Veer Narmad South Gujarat University 2011-2nd Year B.Com Accounting & Taxation, ,- , Veer Narmad South University - Question Paper

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ENGLISH VERSION

Instructions : (1) As per the instruction no. 1 of page no. 1.

(2)    Q. No. 1 is compulsory carrying 10 marks.

(3)    Remaining questions carry equal marks.

1 (a) Shri Pinto (Foreign citizen) though employed in a foreign country has frequently visited India for companys work as stated below :

Previous Year    No. of days stayed

2004-05    183

2005-06    209

2006-07    205

2007-08    265

2008-09    44

2009-10    67

Determine his residential status for the assessment year

2010-11.

Ku. Ganga sold her own gold at Rs. 24,30,000 on 01.10.09. In 1982-83 the cost of gold purchased was Rs. 1,79,850. She paid brokerage of Rs. 30,000. She purchased a house at Rs. 18,00,000 on 01.02.10. Cost index

1982-83 ................... 109

2009-10 ...................632

Determine taxable and taxfree capital gain.

Ku. Janelia sold 10% Government securities at Rs. 105 on 31.08.09. The cost of sold securities was Rs. 50,000 and face value Rs. 48,000. Securities were sold ex-dividend. The last interest on securities was received on 31.05.09. The rate of brokerage is 1%.

Write journal entry.

(e) Cash purchase.................................................1,500

The rate of profit 20% on cost find out credit purchase.

Purchase of Land and Building (01.10.09)................ 25,000

Stock purchased (35% of total purchase)................... 52,500

Stock sold (40% of total sale)...................................... 90,000

Dividend received............................................................ 7,500

Administrative expenses.................................................8,250

Withdrawal (Rs. 1000 on first day of each month)....... 12,000

Additional Information :    Rs.

Bills payable accepted.................................................. 10,000

Bills receivable received............................................... 20,000

Bad debts......................................................................... 1,500

Bad debts reserves..........................................................3,500

The rate of gross profit at 40% on sale. Calculate 5% on capital and 10% on withdrawals.

Calculate depreciation at 4% on Land and Building and 10% on Furniture.

Provide 2% discount reserve on creditors.

OR

10

2 Ascertain the value of goodwill of the IC Ltd. carrying on business

The company commenced operations in 1994 with a paid up capital of Rs. 2,50,000. Profit (after taxation) have been as follows for the

recent years :

Year ending 31^st March    Rs.

200 7.......................................................20,000 (Loss)

200 8.......................................................44,000

200 9.......................................................51,500

201 0.......................................................58,500

201 1.......................................................65,000

The loss in 2006-07 occurred due to a prolonged strike. Income-tax paid so far has been at the average rate of 40% but is likely to be 50% from now onwards. Dividends were distributed at the rate of 10 percent in 2007-08 and 2008-09 and at the rate of 15 percent on the paid up capital in 2009-10 and 2010-11. The market price of the share is rolling at the end of the year ended 31^st March, at Rs. 125. Profit still 2010-2011 have been ascertained after debiting Rs. 20,000 as remuneration to the manager. The company has approved a remuneration of Rs. 30,000 with effect from 1^st April, 2009. The company has been able to secure a contract for supply of materials at advantageous prices. The advantage has been valued at Rs. 20,000 per annum for the next five years.

From the above particulars, compute the value of goodwill at three year purchase of super profit.

Stock is calculated by LIFO method.

Prepare 6% Government Securities a/c from the above transactions.

OR

The company transfers 20% of its profits (after tax) to General Reserve. Net profits before taxation for the last three years have been as follows :

Rs.

For the year ended 31^st March, 2008 .....................2,76,000

For the year ended 31^st March, 2009 .....................3,94,000

For the year ended 31^st March, 2010 .....................3,66,000

Machinery is valued at Rs. 3,20,000 Average yield in this type of business is 20%

The rate of tax is 50%

Calculate the value of one equity share on the basis of

(i)    intrinsic worth,

(ii)    yield

(b) From the following data, compute Net Assets value of each category of equity shares of Taj Ltd. :

Shareholders funds

10.000    A Equity shares of Rs. 100 each, fully paid

10.000    B Equity shares of Rs. 100 each, Rs. 80 paid

10.000    C Equity shares of Rs. 100 each, Rs. 50 paid Retained earnings Rs. 9,00,000

4 Ku. Ankita gives the following particulars :

Other Information :

(1)    Fair market value of assets as on 01.04.81 was as under :

Rs.

Jewellery.......................................................4,00,000

Urban Land................................................... 40,000

Residential House .......................................4,00,000

(2)    Shares of RIL are liable for S.T.T.

(3)    Rs. 70,000 were invested in three years bond of NHAI from the sales proceeds of Jewellery.

(4)    Cost inflation index number.

1981-82 100 1990-91 182 2004-05 480 2009-10 632 1984-85 125 2001-02 426 2006-07 519

(5)    During financial year 2004-05 expenditure paid for additional construction in such house was Rs. 1,20,000.

(6)    A new house is purchased after selling the old residential house.

Compute taxable capital gain.

OR

4 Chulbul Pandy uses all the four houses owned by him for self residential purpose only. The details relating to there houses are given below :    (in Rs.)

For the assessment year 2009-10 the house No. 3 was selected as actually self occupied house by the assessee and other houses were taken as deemed letout house.

For the assessment year 2010-11 the assessee wants to take a decision to select any one house as actually self occupied house for the income-tax purpose. You have to assess all possible alternatives and then to compute his taxable income under the head income from house property.

5 Shri Vijayraj is a specified employee in Surat. Calculate taxable

income of salary and total taxable income from the following

particulars for the assessment year 2010-11.

(1)    He joined in the grade of Rs. 14,000 - 1,000 - 20,000-2,GOO-

36,000 on 01.01.04.

(2)    D.A. 30% of basic salary.

(3)    Bonus Rs. 50,000.

(4)    Entertainment allowance Rs. 2,000 per month.

(5)    Transport allowance Rs. 1,000 per month.

(6)    Education allowance Rs. 8,400 for three children and hostel allowance Rs. 8,600 for one child.

(7)    He contributes in recognised provident fund 15%. The company also contributes the same amount.

(8)    Interest credited to recognised provident fund at 14% amounts to Rs. 28,000.

(9)    Medical allowance Rs. 1,000 per month.

(10)    The company has paid Rs. 25,000 for compensation of injuries occured during the office hours.

(11)    The company has paid Rs. 19,810 for members of familys medical treatment.

(12)    He has been provided a residential accommodation for that the company pays rent of Rs. 5,000 per month. The company also provides furniture costing Rs. 40,000. The company deducts Rs. 2,000 per month from his salary.

(13)    During the year he has paid

Professional tax

Life Insurance Premium (Policy of Rs. 12,00,000) ..... 25,000

Contribution in P.P.F......................

Repayment of housing loan

(including interest of Rs. 2,000)

OR

5 (a) Up till June 30, 2009 X is in the employment of A Ltd.

On the fixed salary of Rs. 25,000 per month which becomes due on the first day of the next month. On July 1, 2009, X joins B Ltd. (Salary being Rs. 30,000 per month which becomes due on the last day of each month). Salary is actually paid on the seventh day of the next month in both cases, Find out the amount of salary chargeable to tax for the assessment year 2010-11.

(b)    Y, who is not covered by the payment of Gratuity Act, 1972, retires on November 20, 2009 from EC Ltd. And receives Rs. 1,87,000 as gratuity after service of 38 years and 10 months. His salary is Rs. 8,000 per month upto July 31, 2009 and Rs. 9,000 per month from August 1, 2009. Besides, he gets Rs. 500 per month as dearness allowances (69 percent of which is part of salary for computing retirement benefits). What amount of gratuity will be exempt from tax?

(c)    Compute the gross salary of Mr. Jay on the basis of the following information for the assessment year 2010-11 :

(1)    Basic pay Rs. 7,000 per month

(2)    Dearness allowance - 40% of basic pay

(3)    City compensatory allowance - 10% of basic pay

(4)    Medical allowance - Rs. 1,000 per month

(5)    Children education allowance - Rs. 80 per month per children for 3 children.

(6)    Hostel expenditure allowance - Rs. 400 per child per month for 2 children.

(7)    Travelling allowance Rs. 11,000 (However actual expenditure was only Rs. 8,000 for official duties).

(8)    Transport allowance Rs. 18,500.

6 Write short notes :

(a)    (1) Difference between single entry and double entry. 4

(2) Cum-interest and Ex-interest transactions.

(b)    Any two :    8

(1)    Tax free perquisites

(2)    Sec. 80 C

(3)    Provisions of Sec. 54, 54 EC and 54 F in connection to capital gain

(4)    Income tax officer.

SB-0406]    16    [ 12,300 ]