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Past papers/ Adv Accounting/ May 2012
Paper 16 Qs
Question Paper · May 2012

CA Inter Adv Accounting

This page contains all 16 questions from the CA Inter Advanced Accounting Question Paper for the May 2012 attempt cycle, sourced from VSI Jaipur.

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Q.1(a) 05 marks medium AS 7 - Construction Contracts ⚡ Try this Q →
MIs Excellent Construction Company Limited undertook a contract to construct a building for ₹ 3 Crore on 1st September, 2011. On 31st March, 2012 the company found that it had already spent ₹ 1 Crore 80 Lakhs on the construction. Prudent estimate of additional cost for completion was ₹ 1 Crore 40 Lakhs. What amount should be charged to revenue in the final accounts for the year ended on 31st March, 2012, as per the provisions of Accounting Standard 7 "Construction Contracts (Revised)"?
CTTP

Worked Solution

✓ Verified

AS 7 (Revised) — Construction Contracts requires that when the outcome of a construction contract can be estimated reliably, contract revenue and contract costs shall be recognised by reference to the stage of completion of the contract activity at the reporting date.

Step 1 — Determine Total Estimated Cost

Cost already incurred = ₹1,80,00,000; Estimated additional cost = ₹1,40,00,000; Total estimated cost = ₹3,20,00,000.

Step 2 — Check for Foreseeable Loss

Total estimated cost (₹3,20,00,000) exceeds contract price (₹3,00,00,000). Therefore, there is a foreseeable loss of ₹20,00,000. As per AS 7 (Revised), the entire foreseeable loss must be recognised immediately as an expense, irrespective of stage of completion.

Step 3 — Stage of Completion (Cost-to-Cost Method)

Stage of completion = Cost incurred to date ÷ Total estimated cost = ₹1,80,00,000 ÷ ₹3,20,00,000 = 56.25%

Step 4 — Revenue to be Recognised

Contract revenue = ₹3,00,00,000 × 56.25% = ₹1,68,75,000

Step 5 — Cost to be Recognised (Amount Charged to Revenue)

Cost recognised via stage of completion = 56.25% × ₹3,20,00,000 = ₹1,80,00,000. Loss already embedded in the above = ₹1,80,00,000 − ₹1,68,75,000 = ₹11,25,000. Remaining foreseeable loss to be additionally charged = ₹20,00,000 − ₹11,25,000 = ₹8,75,000.

Total amount charged to revenue (P&L) = ₹1,80,00,000 + ₹8,75,000 = ₹1,88,75,000

This ensures the net loss for the year = ₹1,88,75,000 − ₹1,68,75,000 = ₹20,00,000, i.e., the entire foreseeable loss is recognised in the year ended 31st March, 2012, as mandated by AS 7 (Revised).

AS 7 Construction Contracts (Revised) issued by ICAI
PLAN

Write it like this

Time target 9 min

1The skeleton

- Start by computing total estimated cost and immediately comparing it to contract price — this single comparison tells you whether you're in a profit contract or a loss contract, and the entire answer structure changes based on it.
- Explicitly state the foreseeable loss (₹20 lakh) and cite the AS 7 rule in one line — 'since total estimated cost exceeds contract price, the entire foreseeable loss of ₹20,00,000 must be recognised immediately' — examiners award a dedicated mark just for identifying and stating this rule.
- Show stage of completion as a fraction with labels — write '₹1,80,00,000 ÷ ₹3,20,00,000 = 56.25%' on its own line; don't bury it inside a paragraph or the examiner misses your working.
- Calculate revenue recognised (₹1,68,75,000) as a separate numbered step — even though the question only asks for cost charged, showing revenue proves you used the percentage-of-completion method correctly and sets up your reconciliation.
- Arrive at total cost charged by adding the 'remaining foreseeable loss' to proportionate cost — show ₹1,80,00,000 + ₹8,75,000 = ₹1,88,75,000, then verify: revenue minus cost equals the full ₹20 lakh loss; this reconciliation line is what separates a 4/5 from a 5/5.

2Examiner-rewarded phrases

“the entire foreseeable loss shall be recognised immediately as an expense irrespective of the stage of completion”“stage of completion is determined by the cost-to-cost method (costs incurred to date / total estimated costs)”“contract revenue and contract costs shall be recognised by reference to the stage of completion of the contract activity at the reporting date”

3Common trap

Don't fall for this

Most students stop at ₹1,80,00,000 (costs incurred to date) and call it 'cost charged to revenue' — that's wrong because it only captures the proportionate loss already embedded in those costs, not the full foreseeable loss AS 7 demands. You MUST add the residual ₹8,75,000 to hit ₹1,88,75,000, and if you skip the reconciliation check, you won't even realise you missed it.

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Q.1(b) 05 marks medium AS 13 - Accounting for Investments ⚡ Try this Q →
MIs Innovative Garments Manufacturing Company Limited invested in the shares of a mother company on 1st October, 2011 at a cost of ₹ 2,50,000. It also earlier purchased Gold of ₹ 4,00,000 and Silver of ₹ 2,00,000 on 1st March, 2009. Market value as on 31st March, 2012 of above investments are as follows: Shares ₹2,25,000, Gold ₹6,00,000, Silver ₹3,50,000. How above investments will be shown in the books of accounts of MIs Innovative Garments Manufacturing Company Limited for the year ending 31st March, 2012 as per the provisions of Accounting Standard 13 "Accounting for Investments"?
CTTP

Worked Solution

✓ Verified

Classification of Investments under AS 13 (Accounting Standard 13 – Accounting for Investments):

AS 13 classifies investments into two categories: (i) Current Investments – readily realisable and intended to be held for not more than one year, and (ii) Long-term Investments – all other investments.

1. Shares of Mother (Parent) Company – Long-term Investment

Although the shares were purchased on 1st October, 2011 (only 6 months before year-end), shares of a parent/mother company are strategic in nature and are classified as Long-term Investments.

Under AS 13, long-term investments are carried at cost. A reduction in carrying amount is made only when there is a diminution other than temporary in the value of the investment.

Cost = ₹2,50,000 | Market Value = ₹2,25,000 | Decline = ₹25,000

- If the decline in value is temporary in nature → Shares are shown in the Balance Sheet at cost, i.e., ₹2,50,000. No provision is required.
- If the decline is other than temporary → A provision of ₹25,000 must be made, and the shares are shown at ₹2,25,000. The provision is charged to the Profit & Loss Account.

The management must assess the nature of diminution. Since no information is provided indicating permanent impairment, the prudent treatment is to disclose the decline and assess accordingly.

2. Gold – Long-term Investment

Gold was purchased on 1st March, 2009 and has been held for over 3 years as on 31st March, 2012. It is clearly a Long-term Investment.

Under AS 13, long-term investments are carried at cost. Any appreciation in market value is NOT recognised.

Cost = ₹4,00,000 | Market Value = ₹6,00,000 (Appreciation of ₹2,00,000 – not recorded)

Gold will be shown in the Balance Sheet at ₹4,00,000 (cost).

3. Silver – Long-term Investment

Silver was also purchased on 1st March, 2009 and held for over 3 years. It is a Long-term Investment.

Similarly, appreciation in market value is not recognised for long-term investments.

Cost = ₹2,00,000 | Market Value = ₹3,50,000 (Appreciation of ₹1,50,000 – not recorded)

Silver will be shown in the Balance Sheet at ₹2,00,000 (cost).

Presentation in Balance Sheet (as on 31st March, 2012):

All three investments are Long-term Investments and shall be shown under the head 'Investments' in the Balance Sheet:

- Shares of Mother Company: ₹2,50,000 (or ₹2,25,000 if diminution is other than temporary)
- Gold: ₹4,00,000
- Silver: ₹2,00,000

Total Long-term Investments: ₹8,50,000 (assuming temporary diminution in shares)

Note: Under AS 13, appreciation in long-term investments is ignored on grounds of prudence; however, any other-than-temporary decline must be provided for. The market value of each investment should be disclosed by way of notes to accounts as required by AS 13.

Accounting Standard 13 – Accounting for Investments (issued by ICAI)
PLAN

Write it like this

Time target 9 min

1The skeleton

- Lead with classification — your first line must state 'All three investments are Long-term Investments as per AS 13' with a one-line reason each; examiners award classification marks before they even read your numbers.
- Handle shares separately and flag the diminution angle — this is where 2 marks hide; you must write both scenarios (temporary = carry at cost ₹2,50,000 / other than temporary = provide ₹25,000) because the question gives no management intent, so showing both earns full credit.
- Explicitly state the 'no appreciation' rule for Gold and Silver — don't just write the cost figure; write 'appreciation of ₹X,XXX is NOT recognised under AS 13' because that sentence itself carries a mark.
- Close with a mini Balance Sheet presentation — list all three under 'Long-term Investments' with their carrying values in a table or bullets; examiners scan for this final presentation and award a presentation mark even if your earlier logic was shaky.
- Add a disclosure note — one line saying 'market value shall be disclosed by way of notes to accounts as required by AS 13' shows you know the standard beyond just valuation, and that's what separates a 4-mark answer from a 5-mark one.

2Examiner-rewarded phrases

“diminution other than temporary in the value of the investment”“long-term investments are carried at cost; appreciation in market value is not recognised”“disclosed by way of notes to accounts as required by AS 13”

3Common trap

Don't fall for this

Most students treat shares of the parent company as current investments just because they were bought 6 months before year-end — that's an instant mark drop. The holding period doesn't matter here; shares of a mother/parent company are always long-term by nature under AS 13.

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Q.1(c) 05 marks medium AS 6 & AS 10 - Depreciation and Fixed Assets ⚡ Try this Q →
MIs Progressive Company Limited has not charged depreciation for the year ended on 31st March, 2012, in respect of a spare bus purchased during the financial year 2011-12 and kept ready by the company for use as a stand-by, on the ground that it was not actually used during the year. Further, during the year the company made additions to its factory by using its own workforce, at a cost of ₹4,50,000 as wages and materials. The lowest estimate from an outside contractor to carry out the same work was ₹ 6,00,000.
CTTP

Worked Solution

✓ Verified

Part (i): Depreciation on Spare Bus — AS 6 (Depreciation Accounting)

As per AS 6 – Depreciation Accounting, depreciation is the measure of the wearing out, consumption, or other loss of value of a depreciable asset arising from use, efflux of time, or obsolescence through technology and market changes. The standard clearly states that depreciation should be charged on a systematic basis over the useful life of the asset, irrespective of whether the asset is actually used or not during the accounting period.

The spare bus, though not actually used during the year ended 31st March 2012, was purchased and kept ready for use as a stand-by. Since the bus was available and ready for use, it is a depreciable asset and the efflux of time alone is sufficient to warrant the charge of depreciation. The mere fact that the bus was not physically operated does not exempt it from depreciation.

Moreover, AS 6 requires that the depreciation method selected should be applied consistently from period to period. The company's contention that depreciation need not be charged because the bus was not used is not in conformity with AS 6. Accordingly, depreciation must be charged on the spare bus for the year ended 31st March 2012.

This omission, if material, would also require disclosure in the financial statements and could result in a qualification in the auditor's report since the financial statements would not give a true and fair view.

---

Part (ii): Capitalisation of Self-Constructed Asset — AS 10 (Accounting for Fixed Assets)

As per AS 10 – Accounting for Fixed Assets, the cost of a self-constructed fixed asset should include only those costs that are directly attributable to bringing the asset to its working condition for its intended use. The standard specifically states that the cost of a self-constructed asset is determined using the same principles as for an acquired asset.

In case of self-construction, AS 10 further clarifies that the cost should include the cost of construction that directly relates to the specific asset, i.e., the actual cost incurred — wages, materials, etc. — and should not include any internal profits. Where the entity constructs a similar asset for sale in normal course of business and the cost of construction is the same, then such cost may be used as the basis; but the asset should not be stated at an amount exceeding its net realisable value or the cost obtainable from external sources (whichever is lower) only to prevent overstatement.

In this case:
- Actual cost incurred by the company = ₹4,50,000 (wages and materials)
- Lowest outside contractor estimate = ₹6,00,000

The directors' contention of debiting the Factory Building Account with ₹6,00,000 is incorrect. AS 10 does not permit capitalization of notional savings or unrealised profits from self-construction. The factory building must be recorded at actual cost of ₹4,50,000 — the actual expenditure incurred on wages and materials.

Capitalising ₹6,00,000 would result in overstatement of the fixed asset and creation of an artificial profit of ₹1,50,000, which is not permissible under AS 10. The difference of ₹1,50,000 between the contractor's quote and the actual cost represents a saving and cannot be treated as a cost of the asset.

Conclusion: The Factory Building Account should be debited with ₹4,50,000 only, being the actual cost of construction.

AS 6 – Depreciation Accounting (Issued by ICAI)AS 10 – Accounting for Fixed Assets (Issued by ICAI)
PLAN

Write it like this

Time target 9 min

1The skeleton

- Name both standards upfront in your first line — write 'AS 6 – Depreciation Accounting' and 'AS 10 – Accounting for Fixed Assets' before anything else, because examiners allocate marks per standard and scan for the citation immediately.
- For Part (i), anchor on 'efflux of time' — don't just say 'depreciation is mandatory'; state that AS 6 covers wearing out or efflux of time, so physical non-use is irrelevant. That phrase is the scoring phrase.
- For Part (ii), write the numbers in a two-line comparison — 'Actual cost = ₹4,50,000 | Contractor estimate = ₹6,00,000' before your conclusion. Examiners give a separate mark for correctly identifying which figure to capitalise and why.
- State the prohibition explicitly — say AS 10 does not permit capitalisation of notional savings or unrealised internal profits. If you only say 'capitalise actual cost' without saying why the ₹6,00,000 is wrong, you lose the application mark.
- End each part with a one-line conclusion — 'Accordingly, depreciation must be charged' and 'The Factory Building Account should be debited with ₹4,50,000 only'. Examiners reward closure; it signals you know where the argument lands.

2Examiner-rewarded phrases

“depreciation should be charged on a systematic basis over the useful life of the asset irrespective of whether the asset is actually used or not”“the cost of a self-constructed fixed asset should include only those costs directly attributable to bringing the asset to its working condition for its intended use”“capitalisation of notional savings or unrealised profits from self-construction is not permissible under AS 10”

3Common trap

Don't fall for this

Heads up — most students write a long paragraph on AS 6's definition of depreciation but never explicitly say 'efflux of time is sufficient', so they explain the concept correctly yet miss the specific scoring phrase. Same trap on Part (ii): they correctly say 'capitalise actual cost' but forget to call out that the ₹1,50,000 difference is a *saving*, not a cost — that's the line that earns the application mark.

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Q.1(d) 05 marks medium Amalgamations ⚡ Try this Q →
Briefly explain the types of Amalgamations.
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Q.2 16 marks very hard Internal Reconstruction of Company ⚡ Try this Q →
MIs Platinum Limited has decided to reconstruct the Balance Sheet since it has accumulated huge losses. The following is the Balance Sheet of the company as on 31st March, 2012 before reconstruction: Liabilities - Share Capital 50,000 shares of ₹50 each fully paid up ₹25,00,000; 1,00,000 shares of ₹50 each 40% paid up ₹40,00,000; Capital Reserve ₹5,00,000; 8% Debentures of ₹100 each ₹4,00,000; 12% Debentures of ₹100 each ₹6,00,000; Trade Creditors ₹12,40,000; Outstanding Expenses ₹10,60,000. Total ₹1,03,00,000. Assets - Goodwill ₹22,00,000; Land & Building ₹42,70,000; Machinery ₹8,50,000; Computers ₹5,20,000; Stock ₹3,20,000; Trade Debtors ₹10,90,000; Cash at Bank ₹2,68,000; Profit & Loss Account ₹7,82,000. Total ₹1,03,00,000. Mr. Shiv has 8% Debentures ₹3,00,000 and 12% Debentures ₹4,00,000 (total ₹7,00,000). Mr. Ganesh has 8% Debentures ₹1,00,000 and 12% Debentures ₹2,00,000 (total ₹3,00,000). The following scheme of internal reconstruction was framed and implemented as approved by the court: (1) Uncalled capital is to be called up in full and then all shares converted into Equity Shares of ₹40 each. (2) Existing shareholders agree to subscribe fully paid up equity shares of ₹40 each for ₹12,50,000. (3) Trade Creditors are given option of either accepting fully paid equity shares of ₹40 each or accepting 70% of amount due in cash. Trade Creditors for ₹7,50,000 accept equity shares; rest opt for cash. (4) Mr. Shiv agrees to cancel ₹2,00,000 of debentures and accept 15% Debentures for balance due, plus subscribe further 15% Debentures in cash for ₹1,00,000. (5) Mr. Ganesh agrees to cancel ₹50,000 of debentures and accept 15% Debentures for balance due. (6) Land & Building revalued at ₹51,84,000; Machinery at ₹7,20,000; Computers at ₹4,00,000; Stock at ₹3,50,000; Trade Debtors at 10% less. (7) Outstanding Expenses fully paid in cash. (8) Goodwill and Profit & Loss Account to be written off; balance of Capital Reduction Account to be adjusted against Capital Reserve. You are required to pass necessary Journal Entries for all above transactions and draft the company's Balance Sheet immediately after reconstruction.
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Q.3(a) 08 marks hard Calculation of Sales and Purchases ⚡ Try this Q →
MIs Ice Limited gives you the following information to find out Total Sales and Total Purchases: Debtors as on 01.04.2011 ₹70,000; Creditors as on 01.04.2011 ₹81,000; Bills Receivables received during the year ₹47,000; Bills Payable issued during the year ₹53,000; Cash received from customers ₹1,56,000; Cash paid to suppliers ₹1,72,000; Bad Debts recovered ₹16,000; Bills Receivables endorsed to creditors ₹27,000; Bills Receivables dishonoured by customers ₹5,000; Discount allowed by suppliers ₹7,000; Discount allowed to customers ₹9,000; Endorsed Bills Receivables dishonoured ₹3,000; Sales Return ₹11,000; Bills Receivable discounted ₹8,000; Discounted Bills Receivable dishonoured ₹2,000; Cash Sales ₹1,68,500; Cash Purchases ₹1,97,800; Debtors as on 31.03.2012 ₹82,000; Creditors as on 31.03.2012 ₹95,000. Find out Total Sales and Total Purchases.
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Q.3(b) 08 marks hard Partnership - P&L Appropriation ⚡ Try this Q →
Good, Better and Best are in partnership sharing profits and losses in the ratio 3:2:4. Capital account balances as on 31st March, 2012: Good ₹1,70,000 (Cr), Better ₹1,10,000 (Cr), Best ₹1,22,000 (Cr). Further information: (1) ₹22,240 to be transferred to General Reserve. (2) Good, Better and Best paid monthly salary in cash of ₹2,400, ₹1,600 and ₹1,800 respectively. (3) Partners allowed interest on closing capital @6% p.a. and charged interest on drawings @8% p.a. (4) Good and Best entitled to commission @8% and 10% respectively of net profit before appropriation. (5) Better entitled to commission @15% of net profit before charging Interest on Drawings but after other appropriations. (6) Drawings during year: Good ₹2,000 at beginning of every month; Better ₹1,750 at end of every month; Best ₹1,250 at middle of every month. (7) Firm's Accountant entitled to salary of ₹2,000 per month and commission of 12% of net profit after charging such commission. The Net Profit before adjustments was ₹2,76,000. You are required to prepare Profit and Loss Appropriation Account for the year ended on 31st March, 2012.
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Q.4 16 marks very hard Not-for-Profit Organization Accounting ⚡ Try this Q →
From the following Income & Expenditure Account of Premium Sports Club for the year ended 31st March, 2012, prepare Receipts & Payment Account for the year ended 31st March, 2012 and Balance Sheet as on that date. Income & Expenditure shows: Salaries ₹1,18,800; Rent ₹2,16,000; Printing & Stationery ₹28,000; Postage & Telephone ₹41,600; Membership Fee ₹3,200; Electricity Charges ₹38,500; Garden Upkeep ₹19,300; Sports Material Utilized ₹62,800; Repairs & Maintenance ₹18,700; Depreciation ₹13,000; Miscellaneous Expenses ₹5,700; Surplus carried to Capital Fund ₹3,500; Subscriptions ₹4,20,000; Entrance Fee ₹1,20,000; Profit on sale of Sports Material ₹5,500; Interest on 8% Government Bonds ₹12,000; Sale of Old Newspaper ₹11,600. Additional information: (a) Fixed Assets ₹2,40,000 on 01.04.2011; Bank Balance ₹8,300 on 01.04.2011; Stock of Sports Material ₹43,450 and ₹35,670 on respective dates; Outstanding Subscription ₹10,200 and ₹5,700; Subscription received in advance ₹2,400 and ₹4,900; 8% Government Bonds ₹1,50,000 both dates; Outstanding Salaries ₹16,000 and ₹14,300; Outstanding Rent ₹21,000 and ₹15,000; Advance for Stationery ₹1,350 and ₹1,550; Outstanding Repairs ₹1,200 and Nil; Creditors for Sports Material ₹3,400 and ₹4,200. (b) Some Fixed Assets purchased on 01.10.2011; depreciation charged @5% p.a. (c) Sports Material worth ₹72,000 purchased on credit. (d) Club became member of State Table Tennis Association on 01.01.2012, paying fee up to 31.12.2012. (e) 50% of Entrance Fee to be capitalized. (f) Interest on 8% Government Bonds received for two quarters only. (g) Fixed Deposit of ₹80,000 made on 31st March, 2012.
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Q.5(a) 08 marks hard Hire Purchase - Stock and Debtors System ⚡ Try this Q →
MIs Multistore Limited sells goods on cash and hire purchase basis, recording hire-purchase transactions on "Stock and Debtors System". It closes books on 31st March every year. On 1st May, 2011, it sold to Manas a Scooter and LCD TV with following details: Scooter - Cost Price ₹30,000, Down Payment ₹5,000, 12 Installments of ₹2,800 each, Monthly payments starting 1st June, 2011. LCD TV - Cost Price ₹40,000, Down Payment ₹6,000, 6 Installments of ₹7,600 each, Quarterly payments starting 1st July, 2011. Manas paid all installments except those due on 1st January, 2012. MIs Multistore Limited took back Scooter at agreed price of ₹22,000, with excess adjusted against LCD TV installments. Scooter was sold for ₹24,500 after repair charges of ₹1,000. Prepare necessary ledger accounts to record above transactions and find out the profit.
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Q.5(b) 08 marks hard Investment Accounting ⚡ Try this Q →
Mr. Brown made following transactions during financial year 2011-12: 01.05.2011 Purchased 24,000 12% Bonds of ₹100 each at ₹84 cum-interest (Interest payable 30th September and 31st March). 15.06.2011 Purchased 1,50,000 equity shares of ₹10 each in Alpha Limited for ₹25 each through broker charging 2% brokerage. 10.07.2011 Purchased 60,000 equity shares of ₹10 each in Beeta Limited for ₹44 each through broker charging 2% brokerage. 14.10.2011 Alpha Limited made bonus issue of 2 shares for every 3 shares held. 31.10.2011 Sold 80,000 shares in Alpha Limited for ₹22 each. 01.01.2012 Received 15% interim dividend on Alpha Limited shares. 15.01.2012 Beeta Limited made right issue of 1 share for every 4 shares at ₹5 per share; Mr. Brown exercised 40% option and sold balance rights at ₹2.25 per share. 01.03.2012 Sold 15,000 12% Bonds at ₹90 ex-interest. 15.03.2012 Received 18% interim dividend on Beeta Limited shares. Interest on 12% Bonds duly received on due dates. Prepare separate investment accounts for 12% Bonds, Equity Shares of Alpha Limited and Equity Shares of Beeta Limited for year ended 31st March, 2012.
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Q.6 16 marks very hard Insurance Claim - Loss of Stock and Loss of Profit ⚡ Try this Q →
Ramda & Sons had taken out policies (without Average Clause) against loss of stock for ₹2,10,000 and loss of profit for ₹3,20,000. Fire occurred on 1st July, 2011 affecting sales for 3 months. Trading and Profit & Loss Account for year ended 31st March, 2011: Opening Stock ₹96,000; Purchases ₹7,56,000; Wages ₹1,58,000; Manufacturing Expenses ₹75,000; Sales ₹12,00,000; Closing Stock ₹1,85,000; Gross Profit ₹3,00,000; Administrative Expenses ₹83,600; Selling Expenses (Fixed) ₹72,400; Commission on Sales ₹34,200; Carriage Outward ₹49,800; Net Profit ₹60,000. Further details: (a) For period 01.04.2011 to 30.06.2011: Sales ₹3,36,000, Purchases ₹2,14,000, Wages ₹51,000, Manufacturing Expenses ₹12,000. (b) Other Sales figures: 01.04.2010-30.06.2010 ₹3,00,000; 01.07.2010-30.09.2010 ₹3,20,000; 01.07.2011-30.09.2011 ₹48,000. (c) Gross Profit expected to increase by 5% on sales due to decrease in material cost. (d) ₹1,98,000 additionally incurred after fire; policy covered ₹1,56,000 for expenses, leaving ₹42,900 uncovered. Compute claim for stock loss, loss of profit and additional expenses.
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Q.7(a) 04 marks medium Average Due Date ⚡ Try this Q →
MIs Stairs & Co. draw upon M/s Marble & Co. several bills of exchange due for payment on different dates: 15th May ₹44,000 (3 months tenure); 10th June ₹45,000 (4 months tenure); 1st July ₹14,000 (1 month tenure); 19th July ₹17,000 (2 months tenure). Find out the average due date on which payment may be made in one single amount. Note: 15th August (Independence Day) is national holiday and 22nd September declared emergency holiday due to death of national leader.
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Q.7(b) 04 marks medium Partnership - Retired Partner's Rights (Section 37) ⚡ Try this Q →
X, Y and Z are partners sharing profits and losses equally. On 1st December, 2011 Z retired. Capital account balances after adjustments: X ₹45,000, Y ₹75,000, Z ₹50,000. X and Y continued without settling Z's accounts. Final payment to Z made on 1st March, 2012. Partnership firm made profit of ₹30,000 during 1st December, 2011 to 29th February, 2012. What are the rights of Z to share subsequent profit as per Section 37 of the Indian Partnership Act?
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Q.7(c) 04 marks medium Depreciation - Change in Estimate ⚡ Try this Q →
A computer costing ₹60,000 is depreciated on straight line basis, assuming 10 years working life and Nil residual value, for three years. The estimate of remaining useful life after third year was reassessed at 5 years. Calculate depreciation as per the provisions of Accounting Standard 6 "Depreciation Accounting".
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Q.7(d) 04 marks medium Managerial Remuneration ⚡ Try this Q →
What are the maximum limits of managerial remuneration for companies having adequate profits?
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Q.7(e) 04 marks medium ERP System Advantages ⚡ Try this Q →
"ERP package is gaining popularity in big organizations." Briefly explain the advantages of using an ERP package, in the light of above statement.
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