M.Com. (Semester III)(OLD) Examination, 2017
ADVANCED ACCOUNTANCY (PAPER-III)
Day Date: Tuesday, 18-04-2017 Max. Marks: 50
Time: 10.30 AM to 12.30 PM
N.B. All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Choose the alternatives given below. 10
Purchase of a business of one company by an existing company
is termed as
Amalgamation Absorption 1
Reconstruction Liquidation
Amount payable by a purchasing company to Vendor Company is
called
Purchase consideration Interest
Dividend Net Asset
Grain consumed by live stock is charged to
Live Stock A/c Crop A/c
Bothe these A/c None of these
Accounting standard -14 relates to
Absorption Reconstruction
Amalgamation Holding company
In farm accounting consumption of product by the owner, which
account is debited
Drawings A/c Crop A/c
Live stock A/c None of these
Profits earned by a subsidiary company prior to acquisition of
shares by holding company are termed as
Capital profit Revenue profit
Realization profit None of these
In farm accounting, self-made Assets are valued at
Cost price Market price
Cost-price None of these
Purchase consideration can be calculated by way of
Lump-Sum method Net Assets method
Net Payment method All of the above
A company which controls one or more other companies by way
of holding shares in that company is called as
Holding company Subsidiary company
Branch None of these
Page 1 of 4
SLR-Q-26
10) At the time of purchase of containers is debited.
Container A/c Purchase A/c
Containers Trading A/c Containers stock A/c
Q.2 Write short answer.
Methods of Calculation of purchase consideration. 05
Explain the term Minority interest. 05
Q.3 Define 'External Reconstruction of companies'. 05
Lubricants Ltd. sells oil in drums which are charged at Rs. 10 each.
Customers returning drums within a month are credited with Rs.8
05
Following information is available from the books for the year ended
31st March 2015.
Nos.
Returnable drums with customers on 1.4.2014 400
Drums in stock on 1.4.2014 800
Drums purchased at Rs.5 Each 3,000
Drums sent out during the year 50,000
Drums returned by customers 48,000
Drums scrapped and sold for Rs. 50 200
Drums laying with customers (returnable) 1,000
All drums as on 1.4.2014 were valued at 2 each and all drums as
on 31st March, 2015 are to be valued at 50% below cost price.
Amount due from debtors as on 1.4.2014 was Rs. 1000 and amount
received from debtors during the year amounted to
Rs. 10,000.
Show Drums Stock Account in the books of Lubricants Ltd.
Q.4 From the following Balance -Sheet and particulars given below
prepare consolidated Balance Sheet of Sun Ltd. and its
subsidiary Moon Ltd. as on 31st December, 2003.
10
Balance Sheet as on 31 Dec. 2013
Liabilities
Sun Ltd.

Moon
Ltd. Assets
Sun Ltd.

Moon
Ltd.
Share Capital:
Authorized
Issued Equity
Shares of Rs. 100
each fully paid
Reserve Surplus
General Reserve
as on 1.1.2003
Profit Loss A/c
Current Liabilities
and Provisions:
1,00,000
20,000
28,000
40,000
12,000
18,000
Fixed Assets:
Goodwill 8,000 6,000
Land Buildings 25,000 20,000
Plant
Machinery 40,000 22,000
Furniture
Fitting
Investments:
300 Equity
shares in Moon
Ltd. at cost
7,000
48,000
2,000

Bills payable
Creditors

16,000
8,000
10,000
Current Assets:
Short in Trade 20,000 18,000
Debtors 4,000 15,000
Cash at Bank 12,000 5,000
1,64,000 88,000 1,64,000 88,000
Page 2 of 4
SLR-Q-26
Sun Ltd. acquired the shares in Moon Ltd. on 1.7.2013. The bills
payable of Moon Ltd. were all issued in favor of Sun Ltd. which
company got the bills discounted. The creditors of Moon Ltd.
included Rs. 4,000 payable to Sun Ltd. for goods supplied by that
company. The stock of Moon Ltd. included goods of the value of
Rs. 1,600 which were supplied by Sun Ltd. at a profit of on cost.
The balance on Profit and Loss Account of the Moon Ltd. as on
1st Jan. 2013 was Rs. 4,000 and on General Reserve Rs. 10,000.
OR
X Ltd. and Y. Ltd. agreed to amalgamate and formed a New
Company with on authorized capital of Rs. 00,000 divided into
Equity Shares of Rs. 10 each. On the date of amalgamation the
Balance-Sheet of the two companies were as under.
10
Balance Sheet
Liabilities
X Ltd.

Y Ltd.
Assets
X Ltd.

Y Ltd.

Equity Share
Capital of Rs.
10 each 1,00,000 70,000 Sundry Assets 1,20,000 62,000
Reserve Fund 8,000 5,500 Property 30,000
Profit and Loss
A/c 22,000 15,000 Debtors 40,000 45,000
Debentures 50,000 Stock 10,000 7,500
Creditors 24,500 30,000 Bank 10,000 10,000
Provided Fund 5,500 4,000
2,10,000 1,24,500 2,10,000 1,24,500
The purchase price-consisted of:
1. The assumption of the liabilities of both the companies.
2. The discharge of debentures in X Ltd. at a premium of 10% by
the issue of debentures in New Company.
3. The issue at a premium of Rs. 5 per share of Equity Shares of Rs.
10 each in New company.
For the purpose of amalgamation the assets are revalued as under:
X Ltd.

Y Ltd.

Sundry Assets 1,40,000 65,000
Property 50,000
Debtors 35,000 40,000
Stock 8,000 8,000
Goodwill 10,000 7,000
You are required to:
1. Calculate Purchase Price.
2. Write up Realization Shareholders A/c and New Company
A/c in the books of both the companies.
Page 3 of 4
SLR-Q-26
Q.5 From the information given below, Prepare 'Dairy and
'Poultry and Profit and Loss A/c for the year ended
31.3.2015
10
Debit Rs. Credit Rs.
Opening Stock: Sales:
Cattle 50,000 Cattle 30,000
Cattle Food 8,000 Poultry 18,000
Poultry 10,000 Butter 2,000
Poultry Food 1,500 Milk 10,000
Purchases: Eggs 15,000
Poultry 25,000 Closing stock:
Cattle 35,000 Cattle 65,000
Cattle Food 15,000 Cattle Food 9,000
Poultry Food 5,000 Poultry 20,000
Expenses: Poultry Food 2,500
Wages 12,000
Insurance 1,000
Depreciation 1,500
Repairs 1,500
Proprietor consumed the following products:
Butter Rs. 500, Milk Rs. 3,600
Eggs Rs. 800 Poultry Rs. 500
OR
The Engineering Company Limited sells its business to the
Scientific Company Ltd. on 31st December 2012 on which
date its Balance -Sheet was as follows.
Balance-Sheet
10
Liabilities Rs. Assets Rs.
Paid up capital 2000
shares of Rs. 100
each 2,00,000
Goodwill
Freehold property
Machinery
Stock
Bills Receivable
Sundry Debtors
Cash at bank
50,000
1,50,000
83,000
35,000
4,500
27,500
50,000
100 Debentures of
Rs.1,000 each 1,00,000
Sundry Creditors 30,000
Reserve Fund 50,000
Profit Loss Accounts 20,000
4,00,000 4,00,000
The Scientific Company Ltd., agreed to take over the assets
(Exclusive of cash and goodwill) at 10% less than the books values,
to pay Rs. 75,000 for goodwill and to take over the Debentures.
The purchase consideration was to be discharged by the
allotment to the Engineering Company Ltd., of 1500 shares of Rs.
100 each at a premium of Rs. 10 per share and the balance in cash.
The cost of liquidation expenses amounted to Rs. 3,000 borne by
the Engineering Company Ltd.
Prepare necessary accounts in the books of Engineering
Company Ltd. recording the above transactions.