident Insurance
Claims outstanding on
Fire insurance
Marine Insurance
Accident Insurance
Interest on Investments
Dividend on shares (less tax)
Miscellaneous receipts-accident
Audit fees
Income tax on interest on investments
Directors fees
Outstanding premia (fire)
Loan granted against mortgages in India
Debentures of companies in India
Preference shares of companies in India
Other Investments
Amount due by agents
Loss on realization of investments
Amount due to Re-insurers
Cash in hand at bank
3,10,500
2,40,700
60,300
85,100
62,200
31,400
1,65,300
44,400
22,600
5,000
17,400
2,000
40,100
60,000
2,10,000
1,70,000
8,50,000
63,100
6,000
7,15,200
5,00,000
3,20,000
2,00,000
80,000
1,00,000
8,50,000
6,20,000
3,30,000
10,500
20,700
12,300
86,900
10,200
1,900
18,800
31,61,300 31,61,300
You are required to take into consideration the following information:
Marine premia amounting to Rs. and commission thereon at the
rate of 10% were outstanding.
Outstanding claims at the end of year were:
Fire Rs. Accident Rs.
Interest on Rs. on debenture held as investments was still not
collected.
Reserve for unexpired risk is to be provided in accordance with the
Code of Conduct of the general insurance companies.
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Q.5 Eastern Indian coal company worked a coal mine under a lease which provided
as under:
14
Royalties to be paid at 60 paise per ton of coal
Minimum rent at Rs. 18,000 p.a.
Each year excess of Minimum rent over the actual royalties was to be
recouped during the next three years.
If in any year the normal rent was not attained due to strike or accident
the Minimum rent was to be reduced proportionately according to the
length of stoppage.
Ground rent of Rs. 500 per annum is payable by the lessee.
Following was the output:
1995 6,000 tons 1998 48,000 tons
1996 28,000 tons 1999 30,000 tons
1997 36,000 tons 2000 48,000 tons
During the year 1999 there was a strike for 4 months.
Write up the royalties account, Landlords A/c and short workings
account in the company's books.
OR
Q.5 The trial balance of Kolhapure Electric Supply Co. Ltd. for the year ended 31st
March 1996 was as follows.
14
Balance as on
31-3-1995
Rs.
Particulars
Balance as on 31st
March 1996
Debit Rs. Credit Rs.
1,68,75,000 Share Capital 1,80,00,000
Mortgage Debentures:
96,00,000 9,600 Debentures of Rs. 1000 each 96,00,000
1,10,700 Share Premium Account 1,23,150
24,60,000 Depreciation Fund 24,60,000
Depreciation Fund Investment 24,60,000
96,00,000 Freehold Land 1,00,65,000
34,50,000 Buildings 38,58,750
23,29,020 Mains and Meters 25,47,840
1,04,46,600 Plant 1,16,37,000
96,000 Wagons and Vans 1,42,500
60,000 Office Furniture 60,000
Stock in hand (31st March 1995)
Coal 11,55,900
Other materials 6,480
Repairs renewals of plants 11,05,410
Repairs renewals of mains meters 5,69,460
Wages:
Generation 5,00,000
Distribution 3,37,600 8,37,600
Salaries:
Generation 1,10,000
Distribution 23,650 1,33,650
Directors fees 2,85,000
Rates taxes 2,83,800
Bad Debts 96,300
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Legal charges 11,250
General expenses (Administration) 3,19,560
Sick and accident compensation Paid
to worker
Certificate fees 1,26,600
Sale of electricity: 600
Lighting, heating etc.
Sale of electricity: Power 38,17,500
Interest on debentures 1,19,64,780
Net revenue account balance 5,76,000
Sundry creditors 12,26,010
Sundry debtors 5,49,780
Balance in current A/c with bank 13,04,940
Cash in hand 49,23,375
Purchases: 15,585
Coal 51,40,470
Other material 79,350
4,77,41,820 4,77,41,820
Other Information:
Stock in hand on 31st March 1996 coal Rs. 10,39,410 and other
materials Rs. 16,050.
Rs. 45,000 is to be transferred to reserve.
Depreciation is to be provided as of value of plant and 2.5% of value
of buildings on 1st April 1995.
You are required to prepare Capital Account, Revenue Account, Net
Revenue Account and General Balance Sheet.