Alagappa University 2007 B.Com ADVANCED ACCOUNTANCY - Question Paper

Liabilities Rs. Assets Rs.
7500 ordinary shares of Fixed assets 7,50,000
Rs. 100 each 7,50,000 Debenture redemption
2000, 15% Preference fund investment 88,500
shares of Rs. 100 each 2,00,000 Stock 6,00,800
General reserve 6,00,000 Debtors 2,60,700
P and L A/c 50,000 Cash at Bank 3,00,000
Deb. Red. Fund 88,480
12% Debentures 1,00,000
Sundry creditors 2,11,520
20,00,000 20,00,000
.
11. Rajini Ltd. agreed to acquire the business of Rao Ltd. as on 31.12.2004 on which date the Balance Sheet of Rao Ltd. was as follows :
Liabilities Rs. Assets Rs.
Capital (in shares of Rs. 10 each)
6,00,000 Land and Building
Plant 4,00,000
3,40,000
General reserve 1,70,000 Stock 1,68,000
P & L A/c 1,10,000 Debtors 56,000
6% Debentures 1,00,000 Cash 36,000
Creditors 20,000
10,00,000 10,00,000
The consideration payable by Rajini Ltd. was :
(a) A cash payment of Rs. 2.50 for every share to
Rao Ltd.
(b) The problem of 90,000 Rs. 10 shares at an agreed value of Rs 12.50 per share and
(c) The problem of such an amount of fully paid 5% debentures in Rajini Ltd. at 96% as is sufficient to discharge the 6% debentures in Rao Ltd. at a premium of 20%.
The Directors of Rajini Ltd. valued land and buildings at Rs. 5,00,000 and created a provision of 5% on debtors against doubtful debts.
The expenses of liquidation of Rs. 6,000 were paid by Rajini Ltd.
Give journal entries to close the books of Rao Ltd. and to record the acquisition of business in the books of Rajini Ltd.
12. A firm has 2 departments, cloth and readymade cloths. The clothes were made by the firm itself out of the cloth supplied by the cloth department at its usual selling price. From the subsequent figures prepare departmental Trading and Profit and Loss A/c for the year 2004.
Cloth Dept. Readymade Dept.
Rs. Rs.
Opening stock on 1.1.2004 4,00,000 60,000
Purchases 20,00,000 25,000
Sales 26,00,000 5,00,000
Transfer to readymade cloths dept. 3,00,000 —
Expenses :
Manufacturing — 60,000
Selling 20,000 6,000
Stock on 31.12.2004 2,00,000 60,000
The stock in the readymade clothes department may be considered as consisting of 75% cloth and 25% other expenses. The cloth department earned gross profit at the rate of 20%
in 2003. General expenses of the business as a whole came to Rs. 1,00,000.

13. Raja purchased 4 machines of Rs. 14,000 every by the hire purchase system. The hire-purchase price for all the 4 machines was Rs. 60,000 to be paid as Rs. 15,000 down and 3 installments of Rs. 15,000 every at the end of every year. Depreciation is written off at 10% per annum on the straight line method.
Down payment and 1st installment were paid. On the default, vendor took possession of 3 machines, leaving 1 machine with buyer. The machines were taken by the vendor at a depreciated value of 25% per annum under written down value method. Vendor has spent Rs. 2,000 on repairs and sold the 3 machines for Rs. 40,000.
Give the ledger accounts in the books of Raja and hire vendor.
14. On 25th June 2004 a fire broke out in the premises of Vivek. All the stocks were destroyed other than for Rs. 7,000.
From the subsequent particulars ascertain the claim to be submitted to the Insurance Company assuming that the policy was for Rs. 22,000.
Rs.
Stock as on first January 2004 24,000
Purchases upto the date of the fire 72,000
Sales upto the date of fire 1,20,000
Purchases during the year 2003 1,60,000
Sales during the year 2003 2,50,000
Stock as on first January 2003 25,000
The stock as on first January 2003 included a special item valued Rs. 5,600 which was sold at a profit of 20% on sales. A part of this item was sold in 2003 while the balance was sold on third May 2004 for Rs. 2,500. other than for this item, the gross profit on all other items was at a uniform rate throughout the period.
15. The subsequent was the Balance Sheet of Jothika Ltd. as on 31.12.2004.
Liabilities Rs. Assets Rs.
Issued and paid up share Goodwill 1,20,000
Capital : Fixed Assets 1,60,000
10,000 Equity shares of Rs. 10 every fully paid 3,00,000 Stock
Debtors 25,000
30,000
10,000 7% preference shares of Rs. 10 every fully paid 1,00,000 Profit and Loss A/c 65,000
4,00,000 4,00,000
It was resolved that equity share capital of Rs. 10 every be decreased to fully paid shares of Rs. six every and 7% preference shares of Rs. 10 every be decreased at fully paid preference shares of Rs. seven every. Number of shares in every case remained the identical.
It was resolved that the amount so available be used for writing off the debit balance of the profit and loss a/c, Goodwill a/c and other fixed assets to the extent possible.
There were arrears of preference dividends for the last 3 years and it was decided that they be cancelled.
Draft the journal entries and prepare the re-revised Balance Sheet.
On this date, the company redeemed at a premium of 5% all its preference shares and debentures. For the purpose, it sold all the investments for Rs. 1,20,000 and allotted to its equity share holders 1500 equity shares of Rs. 100 every at par, the entire amount being received immediately.
16. After redemption of preference shares and debentures, the company issued 1 fully paid bonus shares of Rs. 100 for every 3 shares held.
Show journal entries for the above and prepare the Balance Sheet thereafter

Earning:   Approval pending.