Tamil Nadu Open University (TNOU) 2009 M.Com Commerce Advanced financial accounting and accounting standards - Question Paper
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PG-219 MCO-3M.Com. DEGREE EXAMINATION -JUNE 2009.
(AY 2004-05 batch onwards) First Year ADVANCED FINANCIAL ACCOUNTING AND ACCOUNTING STANDARDS
Time : 3 hours Maximum marks : 75
PART A (3 x 5 = 15 marks)
Answer any THREE questions.
All questions carry equal marks.
1. Explain Rebate on Bills Discounted and how is it treated in Banking Company accounts.
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2. How will you value the shares of a company?
J0 |pZV ui@ VuiuukQpx?
3. The average capital employed by X Ltd. is Rs. 30,00,000 whereas net trading profits before tax for the last three years have been Rs. 14,60,000, Rs. 14,45,000 and Rs. 15,20,000. In these three years Managing Director was paid a salary of Rs. 5,000 p.m. but now he would be paid a salary of Rs. 7,500 pm. Nominal rate of return expected in the industry in which X Ltd. engaged is 20%. Rate of tax is 50%. Calculate the goodwill on the basis of two years purchase of super profits.
X |pzV ff@u@zuul@otot u .
30,00,000 <si_u p aiiflUs
wn'un'ij Cu pGw . 14,60,000 . 14,45,000, . 15,20,000 P
Gs CU{@ nu . 5,000 \uOT u B as u . 7,500
U u il Q\uuul_x. X |pzv
wn'un'ijZV1 OTVuUffiuk Cu Qu 20%
aifl Qu 50% OTUQffis C _ Cu
wuijzV {pQuwir <snUQ.
4. The following is the balance sheet of Weak Ltd. on
 |
|
1,00,000 Eq. shares of |
Amount
Assets
Land
1,00,000
Amount
Rs. 10 each fully paid 10,00,000 Plant & Machinery 2,30,000
1,73,000 Furniture & Fittings Stock
Sundry creditors
68,000
1,50,000
Liabilities
Amount
Assets
Debtors
Cash at bank
Amount
70,000
5,000
Profit and Loss a/c 5,50,000
11,73,000
11,73,000
The approval of the court was obtained for the following scheme of reconstruction :
(a) The equity shares to be reduced to Rs. 4 per share.
(b) Plant and Machinery to be written down to Rs.
1,50,000.
(c) Stock to be revalued at Rs. 1,40,000.
(d) The provision for bad and doubtful debts to be created Rs. 2,000.
(e) Land to be revalued at Rs. 1,42,000.
Pass the necessary journal entries to give effect to the above and prepare revised balance sheet after reconstruction.
Qupuq
| ||||||||||||||||||||||||||||
|
11,73,000 11,73,000 |
A|p <flJUL|<S0 }VPZV
juqu QupuumOTOTX
(a) uigarn 0. 4 ld<SUl @pU<suu_ Gas.
(B) CVZV Vuu 0. 1,50,000 <fiUL SpUauu_ Gas.
(C) ffijUg 0. 1,40,000 got pVu_ Gas.
(d) aijra<s_OT jx@ 0. 2,000. jxa Gas.
(e) | 0. 1,42,000 got pVu_ Gas.
G0tw uls GuaOT uVaOT u X UlUs eotot CUl | QffWffi.
5. In a company, A hold 100 shares of Rs. 10 each on which he has paid Re. 1 pre share as application money.
B hold 200 shares of Rs. 10 each on which he has paid Re. 1 on application and Rs. 2 on allotment money.
C hold 300 shares of Rs. 10 each on he has paid Re. 1 on application, Rs. 2 on allotment and Rs. 2 on first call.
They all failed to pay second call money of Rs. 2 and directors forefeit their shares. These shares of Rs. 10 were reissued subsequently for Rs. 11 per share as fully paid. Journalize the forfeiture and reissue transactions.
J0 A gliiit 100 uigffirn 0. 10 u
uig snuu un
0. 1 mk QffZVOTwnir.
B 200 uig<sOT 0. 10 u
x uig snuu un 0. 1 0p
0. 2 jxRmk un Q\ZV|OTottit.
C 300 uigsOT 0. 10 u
Ap x uig snuu un 0. 1 0. 2 jxURmk un 0p u Apui_| 0. 2 QffZVOTwnir.
A0 Apuq 0. 2 Qffipzuu
snnzu AffiOT uigsfflm jpupui_| Q\iLx AZX uigs 0. 10 QffipzV11 uigffiOTTffi 0. 11 Ug pQk Q\u. Jpupuq 0p pQk | guGuk uVsOT u0.
PART B (4 x 15 = 60 marks)
Answer any FOUR questions.
5 PG-219
|
6. The following is the balance sheet of D, E and F who were equal partners as on 1.6.2006. | ||||||||||||||||||||||||
|
They have agreed to take H into partnership and give him fourth share in the profits on the following terms :
(a) That H should bring in Rs. 9,000 for goodwill and Rs. 15,000 as capital.
(b) That one half of the goodwill shall be withdrawn by the old partners.
(c) That stock and furniture to be depreciated by 10%.
(d) That a liability of Rs. 1,080 be created against bills discounted.
(e) That the value of building should be valued as Rs.
27,000.
(f) That a provision of 5% on debtors be created for doubtful debts.
(g) The value of assets and liabilities other than cash are not be altered.
You are required to prepare profit and loss adjustment account and opening balance sheet of the firm as newly constituted.
Cu {L D, E, F
otOTuiiAOT 1.6.2006 Ap CUl|
Sui_| i3OT0rp,
| |||||||||||||||||||||
|
46,400 46,400 |
Au P TLrJm H otOTu {rOTQ J0 Cru uiQ Rp<srq |uuOT Guifl TLrS
G\ZX Q\u.
(a) H otOTuiit {0Qu0ffiffirs 0. 9,000 0p uOTra
0. 15,000 QffzU GiS@.
(B) {0QuiWlte J0 uiffi upw
gZx
(C) \ijffi0 0p otilkOI<sOT 10% Guwot Q\iLw Gis@.
(d) EiUs 0. 1,080 QupuL H0uzu
Gis@.
(e) sLiL 0. 27,000 got pVUi_Gis@.
(f) SLOTffiOT 5% \ljZX IUffiLOT x E0UffiuuL_x.
(g) Qijra<s 0p QffzX 0p QupuLOT 0p QffWTLFX-
CFZVOT QffiS TLLF0OT pVUL ffiwUg 0p C0UL | @ul Q\
ILffi.
7. White Ltd. agreed to acquire the business of Green Ltd. as on 31.12.2006 on which date the Balance Sheet of Green Ltd. was summarized as follows :
|
Liabilities |
Amount |
Assets |
Amount |
|
60,000 shares of Rs. 10 each fully paid |
0 0 ,0 0, ,0 6, |
Goodwill Land & Building |
1,00,000 3,00,000 |
|
General Reserve |
1,70,000 |
Plant & Machinery |
3,40,000 |
|
Profit and Loss account |
1,10,000 |
Stock |
1,68,000 |
|
6% Debentures |
1,00,000 |
Sundry Debtors |
56,000 |
|
Creditors |
20,000 |
Cash |
36,000 |
The consideration payable by White Ltd. was as follows :
(a) A cash payment of Rs. 2.50 for every shares in Green Ltd.
(b) The issue of 90,000 Rs. 10 shares at an agreed value of Rs. 12.50 per share.
(c) The issue of such an amount of fully paid 5% Rs. 100 debentures in White Ltd. at 96% as is sufficient to discharge the 6% debentures in Green Ltd. at a premium of 20%.
(d) The directors of White Ltd. valued Land and Building at Rs. 4,00,000 and created a provision of 5% on debtors against doubtful debts.
(e) The expenses of liquidation of Rs. 6,000 were paid by White Ltd.
Give journal entries to close the books of Green Ltd. and prepare necessary accounts to close the books.
jm |p 31.12.2006
Ap jui_|Q<smsi_x. Apw
m |pzV Cu_ ui_
Qi_ipi_ii_|
60,000 0. 10 {0Q_wit 1,00,000
Q\pZV _i@POT 6,00,000 | SLi_ 3,00,000
Q_X p__| 1,70,000 3,40,000
Ciu {ll p/s 1,10,000 pijUg 1,68,000
6% plot uzV 1,00,000 PLaiJam 56,000
pleGuht 20,000 QijiUp 36,000
10,00,000 10,00,000
jl |p QsiOTu puw
RpUffiSLpp Q<\pZu Juliu1 AZUX-
(a) RflOT |p uisui jQi00ffi0
0. 2.50 QffzU Gis@.
(b) 0- 10 Vulotot 90,000 ui0sOT 0. 12.50 ZV U Gis@.
(C) QflOT LOT 5% 0. 100 plot uZVlUiP Gffij Ci Qui 20% aZV QffZU JL lot 6% 0. 100 plot uzViOT 96% Vu QazU il Q\uullx.
(d) | 0p sLiL 0. 4,00,000 Ga p<fiuL Gis@ 0p ffiLaiJffim x 5% lUffiLOT jx@ Q\ ujiw Gis@.
(e) ffi0uL Q\| 0. 6,000 jl |p Q\zU julu AZUX-
CZVa QffiiS RflOT |pZVOT
SuGul@u uVffiOT UX pnU0ffiOT ffiflffiL.
8. The following are the balance sheets of H Ltd. and S Ltd. as on 31.3.2007.
Liabilities H Ltd. S Ld. Assets H Ltd. S Ld.
Share capital Land and
(10% Pref. Buildings 3,10,000 1,60,000
Shares of Machinery less
Equity shares 3,000 shares in
of Rs. 100 each 10,00,000 4,00,000 S Ltd. 4,50,000
General Reserve 1,00,000 50,000 Stock 2,20,000 1,50,000
Profit and Loss Sundry Creditors 1,55,000 90,000
a/c on 1.4.2006 40,000 30,000 Cash 85,000 1,95,000
Profit and Loss
a/c on 31.3.2007 2,00,000 80,000
Sundry Creditors 1,50,000 70,000
14,90,000 7,30,000 14,90,000 7,30,000
H Ltd. acquired 3,000 equity shares in S Ltd. on 30.9.2006. As on the date of acquisition H Ltd. found the value of Land and Building and Machinery of S Ltd. should be Rs. 1,50,000 and Rs. 1,92,500 respectively.
Prepare the consolidated balance sheet of H Ltd. and its subsidiary S Ltd. as on 31.3.2007 taking into account the fact that assets are to be taken at their proper values.
H 0p S |pzV 31.3.2007 Ap CU_ 0UL| l3(lp
Qunpui_| H Ltd. S Ld. QaX H Ltd. S Ld.
un u | l4_
10% CVt 10% 3,10,000 1,60,000
OTifl<0 . GuOT
0. 100 G{0 U (Sl
uigaOT 10,00,000 4,00,000 |pZV 4,50,000
3,000 uigaOT)
Qux pUl 1,00,000 50,000 \ijUg 2,20,000 1,50,000
Cu {l_ upu
a/g 1.4.2006 40,000 30,000 _otot 1,55,000 90,000
31.3.2007 2,00,000 80,000 Qijraa 85,000 1,95,000
u0u <s_rf
1,50,000 70,000
14,90,000 7,30,000 14,90,000 7,30,000
H S 3,000 uigffifflrn 30.9.2006 Ap aiQix CU0{ffiOT S |pZV | ffiLi_ 0p CV Q\ZXUOT 0. 1,50,000 0. 1,92,500 got Vu_ 0ot. CU aZVOT Qffis 31.3.2007 Ap j0iQOTu CuL |0 QffiLia.
9. The following are the balances of the Indian Scheduled Bank Ltd :
Debit Credit
Share capital
2,50,000 shares of Rs. 20 each Rs. 3 paid 7,50,000
1,37,500 shares of Rs. 10 each Re. 1 paid 3,75,000
Debit Credit Reserve 5,00,000
Current accounts 23,43,853
Deposit accounts 6,85,135
Endorsements for customers 1,61,599
Acceptances for customers 1,78,617
Dividend equalization fund 56,005
Profit and Loss account on 1.4.2006 1,28,139
Interest received 1,41,000
Discount charges 38,461
Commission charges 1,54,859
Dividend received less taxes 86,251
Cash in hand 3,41,644
Cash at reserve bank of India 6,21,858
Money at call and short notice 2,79,416
Bills discounted 8,33,483
Advances to customers 13,42,120
Liabilities of customers for endorsements 1,61,599 Liabilities of customers for acceptances 1,78,617 Bank premises 2,60,000
Shares in subsidiary company 2,48,000
Shares in affiliated company at cost 1,68,000
Balances with other banks 2,24,220
Investments at cost 6,18,358
Interest paid 42,048
General expenses 1,91,363
|
Dividends Interim Final |
Debit Credit 32,188 56,005_ 55,98,919 55,98,919 |
You are required to prepare profit and loss account and balance sheet after taking into account the following adjustments :
(a) Rebate on bills discounted amounts to Rs. 3,271.
(b) Rs. 20,000 to be transferred to General Reserve. CV uLiLUuLL <snu0 C0ULSOT
uig u
upp
aiFI
7.50.000
3.75.000 5,00,000
23,43,853
6,85,135
1,61,599
1,78,617
56,005
1,28,139
1.41.000 38,461
1,54,859
2,50,000 ui0ffiOT 0. 20 0. 3 Q\pzVX
1,37,500 ui0ffiOT 0. 10 0. 1 Q\pzVX
SFUL
{LUL SWU0 *UL snig
u[g \ot |V
Cu {Li_s/g (1.4.2006)
Li Quppx Quppx UF Quppx
_0p ailja|
_i BU Q_PPX G_ra 86,251
Qijra* 00__ 3,41,644
Qijra* RBI &i iQ 6,21,858
Affl__ 0p @pu0n *_ot 2,79,416
Esiw 8,33,483
aiiU0*wOTir*U@ AZU *_OT 13,42,120
aiiU0*wOTir*U@ GQZx*OT Q_p__ 1,61,599 aiiU0*wOTir*U@ j__u*OT Q_p__ 1,78,617 | mi_ 2,60,000
X0n |pZV _i@OT 2,48,000
|pZV _i@OT 1,68,000
CUT Qijtop 2,24,220
6,18,358
m Q\pzVX 42,048
Q_X Q\ot 1,91,363
_i*U - C*_ AZUX 32,188
CpV 56,005
55,98,919 55,98,919
CppU Qpn'S C_ {m_ *nU
0p C__ | Qffiwp. a_Q_X
(a) QffiLu Esi x AG_m 0. 3,271 ototi
(b) 0. 20,000 Q_x *_0@ ppi__ Gis.
10. The following are the balance sheet of ABC Ltd. as on 31.3.2007.
|
Liabilities |
Amount |
Assets |
Amount |
|
12,000 shares of Rs. 10 |
Goodwill |
10,000 | |
|
each fully paid |
0 0 ,0 0, ,2 1 |
Land and Building |
20,500 |
|
Less calls in arrear Rs. 3 |
Plant and Machinery |
50,850 | |
|
per share on 3,000 |
9,000 |
Preliminary expenses |
1,500 |
|
1,11,000 |
Stock |
10,275 | |
|
Creditors |
IO 2 LO 1 |
Debtors |
15,000 |
|
Provision for tax |
4,000 |
Cash |
1,500 |
|
Profit & Loss a/c |
20,800 |
|
1,30,425 |
1,30,425 |
Machinery value was Rs. 10,000 excess it is proposed to write down and to extinguish profit and loss account, goodwill and preliminary expenses by adoption of the following scheme
(a) Forfeit the shares on which the cells are outstanding
(b) Reduce the capital by Rs. 3 per share
(c) Reissue the forefeited share at Rs. 5 per share
(d) Utlise the provision for tax if necessary
Give the journal entries for the above and prepare the balance sheet after reconstructions.
ABC |pzV 31.3.2007 Ap C0u_ gui_| 0np
| ||||||||||||||||||||||||||||||||||||||||
|
1,30,425 1,30,425 |
CVt . 10,000 aV Vu_Uulototx. Au @pffi Cnu {L_ a/g Bzu {pQuuir CPP gpU<s|.
(a) Apu_ ui0<sOT jpupu_
Q\u.
(B) AZX uis0 . 3 spUffiuum_x.
(C) Jpupu_ Q\x AZX uip . 5
Us pQiaifll@ Q\u
(d) Guuum_ aifl JxU EuGuQUffi.
C|Pot guGu uVsOT uX Cu_ | urn'll QffiLa.
11. Explain different methods of valuation of Goodwill of a firm.
12. Explain the rules relating to Redemption of Debentures and also its types.
18 PG-219
|
Attachment: |
| Earning: Approval pending. |
