Full Text Transcript
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~1AY 2010 GROUP-I PAPBR-1
Roll No ,...............
ACCOUNTING
Total No. of Questions~6] [Total No. of Printed Pages~8
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Time Allowed~3 Hours Maximum Marks~100
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All questions are compulsory.
Wherever necessary suitable assumptions may be made by the candidates.
Working notes should form part of the answer.
Marks
1. (i) A and B are partners in a firm sharing profits and losses in the ratio of 10x2
3 : 2. Their capitals are Rs. 60,000 and Rs. 40,000 respectively. They admit =20
C as a new partner who will get 1/6th share in the profit of the firm. C brings
in Rs. 25,000 as his capital. Find out the amount of goodwill on the basis of
the above information.
(ii) From the following, calculate the cash price of the asset:
Rs.
Hire purchase price of the asset 50,000
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Down payment 10,000
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Four annual instalments at the end of each year 10,000
Rate of Interest '5% p.a.
(iii) Mr. X purchased 1,000, 6% Government Bonds ofRs. 100 each on 31st January,
2009 at Rs. 95 each. Interest is payable on 30th June and, 31st December. The
price quoted is cum interest. Journalise the transaction.
(iv) Swaminathan owed to Subramanium the following sums:
-- Rs. 5,000 on 20th January, 2009
Rs. 8,000 on 3rd March, 2009
Rs. 6.,000 on 5th April, 2009
Rs. 11,000 on 30th April, 2009
Ascertain the average due date.
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(.v) A company acquired a machine on 1.4.2006 for Rs. 5,00,000. The company
charged depreciation upto 2008-09 on straight line basis wi!h estimated working
life of 10 years and scrap value of Rs. 50,000. From 2009-10; the company
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decided to change depreciation method at 20% on reducing balance met12od.
Compute the amount of depreciation to be debited to Profits and Loss Alc for
the year 2009-10.
(vi) An unquoted long-term investment is carried in the books at cost of Rs. 2 lac.
The published accounts of unlisted company received in May, 2009 showed
that the company has incurred cash losses with decline market share and the
long-term investment may not fetch more than Rs. 20,000. How you will deal
with it in the financial statement of investing company for the year ended
31.3.2009.
(vii) In the absence of a partnership deed, what will be your decision in disputes
amongst partners regarding the following matters:
(a) Profit sharing ratio;
(b) Interest rate at which interest is to be allowed to a partner on loan given
to the firm by a partner.
(viii) According to Accounting Standard-9, when revenue from sales should be
recognised ?
(ix) In January, 2010 a firm took an insurance policy for RE;.60'lakhs to insure
goods in its godown against fire subject to average clause. On 7th March,
2010 a fire broke out destroying goods costing Rs. 44 lak~s. Stock in the
godown was estimated at Rs. 80 lakhs. Compute the amount of insurance
claim.
(x) ,On 1st April, 2009 a car company sold to Arya Bros., a motor car on hire-
purchase basis. The total hire-purchase price was Rs. 4,60,000 with down
payment of Rs. 1,60,000. Balance amount was to be paid in three annual
instalments of Rs. 1,00,000 each. The first instalment payable on 31st March,
2010. The cash price of the car -was Rs. 4,00,000.
How will Arya Bros. account for interest over three accounting years assuming
books of accounts are closed on 31st March every year.
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2. The J:>ooksof account of Ruk Ruk Maan of Mumbai showed the following figures:
31.3.2008 31.3.2009
Rs. Rs. . ..
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Furniture & Fixtures 2,60,000 2,34,000
Stock 2,45,000 3,20,000
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Debtors 1,25,000
Cash in hand & Bank 1,10,000 ?
Creditors 1,35,000 1,90,000
Bills Payable 70,000 80,000
Outstanding Salaries 19,000 20,000
An analysis of the cash book revealed the following:
Rs.
Cash sales 16,20,000
Collection from debtors 10,58,000
Discoupt allowed to debtors 20,000
Cash purchases 6,15,000
Payment to Creditors 9,73,000
Discount received from creditors 32,000
Payment for bills payable 4,30,000
Drawings for domestic expenses 1,20,000
Salaries paid 2,36,000
Rent paid 1,32,000
Sundry trade expenses 81,000
Depreciation is provided on furniture & fixtures @10% p.a. on di'minishing balance
method. Ruk Ruk Maan maintains a steady gross profit rate of 25% on sales.
You are required to prepare trading and profit and loss account for the year ended
31st March, 2009 and Balance Sheet as on that date.
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3. Tl}e Balance Sheet of Reckless Lt~. as on 31st March, 2008 is as follows: 16
Assets Rs.
Freehold Premises 2,20,000 4
Machinery 1,77,000
Furniture & Fittings 90,800
Stock 3,87,400
Sundry Debtors 80,000
Less: Provision for Bad Debts 4,000 76,000
Cash in Hand 2,300
Cash at bank 1,56,500
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Bills Receivable 15,000
11,25,000
Liabilities
60,000 Equity Shares of Rs. 10 each. 6,00,000
Prior Incorporation profit 21,000
Contingency Reserve 1,35,000
Profit & Loss Appropriation Account 1,26,000
Acceptances 20,000
Creditors 1,13,000
Provision for Income-tax 1,10,000
11,25,000
Careful Ltd. decided to take over Reckless Ltd. from 31st March,- 2008 with the
following assets at value noted against them:
Bills Receivable 15,000
Freehold Premises 4,00,000
Furniture and Fittings 80,000
Machinery 1,60,000
Stock 3,45,000
1/4 of the consideration was satisfied by the allotment of fully paid preference
share of Rs. 100 each at par which carried 13% dividend on cumulative basis. The
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balance was paid in the form of Caref~l Ltd.'s equity shares of Rs. 10 each,
Rs. 8 paid up.
Sundry Debtors realised Rs. 79,500. Acceptances were settled for Rs. 19,000. Income- 4
tax authorities fixed the taxation liability at Rs. 1,11,600. Creditors were finally
settled with the cash remaining after meeting liquidation expense amounting to
Rs. 4,000.
You are required to :
(i) Calculate the number of equity shares and preference shares to be allotted by
Careful Ltd. in discharge of consideration.
(ii) Prepare the important ledger accounts in the books of Reckless Ltd.; and
(iii) Pass Journal entries in the books of Careful Ltd. with narration.
4: (a) Easilife Ltd. has a hire-purchase department which fixes hire-purchase price 10
by adding 40% to the cost of the goods. The following additional information
is provided to you:
Rs.
On 1st April, 2009 :
Goods out on hire-purchase (at hire-purchase price) 2,10,000
Instalments due 14,000
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Transactions during the year:
.
Hire-purchase price of goods sold 9,80,000
Instalments received 8112,000
Value of goods repossessed due to defaults
(hire-purchase instalments unpaid Rs. 5,600) 7,800
On 31st March, 2010 :
Goods out on hire-purchase (at hire-purchase price) 3,78,000
You are required to prepare Hire-purchase Trading Account, ascertaining the
profit made by the department during the year ended 31st March, 2010.
(b) Gamma Investment Company hold 1,000, 15% debentures of Rs. 100 each in 6
Beta Industries Ltd. as on April 1, 2009 at a cost of Rs. 1,05,000. Interest is
payable on June, 30 and December, 31 each year.
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On May 1, 2009, 500 debentures a,re purchased cum-interest at Rs. 53,500.
On November 1, 2009 600 debentures are sold ex-interest at Rs. 57,300. On
November 30, 2009, 400 debentures are purchased ex-interest at Rs. 38,400.
On December 31, 2009, 400 debentures are sold cum-interest for Rs. 55,000. 4
Prepare the investment account showing value of holdings on March 31, 2010
at cost, using FIFO method.
5. (a) On the basis of the following informations, prepare Income and Expenditure 8
Account for the year ended 31st March, 2010 :
Receipts and Payments Account for the year ended 31st March, 2010
Receipts Rs. Payments Rs.
To Cash in hand (opening) 1,300 By Salaries 2,58,000
To Cash at Bank (opening) 3,850 By Rent 71,500
To Subscriptions 4,94,700 By Printing & Stationery 3,870
To Interest on 8% Govt. Bonds 4,000 By Conveyance 10,600
To Bank Interest 160 By Scooter purchased 50,000
By 8% Govt. Bonds 1,00,000
By Cash in hand
(closing) 840
By Cash at Bank
(closing) 9,200
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5,04,010 5,04,010
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(i) Salaries paid includes Rs. 6,000 paid in advance for April, 2010. Monthly
salaries paid were Rs. 21,000.
.
(ii) Outstanding rent on 31st March, 2009 and 31st March, 2010 amounted
to Rs. 5,500 and Rs. 6,000 respectively.
(iii) Stock of printing and stationery material on 31st March; 2009 was Rs. 340;
it was Rs. 365 on 31st March, 2010.
(iv) Scooter was purchased on 1st October, 2009. Depreciation @ 20% per
annum is to be provided on it.
(v) Investments were made on 1st April, 2009.
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(vi) Subscriptions due but not received on 31st March, 2009 and 31st March,
2010 totalled Rs. 14,000 and Rs. 12,800 respectively. On 31st March,
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2010 subscriptions amounting to Rs. 700 had been received in advanc~
for April, 2010.
(b) The following particulars relate to Bee Ltd. for the year ended 31st March, 8
2010 :
(i) Furniture of book value of Rs. 15,500 was disposed off for Rs. 12,000.
(ii) Machinery costing Rs. 3,10,000 was purchased and Rs. 20,000 were spent
'on its erection.
(iii) Fully paid 8% preference shares of the face value of Rs. 10,00,000 were
redeemed at a premium of 3%. In this connection 60,000 equity shares
of Rs. 10 each were issued at a premium of Rs. 2 per share. The entire
money being received with applications.
(iv) Dividend was paid as follows:
On 8% preference shares Rs. 40,000
On equity shares for the year 2009-10 Rs. 1,10,000
(v) Total sales were Rs. 32,00,000 out of which cash sales were Rs. 11,50,000.
(vi) Total purchases were Rs. 8,00,000 including cash purchase of Rs. 60,000.
(vii) Total expenses were Rs. 12,40,000.
(viii) Taxes paid including dividend tax of Rs. 22,500 were Rs'. ~,30,000.
(ix) Cash and cash equivalents as on 31st March, 2010 were Rs. 1,25,000.
You are requested to prepare Cash Flow Statement asperAS~3 for the year
ended 31st March, 2010 after taking into consideration the following also: .
On 31st March, 2009 On 31st March, 2010
Rs. Rs.
Sundry debtors 1,50,000 1,47,000
Sundry creditors 78,000 83,000
Unpaid expenses 63,000 55,000
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6. Answer the following: 4x4=16
(a) Weak Ltd. acquired the fixed assets of Rs. 100 lakhs on which it received the
grant of Rs. 10 lakhs. What will be the cost of the fixed assets as per AS-12
and how it will be disclosed in the financial statements. .. . ~ I
(b) During the current year 2009-10 MIs L & C Ltd. made the following expenditure
relating to its plant and machinery:
Rs.
General repairs 4,00,000
Repairing of Electric M;otors 1,00,000
Partial Replacement of parts of Machinery 50,000
Substantial improvements to the electrical wiring system
which will increase efficiency of the plant and machinery 10,00,000
What amount should be capitalised according to AS-10 ?
(c) What are the advantages of pre-packaged accounting software?
(d) Raw materials inventory of a company includes certain material purchased at
Rs. 100 per kg. The price of the material is on decline and replacement cost
of the inventory at the year end is Rs. 75 per kg. It is possible to convert the
material into finished product at conversion cost of Rs. 125.
Decide whether to make the product or not to make the product, if selling
price is (i) Rs. 175 and (ii) Rs. 225. Also find out the value ofinveptory in each
case.
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