The Institute of Chartered Financial Analysts of India University 2006 PE- II Accountancy - Question Paper
CA PE - II:: Accounting : November
Roll No.....................
Total No. of Questions 6] [Total No. of Printed Pages5
Time Allowed : 3 Hours Maximum Marks : 100
Answers to questions are to be given only in English except in the cases of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi
will not be valued.
Answer all Questions
Wherever appropriate suitable assumptions should be made by the candidate.
Working notes should form part of the answer.
Marks
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1. The following is the Balance Sheet of A Ltd. as at 31 st March, 2006: 20 | ||||||||||||||||||||||||||||
|
|
Misc. |
34,000 | |
|
17,60,000 |
Expenses |
17,60,000 |
(1) B Ltd. would take over all Assets, except bank balance at their book values less 10%. Goodwill is to be valued at 4 years purchase of superprofits, assuming that the normal rate of return be 8% on the combined amount of share capital and general reserve.
(2) B Ltd. is to take over creditors at book value.
(3) The purchase consideration is to be paid in cash to the extent of Rs.6,00,000 and the balance in fully paid equity shares of Rs.100 each at Rs.125 per share.
The average profit is Rs. 1,24,400. The liquidation expenses amounted to Rs.16,000. B Ltd. sold prior to 31st March, 2006 goods costing Rs. 1,20,000 to A Ltd. for Rs. 1,60,000. Rs. 1,00,000 worth of goods are still in stock of A Ltd. on 31st March, 2006. Creditors of A Ltd. include Rs.40,000 still due to B Ltd.
Show the necessary Ledger Accounts to close the books of A Ltd. and prepare the Balance Sheet of B Ltd. as at 1st April, 2006 after the takeover.
2. X and Y carrying on business in partnership sharing Profit and Losses 16
equally, wished to dissolve the firm and sell the business to X Limited Company on 31-3-2006, when the firms position was as follows:
|
Liabilities |
Rs. |
Assets |
Rs. |
|
Xs Capital |
1,50,000 |
Land and |
1,00,000 |
|
Ys Capital |
1,00,000 |
Building |
40,000 |
|
Sundry |
60,000 |
Furniture |
1,00,000 |
|
Creditors |
Stock |
66,000 |
|
Debtors |
4,000 | |
|
3,10,000 |
Cash |
3,10,000 |
The arrangement with X Limited Company was as follows:
(i) Land and Building was purchased at 20% more than the book value.
(ii) Furniture and stock were purchased at book values less 15%.
(iii) The goodwill of the firm was valued at Rs.40,000.
(iv) The firms debtors, cash and creditors were not to be taken over, but the company agreed to collect the book debts of the firm and discharge the creditors of the firm as an agent, for which services, the company was to be paid 5% on all collections from the firms debtors and 3% on cash paid to firms creditors.
(v) The purchase price was to be discharged by the company in fully paid equity shares of Rs.10 each at a premium of Rs.2 per share.
The company collected all the amounts from debtors. The creditors were paid off less by Rs. 1,000 allowed by them as discount. The company paid the balance due to the vendors in cash.
Prepare the Realisation account, the Capital accounts of the partners and the Cash account in the books of partnership firm.
3. The following are the summarized Balance Sheets of X Ltd. as on March 31, 16
|
>5 and 2006: Liabilities |
As on |
As on |
|
31.3.2005 |
31.3.2006 | |
|
(Rs.) |
(Rs.) | |
|
Equity share capital |
10,00,000 |
12,50,000 |
|
Capital Reserve |
10,000 | |
|
General Reserve |
2,50,000 |
3,00,000 |
|
Profit and Loss A/c |
1,50,000 |
1,80,000 |
|
Long-term loan from the 5,00,000 |
4,00,000 | |
|
Bank |
5,00,000 |
4,00,000 |
|
Sundry Creditors |
50,000 |
60,000 |
|
Provision for Taxation 1,00,000 |
1,25,000 | |
|
Proposed Dividends |
25,50,000 |
27,25,000 |
|
Assets |
Year |
Year |
|
2005 |
2006 | |
|
(Rs.) |
(Rs.) | |
|
Land and Building |
5,00,000 |
4,80,000 |
|
Machinery |
7,50,000 |
9,20,000 |
|
Investment |
1,00,000 |
50,000 |
|
Stock |
3,00,000 |
2,80,000 |
|
Sundry Debtors |
4,00,000 |
4,20,000 |
|
Cash in Hand |
2,00,000 |
1,65,000 |
|
Cash at Bank |
3,00,000 |
4,10,000 |
|
25,50,000 |
27,25,000 | |
Additional Information:
(i) Dividend of Rs. 1,00,000 was paid during the year ended March 31, 2006.
(ii) Machinery during the year purchased for Rs. 1,25,000.
(iii) Machinery of another company was purchased for a consideration of Rs. 1,00,000 payable in equity shares.
(iv) Income-tax provided during the year Rs.5 5,000.
(v) Company sold some investment at a profit of Rs.l0,000, which was credited to Capital reserve.
(vi) There was no sale of machinery during the year.
(vii) Depreciation written off on Land and Building Rs.20,000.
From the above particulars, prepare a cash flow statement for the year ended
March, 2006 as per AS 3 (Indirect method).
(a) The life fund of Well-Life Assurance Co. was Rs.90,00,000 as on 31st December, 2005. The interim bonus paid during the valuation period was Rs.l,50,000. The periodical actuarial valuation determined the net liability at Rs.75,00,000. Surplus brought forward from the previous valuation was Rs.9,00,000. The directors of the company proposed to carry forward Rs.l0,00,000 and to divide the balance between the shareholders and the
policy holders. You are required to show:
(i) The valuation Balance Sheet.
(ii) The Net Profit for the valuation period.
(iii) The distribution of the surplus.
(b) The following is an extract from the Trial Balance of Dream Bank Ltd. as at 31st March, 2006:
Rebate on bills discounted as on 1-4-2005 68,259 (Cr.)
Discount received 1,70,156 (Cr.)
Analysis of the bills discounted reveals as follows:
Amount (Rs.) Due date
2.80.000 June 1, 2006
8.72.000 June 8, 2006
5.64.000 June 21, 2006
8.12.000 July 1, 2006
6,00,000 July 5, 2006
You are required to find out the amount of discount to be credited to Profit and Loss account for the year ending 31st March, 2006 and pass Journal Entries. The rate of discount may be taken at 10% per annum.
Mr. Ashok keeps his books in Single Entry system. From the following information, prepare Trading and Profit & Loss Account for the year ended 31st March, 2006 and the Balance Sheet as on that date:
|
Assets and Liabilities |
31.3.2005 |
31.3.2006 |
|
(Rs.) |
(Rs.) | |
|
Sundry Creditors |
30,000 |
25,000 |
|
Outstanding expenses |
1,000 |
500 |
|
Fixed Assets |
23,000 |
22,000 |
|
Stock |
16,000 |
22,500 |
|
Cash in Hand and at Bank |
14,000 |
16,000 |
|
Sundry Debtors |
? |
36,000 |
|
Following further details are |
available for the Current year: | ||
|
Rs. |
Rs. | ||
|
Total receipts from |
1,30,000 |
Cash purchases |
2,000 |
|
debtors a |
3,000 |
Fixed Assets | |
|
Returns inward |
purchased and |
1,000 | |
|
1,000 |
paid by cheque |
6,500 | |
|
Bad Debts |
1,50,000 |
Drawings by |
10,000 |
|
Total Sales |
1,500 |
cheques |
18,500 |
|
Discount received |
1,000 |
Deposited into the |
2,500 |
|
Return outwards |
15,000 |
bank |
1,20,000 |
|
Capital introduced (paid |
1,25,000 |
Withdrawn from |
20,000 |
|
into Bank) |
bank | ||
|
Cheques received from |
Cash in hand at the | ||
|
end | |||
Debtors Paid to creditors by
cheques Expenses paid
6. Answer any four of the following:
(a) What are the costs that are to be included in Research and Development costs as per AS 8.
(b) The Company reviewed an actuarial valuation for the first time for its Pension Scheme, which revalued a surplus of Rs.12 lacs. It wants to spread the same over the next 2 years by reducing the annual contribution to Rs.4 lacs instead of Rs.10 lacs. The average remaining life of the employees, if estimated to be 6 years, you are required to advise the Company considering the accounting standards 5 and 15.
(c) X Ltd. entered into an agreement to sell its immovable property included in the Balance Sheet at Rs.10 lacs to another company for Rs.15 lacs.
The agreement to sell was concluded on 28th February, 2006 and the sale deed was registered on 1st May, 2006. Comment with reference to AS 4.
(d) What are the conditions that are to be satisfied for Amalgamation in the nature of Merger?
(e) Write short note on Appropriation Act with reference to Government Accounts.
(f) Define related party transaction under AS 18.
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Attachment: |
| Earning: Approval pending. |
