The Institute of Cost and Works Accountants of India 2008 Certification CWA/ICWA Financial Accounting - Test 4 - Question Paper
PAPER - 5 FINANCIAL ACCOUNTING
Time Allowed: 3 Hours Full Marks: 100
All questions to be answered Q1a) Indicate the correct answer
1. Livestock in the case of mixed farming is
(a) A fixed asset.
(b) A current asset.
(c) A wasting asset.
(d) A tangible asset.
2. Crops are valued at
(a) market price
(b) Cost price
(c) Capitalized value
(d) Economic value
3. Final accounts of a farmer can be prepared under
(a) Single entry method
(b) Double entry method
(c) Both single and double entry methods
(d) None of the above
4. The cash book usually maintained by the farmer is
(a) petty cash book
(b) two-column cash book
(c) Analytical cash book
(d) Three column cash book
5. Livestock purchased will figure in
(a) The balance sheet
(b) The trading account
(c) The profit and loss account
(d) The current account
Q1b) Discuss the chief features and relative advantage and disadvantages of the Double Account system as compared with Single Account System
Q2) The following figures are extracted from the books of Z Insurance Company Ltd. As at 31 st December, 2001:
Rs.
Claims paid less re-insurance
Fire 80,000
Marine 62,000
General Reserve 1,18,000 Commission paid:
Fire 48,000
Marine 39,000
Share Capital (20,000 shares of Rs. 100 each) 20,00,000 Expenses of Management
Fire 53,000
Marine 36,000 Reserve for Unexpired Risks:
Fire 2,04,000
Marine 1,23,000 Investments at Costs:
Central Government Securities deposited with RBI 19,21,000
Other Central Government Securities 1,23,000
State Government Securities 2,22,000
Shares in Companies 2,49,000
Depreciation 21,000 Additional Reserves:
Fire 1,32,000
Marine 16,000
Interest Accrued 25,000
Furniture (Cost Rs. 18,000) 12,000
Building (Cost Rs.1,25,000) 87,000
Office Equipment (Cost Rs. 48,000) 30,000
Cash in hand 56,000
Cash in Bank 1,04,000 Premium less re-insurances:
Fire 2,11,000
Marine 1,62,000
Tax deducted at source 9,000 Premium due:
Fire 28,000
Marine 20,000 Claims outstanding on 1st January, 2001
Fire 14,000
Marine 2,000
Due from other Insurers 27,000
Directors fees 4,000 Commission on re-insurance ceded:
Fire 23,000
Marine 2,000
Dividends 20,000
Interest on investments 1,00,000
Dues to other insurers 43,000
Contingency reserve 39,000
Investment reserve 47,000
The following further information is also given:
(1) Claims Outstanding as on 31st December, 2001, are:
Fire 17,000
Marine 6,000
(2)Market value of investments is Rs. 24,01,00.
(3) Increase Additional Reserve by 10 per cent of net premium for the year of fire.
(4) Maintain reserves for unexpired risks at 50 per cent of Premium for the year in case of Fire insurance and 10 per cent of Premium for the year in case of Marine Insurance. Prepare Revenue Accounts, Profits and Loss Account and Balance Sheet.
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Q3a) From the following figures and ratios, draw out a as on 31st December, 2006: Fixed Assets/Turnover Ration (Cost of Goods Sold) Debt Collection Period Current Ratio Debt Equity Ratio (Total Debt/Equity) Current Liabilities to Net Worth Reserves to Bank Balance Consumption of Raw Materials Stock of Raw Materials Stock of Finished Goods Bank Balance Fixed Assets Gross Profit |
Balance Sheet of Nagarjuna Ltd. 2 2 months 1.5 0.6 0.8 4 40% of Cost of sales 3 months consumption 15% of Cost of Sales 1 /30th of Sales Rs. 6,00,000 1/5th of Sales |
Q3b) From following information prepare the Balance Sheet of XYZ. Co. Ltd., showing the details working:
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Paid-up Capital Plant and Machinery Total Sales (Annual) Gross Profit Margin Annual Credit Sales Current Ratio Inventory Turnover |
Rs. 50,000 Rs. 1,25,000 Rs. 5,00,000 25% 80% of Net Sales 2 4 |
Fixed Assets T urnover 2 Sales Return 20% of Sales Average Collection Period 73 days Bank Credit To T rade Credit 2 Cash to Inventory 1:15 Total Debt to Current Liabilities 3 |
Q4) The following are the figures extracted from the books of Rupali Bank Limited as on
31-3-2007: Rs.
Interest and Discount received 37,05,738
Interest paid on Deposits 20,37,452
Issued and subscribed Capital 10,00,000
Salaries and allowances 2,00,000
Directors fees and allowances 30,000
Rent and Taxes paid 90,000
Postage and Telegrams 60,000
Statutory reserve fund 8,00,000
Commission, exchange and brokerage 1,90,000
Rent received 65,000
Profit on sale of investments 2,00,000
Depreciation on Banks properties Stationery Expenses Preliminary expenses Auditors fees
The following further information is given:
30.000
40.000
25.000
5.000
(a) A customer to whom a sum of Rs. 10 lakhs has been advanced has become insolvent and it is expected only 50% can be recovered from his estate.
(b) There were also other debts for which a provision of Rs. 1,50,000 was found necessary by the auditors.
(c) Rebate on Bills discounted on 31-3-06 was Rs. 12,000 and on 31-3-07 was Rs. 16,000.
(d) Provide Rs. 6,50,000 for Income-tax.
(e) The directors desire to declare 10% dividend.
Prepare the Profit and Loss Account of New Era Bank Limited for the year ended 31-31990 and also show how the Profit and Loss Account will appear in the Balance Sheet if the Profit and Loss Account opening balance was Nil as on 31-3-1989.
Q5) a. The Naida Electric Co., Ltd. re-built and re-equipped a part of their power-house at a cost of Rs. 80,00,000; the part of the old power-house thus superseded had cost originally Rs. 50,00,000 but if erected at the present time would cost 20% more. Rs.
6,00,000 is realised from the sale of old materials and Rs. 3,00,000 worth of old materials are used in the reconstruction and are included in the cost of Rs. 80,00,000 mentioned above. Give necessary entries for recording the above transactions in the books of the company, indicating the allocations between capital and revenue and give reasons for such allocations.
Q5) b. From the following information and details relating to the year ended 31 st March, 2007 and bearing in mind the provisions of the Electricity (Supply) Act, 1948, indicate the disposal of profits of Electricity Company:
|
Particulars |
Rs |
Particulars |
Rs |
|
Net profit before charging debenture interest |
Security deposits of Customers |
150,00,000 | |
|
Fixed Assets |
400,00,000 |
Customers Contribution to Main lines |
4,00,000 |
|
Depreciation written-off on fixed assets |
160,00,000 |
Preliminary expenses |
10,00,000 |
|
Loan from Electricity Board |
Share Capital |
200,00,000 | |
|
6% Investments of the Reserve fund (F.v. Rs 120,00,000) |
120,00,000 |
Average of Current Assets |
40,00,000 |
|
6% Investments of the Contingencies Reserve |
Development Reserve |
20,00,000 | |
|
Tariffs and Dividends Control Reserve |
10% Debenture |
16,,00,000 |
Indicate the disposal of profit ,assuming that the Reserve Bank of India rate on the relevant date was 8 %.
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Attachment: |
| Earning: Approval pending. |
