M.Com. (Semester (CBCS) Examination, 2017
ADVANCED ACCOUNTANCY (PAPER-I)
Day Date: Tuesday, 18-04-2017 Max. Marks: 70
Time: 02.30 PM to 05.00 PM
N.B. All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Choose the alternatives given below. 14
Every year, the accounting year of every Insurance Company is to
end on
31st December 30th June 1
30th September 31st March
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 Loss A/c Lessees A/c
There is neither liquidation nor formation of any co. in case of
Amalgamation Absorption
Internal Reconstruction External Reconstruction
Policy maturing only on death of insured is termed as
Endowment Policy Whole life policy
With profit policy None of the above
capital is to be reduced to the extent.
Paid up Capital Authorized Capital
Issued Capital All of the above.
Royalty account is in the nature of
Personal A/c Real A/c
Nominal A/c None of these.
is the amount which a policy holder can get
immediately in case from the life Insurance company if he stops
paying premium.
Bonus Claim Premium Surrender value
Minimum Rent is also called
Dead Rent Rock Rent
Fixed Rent All of the above.
Page 2 of 5
Life Insurance has an element both of Protection and
Premium Land Lord A/c
Investment Risk
10) The Minimum Rent of Royalty whichever is more is to be paid to
the
Lessee Land Lord
Sub lessee A/c None of these
11) Insurance business is controlled by
Insurance 1938 Insurance Rules, 1939
IRDA Regulations, 2002 All of the above.
12) Cost of license is shown in the
Capital A/c Revenue A/c
Income expenditure A/c General Balance sheet
13) As per IRDA regulation as Insurance company is required to
prepare
Revenue A/c Profit Loss A/c R
Balance sheet All of the above
14) The balance of capital Reduction account after writing off
accumulated losses is transferred to
General Reserve A/c Share capital A/c
Capital Reserve A/c Profit Loss A/c
Q.2 Write short note on any two. 14
Meaning and advantages of IFRS.
Minimum Rent
Write short note on Re-Insurance
Q.3 The following figures of Asian Life Assurance Co. Ltd. Given
below. You are to prepare the Revenue A/c for the year ended
31.3.2015
07
Particulars Rs.
Life Assurance Fund 1.4.2014
Premiums
Re-assurance on premium
Claims
Re-insurance of claim
Consideration for Annuities granted
Surrenders
Commission
60,00,000
24,00,000
30,000
3,50,000
1,500
75,000
1,50,000
1,12,000
Annuities
Interest, Dividend and Rents
Income Tax-thereon
Bonus in cash
Bonus in Reduction in premium
Exp. of management
Fines for revival of Lapsed Policies
Surplus on revaluation of reversions purchased
1,23,000
13,20,000
1,85,000
1,85,000
6,700
1,75,000
1,350
10,000
Page 3 of 5
The Rohan Co. Ltd. leased a property of Ram Co. Ltd. at
Royalty of Rs. 75 paisa per tons with minimum Rent 40,000 p.a.
each year excess of minimum Rent over royalty was recoup in
next two year in the event of strike minimum rent would be
reduced proportionately to actual work.
07
Years Tons
2010
2011
2012
2013 months strick)
2014
17,600
60,000
96,000
40,000
80,000
Prepare Royalty A/c and Short Working A/c.
Q.4 Vijay Co. Ltd. leased a colliery on 1st Jan. 2010 from M/s. Sathe at a
minimum Rent of 40,000 p.a. at a Royalty of Rs.3 per ton. With a
right to recover short-working over the first three years of the Lease.
The output for the first four years of the lease was as follows.
14
Years Output (tons)
2010
2011
2012
2013
10,000
12,000
14,000
20,000
Prepare Ledge A/c in the books of M/s Sathe (Land Lord).
OR
The following are the balances of Jai-Hind Ltd. as at 31st March 2015.
Capital 10,000, cumulative preference
shares of Rs. 10 each
16,000 equity shares of Rs. 10 each
Share premium A/c
Creditors
Goodwill
Patent and Trade Marks
Free hold Property at costs
Dep. thereon
Plant and Machinery
Dep. thereon
Stock on 31st March 2015
Debtors
Profit Loss A/c
Preliminary exp.
1,00,000
1,60,000
30,000
26,000
10,000
21,000
70,000
14,000
1,40,000
30,000
24,000
15,000
55,000
25,000
A scheme for reduction of Capital was passed by the court on the
following terms.
Pref. Share to be reduced to Rs. 9 per share
Equity share to be reduced to Rs. 1.25 per share
The share premium A/c and intangible assets to be written off.
Plant 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
Page 4 of 5
March 2011.
Draft Journal Entries and Revise Balance Sheet.
Q.5 From the following figures relating to General Insurance Co. Ltd. for
the year ended 31.3.2015. You are required to prepare the Revenue
A/c of the Fire Department.
14
Reserve for an expired risk as at 1.4.2014
Estimated liability in respect of o/s claim
on 1.4.2014
on 31.3.2015
Claim paid
Re Insurance premium
Paid
Recovered
Premium received
Commission
On direct business
On reinsurance ceded
On reinsurance accepted
Management exp
Int. Dividend (Less tax)
Legal exp. (re-claim)
60,000
20,000
15,000
80,000
5,000
3,000
2,02,000
30,500
1,000
500
60,000
9,000
3,000
The reserve required for unexpired risk as on 31.3.2015 is 40% of
the net Premium income.
OR
From the following balance sheet of Balaji Electric Light and Power
Co. ltd. prepare according to ordinary commercial method, construct
balance sheet and capital A/c according to the requirement of Double
Account System.
Balance Sheet
As on 31st March 2015
Liabilities Rs. Assets Rs.
Ordinary Share Capital
8000, shares of Rs.10
each fully paid
80,000
Land
Building
Balance as
per last
balance sheet 85,330
Pref. share Capltal2000,
Cumulative pref.
share of Rs.10 each.
fully paid 20,000
Additional
during the
years
20,000 1,05,330
Premium on shares
20,000
Main and
service
balance as
per last B/S 10,000
S. creditors
841
Additional
during the
year 1,920 11,920
Page 5 of 5
Reserve fund 500 Meters 1,050
Unclaimed dividend
20
Preliminary
Exp 1,000
Revenue A/C
Reserve Fund
Investment 500
Balance As Per last
Balance Sheet 1,000
Stores on
hand 340
Add balance brought
from Revenue A/C 7,674
S. Debtors
1,290
8,674
Cash and
Bank balance:
Less: Cash in hand 1,060
Interim dividend 3,000 Cash at bank 3,103 4,163
Transfer to Reserve 242
Dividend on pref. 1200 4,442 4,232
125593 125593