DISTANCE EDUCATION
B.B.A. (CS)/B.B.A. (Lateral) DEGREE EXAMINATION,
DECEMBER 2017.
ADVANCED ACCOUNTANCY
(2005 onwards)
Time Three hours Maximum 100 marks
PART A — x 8 40 marks)
Answer any FIVE questions.
1. A and B were in partnership and agreed to dissolve. The
assets realised Rs. 75,000. The liabilities were: Sundry
creditors Rs. 45,000. Loan from A Rs. 20,000; Capitals A
Rs. 10,000; B Rs. 15,000. The profit sharing ratio A and B
was 3 :1. Show the Realisation account.
2. A and B are partners sharing profits in the ratio of 3 2.
On June 30, 2007, their Balance sheet showed the
following
Capital Rs. 50,000
Capital Rs. 40,000
Reserve Rs. 20,000
A died on 1st October 2007. His heirs were entitled to
His share of goodwill worth Rs. 40,000.
Interest on capital at 20% pa.
His share of reserve.
The firm has taken a joint life policy of Rs. 50,000.
A withdrew Rs. 5,000. Show the capital account to
ascertain the amount payable to his heirs.
Sub. Code
24
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3. The share capital of ABC Ltd. consists of:
1,00,000 equity shares of Re. 1 fully paid and 50,000
Redeemable preference shares of Re. 1 each fully paid.
The company had a credit balance of Rs. 80,500 in Profit
and Loss account and Rs. 50,000 in General Reserve.
The company resolved to:
Redeem Preference shares at 10% premium.
Issue Rs.30,000 equity shares at 15% premium to
provide part of the funds necessary for the
redemption of preference shares.
Make a bonus issue of one share for every two held
by the existing equity shareholder from General
Reserve. Journalise.
4. Gowtham Ltd issued 15,000 debentures of Rs. 100
each at a discount of payable after 5 years at a
premium of 5%. Show journal entries at the time of issue
and redemption of debentures.
5. A fire occurred at the premises of a trader on 31.5.94
destroying a greater part of his goods. His stock at 1.1.94
was Rs. 60,000. The value of stock salvaged was
Rs.13,500. The gross profit on sales was 30% and sales
amounted to Rs.1,53,000 from January to date of fire,
while for the same period, the purchases amounted to
Rs. 1,03,500. Prepare a statement of claim.
6. What are the different methods of calculating purchase
consideration?
7. Draw a specimen form of a Balance Sheet of a Public
Limited Company.
8. What is meant by profit prior to incorporation? How is
this profit ascertained and treated in the books of
accounts of a company?
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PART B — × 15 60 marks)
Answer any FOUR questions.
9. Mohan company Ltd. was incorporated on 30th June
2014 to take over the business of Mr. K. Mohan as from
1st January 2014. The financial accounts of the business
for the year ended 31st December 2014 disclosed the
following information
Sales Rs. Rs.
January to June 1,20,000
July to December 1,80,000 3,00,000
Less Purchases
January to June 75,000
July to December 1,20,000 1,95,000
Gross Profit 1,05,000
Less
Salaries 15,000
Selling expenses 3,000
Depreciation 1,500
Directors Remuneration 750
Debenture Interest 90
Administration expenses
(Rent, Rates etc.) 4,500 24,840
Profit for the year 80,160
You are requested to prepare a statement apportioning
the balance of profit between the periods prior to and
after incorporation and show the profit and loss
appropriation account for the year ended 31st December
2014.
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10. The following is the Balance Sheet of A company Ltd. as
on 31.3.2014.
Liabilities Rs. Assets Rs.
12,000 shares of Goodwill 10,000
Rs. 10 each 1,20,000 Machinery 90,000
Profit prior to
incorporation
2,000 Furniture 15,000
Bank overdraft 36,000 Stock 40,000
Sundry creditors 30,000 Sundry Debtors 22,000
Profit and Loss
a/c
11,000
1,88,000 1,88,000
B company Ltd. took over the assets of A company Ltd.
for Rs. 1,20,000 payable as to half in fully paid shares
and half in cash. The expenses of liquidation were
Rs. 3,000. A creditor for Rs. 5,000 agreed to take shares
in B Company Ltd. The available cash was just sufficient
to satisfy the claims of creditors.
Give journal entries in the Books of company Ltd. and
to record the journal entries in the Books of company
Ltd.
11. The directors of departmental stores Ltd wish to
ascertain approximately the net profits of B and C
departments separately for the quarter ended 31st March
2013. It is found impracticable actually to take stock on
that date but an adequate system of departmental
account is in use and the normal rates of gross profit for
the departments concerned are 30% and 20% on
sales respectively. Indirect expenses are charged in
proportion to departmental sales.
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Particulars are as follows
Departments
A
Rs.
B
Rs.
C
Rs.
Stock 30,000 35,000 15,000
Purchases to March 31,2013 35,000 37,500 23,500
Sales to March 31,2013 60,000 50,000 30,000
Direct expenses 10,100 7,250 3,550
Total indirect expenses for the period (including those
relating and other departments) were Rs. 21,000 on total
sales of Rs. 4,20,000.
Prepare a statements showing gross profit, net profit
after making reserve for stock at 10% in respect of each
department.
12. Give journal entries for issue of 1,000, debentures of
Rs. 100 each under the following conditions
Issued at par and redeemable at par.
Issued at discount and redeemable at par.
Issued at premium and redeemable at par.
Issued at par and redeemable at 10% premium.
Issued at discount and redeemable at 10%
premium.
Issued at premium and redeemable at 10%
premium
13. State and accounting entries made in case of dissolution
of a partnership.
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14. Ravi took a colliery on lease. The dead rent was Rs. 750 a
year, merging into a royalty of 35 paise per tonne of coal
raised, with the right to recover short workings out of
royalties of two subsequent years from the period in
which the short workings arose. The output raised were
I year 1,000 tonnes
II year 1,500 tonnes
III year 2,500 tonnes
IV year 1,500 tonnes
V year 1,000 tonnes
Give necessary ledger A/c s for each of the five years in
the books of Ravi.
15. R and S were in partnership sharing profits at 2:1
respectively. The following were found in their books on
the dissolution data
Particulars Rs.
Goodwill 30,000
Furniture 6,600
Investments 12,000
Stock 21,000
Debtors 40,000
Bank overdraft 2,000
Creditors 25,000
capital 40,000
capital 20,000
The stock realised 75% of its book value and debtors
Rs. 28,000. Furniture realised Rs. 7,000. Goodwill was
held worthless. R took over investments for Rs. 15,000.
Prepare realisation cash A/c and Capital A/c.