M.Com. (Semester (CBCS) Examination Mar/Apr-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.
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Liabilities under the existing policies are determined by valuation incase of Life insurance.
Actuarial
Fair
Average
Surrender
Electricity supply undertakings are governed by
Indian Electricity Act, 1910
Electricity (Supply) Act, 1948
Both a and b
Companies Act, 1956
Reduction of share capital requires the permission of
Central government
Court
SEBI
State Government
Policy maturing on death of insured is termed as
Endowment policy
Whole life policy
With profit policy
None of the above
Cost of license is shown in the
Capital account
Revenue account
Income and expenditure account
General balance sheet
In marine insurance business of premium is carried forward for and the balance is transferred to Profit and Loss A/c.
100%
50%
25%
10%
Legal fees with respect to claims is shown in
Revenue A/c
Profit Loss Appropriation A/c
Profit Loss A/c
None of these
The types of reconstruction are
2
3
Only one
None of the above
Royalty account is in the nature of
Personal account
Real account
Nominal account
None of the above
10) Life insurance has an element both of protection and
Premium
Safety
Investment
Risk
11) When the lessor received payment he credits
Lessees A/c
Royalty A/c
Landlord A/c
Short workings A/c
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12) According 'code of conduct' reserve for unexpired risk at the end is maintained at of the premium incase of fire insurance.
50%
25%
75%
100%
13) The minimum rent or royalty whichever is more, is to be paid to the
Lessee
Landlord
Sub-lessee A/c
None of the above
14) At the end of the year Royalty A/c is closed by transferring its balance to
Short working A/c
Land Lord A/c
Profit and Loss A/c
Lessees A/c
Q.2
Write short note.
14
Ascertainment of profit in the case of life insurance.
Internal reconstruction of a company.
Q.3

The paid-up capital of Sports Ltd. amounted to Rs. consisting of 25,000 equity shares of Rs. each.
07
Due to losses incurred by the company continuously, the directors of the company prepared a scheme for reconstruction which was duly approved by the court. The terms of reconstruction were as under:
In lien of their present holdings, the shareholders are to receive:
Fully paid equity shares equal to 2/5th of their holdings.
ii) preference shares fully paid up to the extent of 20% of the above new equity shares.
iii) 3,000, second debentures of Rs. 10 each.
An issue of 2,500, first debentures of Rs. each was made and fully subscribed in cash.
The assets were reduced as follows.
Goodwill from Rs.1,50,000/- to Rs.
ii) Machinery from Rs. to Rs.
iii) Leasehold premises from Rs. to Rs.
Show the journal entries to give effect to the above scheme for reconstruction.

On 1st January 2002, Oil Gas Co. Ltd. acquired on lease certain oil wells at a minimum rent of Rs. p.a., merging into a royalty of Rs. per ton of oil taken out. The short workings were recoverable in next two years of such short workings only, but on condition that if full short workings could not be recovered in the next year of the short workings, the company shall loose its right to recover 50% of the unrecovered balance of short workings.
07
The output of the first three years was 6,000 tons for the first year, 15,000 tons for the second year and 30,000 tons for the third year.
Show Royalties Receivable A/c and short workings Allowable A/c in the books of the Landlord.
Q.4
A Life Assurance co. got its valuation made once in every two years. The Life Assurance fund on 31st March 2010 amounted to Rs. before providing for Rs. for the shareholders dividend for the year 2009. Its actuarial valuation on 31st March 2010, disclosed net liability of Rs. under the Assurance and Annuity contracts. An interim bonus of Rs. was paid to the policy holder during the intervaluation period ending 31st March 2010. Surplus brought forward from the previous valuation was Rs. 35,000/-.
14
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Show:
The valuation Balance sheet.
The Net profit for the valuation period.
The distribution of the surplus.
OR
The following is the balance sheet of Sick Ltd. As on 31.3.2015
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Liabilities
Rs.
Assets
Rs.
Share capital 30,000 equity shares of Rs. each fully paid 30000 preference shares of Rs. each fully paid Creditors Bills payable
3,00,000 3,00,000 70,000 30,000
Goodwill Buildings Machinery Patents Stock Debtors Cash Preliminary expenses Profit Loss A/c
40,000 2,70,000 1,20,000 50,000 30,000 1,00,000 10,000 20,000 60,000
7,00,000
7,00,000
The following scheme of reconstruction is sanctioned:
That the equity shares be reduced equal number of fully paid shares Rs. each.
That the preference shares be reduced to an equal number of fully paid shares of Rs. each.
The amount so available is utilized as follows:
Goodwill, preliminary expenses and profit and loss account amounts to be written off completely.
Rs. to be written off buildings, Rs. to be written off machinery, Rs. to be written off stock, a provision for doubtful debts be made at 10% of debtors and the balance available to be utilized to write off patents.
Show Capital reduction account and the balance sheet of the company after giving effect to the above.
Q.5

Following are the particulars in respect of Maharashtra Electricity Co. Ltd for the year ending 31st March 2016.
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Authorised Capital 8,000 equity share of Rs. each
Issued capital 4000 equity share of Rs. each fully paid
(inclusive of 500 equity shares issued during the years)
Debenture
Rs. 2,00,000
Trade Creditors
Rs. 50,000
Reserve fund
Rs.1,00,000
Trade Debtors
Rs. 90,000
Cash at Bank
Rs. 50,000
Reserve fund Investment at cost Rs. 100,000/- (Market Value
Stock Rs.
Fixed assets expenditure up to Rs 1-4-2015
Machinery Rs. and Building Rs.
Addition during the year Machinery Rs. deprecation fund of machinery and Building Rs. P&L A/c Rs.
You are required to draw up:
Capital Account
General Balance sheet as on 31-3-2016 under Double A/c system.
OR
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A Coal company leased a mine on a royalty of Rs. 4 per ton of coal raised with a minimum rent of Rs. per year. The right to recoup short workings was out of the surplus royalties during the first three years only. The quantities of coal raised during the first four years were 1200, 2000, 6000 and 10,000 tonnes respectively.
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Pass journal entries in the books of Coal company for the above period.