Q1Financial Statements - Profit & Loss and Balance Sheet prepa
0 marks easy
Om Ltd. has authorized capital of ₹ 50 lakhs divided into 5,00,000 equity shares of ₹ 10 each. Given their ledger balances as on 31st March, 2021, with inventory closing at ₹ 7,05,000, outstanding liabilities for wages ₹ 25,000 and business expenses ₹ 36,500, depreciation rates provided, doubtful debts provision of ₹ 25,000 required, and income tax @ 30%. Transfer ₹ 10,000 to reserves. You are required to prepare Statement of Profit & Loss for the year ended 31st March, 2021 and Balance Sheet as at that date.
Q2Declaration of Dividend from Reserves and Effective Capital
0 marks easy
XYZ Ltd. is having inadequacy of profits in the year ending 31-03-2021 and it proposes to declare 10% dividend out of General Reserves. From the following particulars ascertain the amount that can be utilized from general reserves, according to the Companies (Declaration of Dividend out of Reserves) Rules, 2014: 5,00,000 Equity Shares of ₹ 10 each fully paid up ₹ 50,00,000; General Reserves ₹ 25,00,000; Revaluation Reserves ₹ 6,50,000; Net profit for the year ₹ 1,42,500; Average rate of dividend during the last five years has been 12%.
Q3Cash Flow Statement - AS 3 (Revised) - Direct Method
0 marks easy
The following are the extracts of Balance Sheet and Statement of Profit and Loss of Supriya Ltd. for 2021 and 2020. Prepare Cash Flow Statement of Supriya Ltd. for the year ended 31st March, 2021 in accordance with AS-3 (Revised) using direct method. All transactions were done in cash only. There were no outstanding/prepaid expenses as on 31st March, 2020 and on 31st March, 2021. Ignore deprecation. Dividend amounting ₹ 80,000 was paid during the year ended 31st March, 2021.
Q4Profit/Loss prior to Incorporation - Pre and Post incorporat
0 marks easy
Megha Ltd. was incorporated on 1.7.2020 to take over the running business of M/s Happy from 1.4.2020. The accounts of the company were closed on 31.3.2021. The average monthly sales during the first three months of the year (2020-21) was twice the average monthly sales during each of the remaining nine months. You are required to compute time ratio and sales ratio for pre and post incorporation periods.
Q5Accounting for Bonus Issue - Journal Entries
0 marks easy
Following is the information of Umesh Ltd. as at 31st March, 2021 with authorized capital of 30,000 12% Preference shares of ₹ 10 each and 4,00,000 Equity shares of ₹ 10 each; issued and subscribed capital with preference and equity shares partially paid. Reserves and surplus include General Reserve, Capital Redemption Reserve, Securities premium, and Profit and Loss Account. On 1st April, 2021, the Company has made final call @ ₹ 2 each on 3,00,000 equity shares with payment received by 20th April, 2021. Thereafter, the company decided to capitalize its reserves by way of bonus at the rate of one share for every four shares held. You are required to prepare necessary journal entries in the books of the company.
Q6Right Issue - Journal Entry and Valuation
0 marks easy
Beta Ltd. having share capital of 20,000 equity shares of ₹10 each decides to issue rights share at the ratio of 1 for every 8 shares held at par value. Assuming all the share holders accepted the rights issue and all money was duly received, pass journal entry in the books of the company.
Q7Redemption of Preference Shares - Journal Entries
0 marks easy
ABC Ltd. provides you the following information as on 31st March, 2021: Share capital with 50,000 Equity shares of ₹ 10 each fully paid and 1,500 10% Redeemable preference shares of ₹100 each fully paid; Reserve & Surplus with Capital reserve, General reserve, and Profit and Loss Account. On 1st April 2021, the Board of Directors decided to redeem the preference shares at premium of 10% by utilization of reserves. You are required to prepare necessary Journal Entries including cash transactions in the books of the company.
Q8Redemption of Debentures - DRR Account Preparation
0 marks easy
The following balances appeared in the books of Omega Ltd. as on 1-4-2020: 10% Debentures ₹ 75,00,000; Balance of DRR ₹ 2,50,000; DRR Investment ₹ 11,25,000 represented by 10% ₹ 11,250 Secured Bonds of the Government of India of ₹ 100 each. Annual contribution to the DRR was made as per the requirement. On 31-3-2021, balance at bank was ₹ 80,00,000 before receipt of interest. Interest on Debentures had already been paid. The investments were realized at par for redemption of debentures at a premium of 10% on the above date. Omega Ltd. is an unlisted company (other than AIFI, Banking company, NBFC and HFC). You are required to prepare Debenture Redemption Reserve Account, Debenture Redemption Reserve Investment Account and Bank Account in the books of Omega Ltd. for the year ended 31st March, 2021.
Q9Investment Accounts - Average Cost Method
0 marks easy
On 1st April, 2019 Mr. Shyam had an opening balance of 1000 equity shares of X Ltd ₹ 1,20,000 (face value ₹100 each). On 5.04.2019 he further purchased 200 cum-right shares for ₹ 135 each. On 8.04.2019 the director of X Ltd announced right issue in the ratio of 1:6. Mr. Shyam waived off 100% of his entitlement of right issue in the favour of Mr. Rahul at the rate of ₹ 20 each. All the shares held by Shyam had been acquired on cum right basis and the total market price (ex-right) of all these shares after the declaration of rights got reduced by ₹ 3,400. On 10.10.2019 Shyam sold 350 shares for ₹ 140 each. 31.03.2020 The market price of each share is ₹ 125 each. You are required to prepare the Investment account in the books of Mr. Shyam for the year ended 31.03.2020 assuming that the shares are being valued at average cost.
Q10Insurance Claim for Loss of Stock
0 marks easy
Ram's godown caught fire on 29th August, 2020. Large part of the stock of goods was destroyed and goods costing ₹ 56,350 could be salvaged. Ram provides the following additional information including cost of stock on 1st April 2019 and 31st March 2020, purchases during various periods, samples distributed, goods withdrawn for personal use, sales figures, and fire insurance policy for ₹ 4,00,000 with an average clause. You are required to compute the amount of the claim that will be admitted by the insurance company.
Q11Hire Purchase Transactions - Repossession and Interest Suspe
0 marks easy
What is meant by repossession. What is the treatment for repossession in the books of Hire Purchaser?
Q12Departmental Accounts - Trading and P&L Account
0 marks easy
Below balances are taken from the records of M/s Big Shopping Complex for the year ended 31st March, 2020 with Opening Stock, Purchases, and Sales for Department P and Q. Given: Closing stock of Department P included goods transferred from Department Q for ₹ 40,000; Closing stock of Department Q included goods transferred from Department P for ₹ 60,000; Opening stock details with inter-departmental transfers; Rate of gross profit is uniform from year to year; Total selling expenses incurred were ₹ 2,50,000. From the above information, prepare Departmental Trading Account and Profit & Loss Account for the year ended 31st March 2020, after adjusting the unrealized departmental profits, if any.
Q13Accounting for Branches - Manager's Commission Calculation
0 marks easy
Alpha Ltd. has a retail shop under the supervision of a manager. The ratio of gross profit at selling price is constant at 25 per cent throughout the year to 31st March, 2020. Branch manager is entitled to a commission of 10 per cent of the profit earned by his branch, calculated before charging his commission but subject to a deduction from such commission equal to 25 per cent of any ascertained deficiency of branch stock. All goods were supplied to the branch from head office. Given details for the year ended 31st March, 2020 including Opening Stock, Goods sent to branch, Sales, Chargeable expenses, Closing Stock, and Manager's commission paid on account. From the above details, you are required to calculate the commission due to manager for the year ended 31st March, 2020.
Q14Accounts from Incomplete Records - Trading Account and Balan
0 marks easy
Ram carried on business as retail merchant without maintaining regular account books, but always maintained ₹ 10,000 in cash and deposited the balance into the bank account. He sells goods at profit of 25% on sales. Given assets and liabilities as on 1.4.2020 and 31.3.2021 including cash, creditors, bank balance, debtors, and stock. Bank passbook analysis reveals payments to creditors, business expenses, receipts from debtors, loan taken, and cash deposits. Additional information: payments to creditors and salaries in cash, personal drawings, and loan details. You are required to prepare: Trading and Profit and Loss Account for the year ended 31.3.2021 and Balance Sheet as at 31st March, 2021.
Q15Framework for Preparation and Presentation of Financial Stat
0 marks easy
With regard to financial statements, name any five qualitative characteristics and elements.
Q16Accounting Standards - AS 1 (Disclosure of Policies) and AS
0 marks easy
The draft results of Surya Ltd. for the year ended 31st March, 2020, prepared on the hitherto followed accounting policies and presented for perusal of the board of directors showed a deficit of ₹ 10 crores. The board in consultation with the managing director, decided to value year-end inventory at works cost (₹ 50 crores) instead of the hitherto method of valuation of inventory at prime cost (₹ 30 crores). As chief accountant of the company, you are asked by the managing director to draft the notes on accounts for inclusion in the annual report for 2019-2020.
Q17Accounting Standard AS 10 - Property, Plant and Equipment
0 marks easy
You are required to give the correct accounting treatment for the following in line with provisions of AS 10:
Q18Accounting Standard AS 11 - Effects of Changes in Foreign Ex
0 marks easy
Classify the following items into Monetary and Non-monetary: (i) Share capital; (ii) Trade Payables; (iii) Cash balance; (iv) Property, plant and equipment
Q19Accounting Standard AS 12 - Accounting for Government Grants
0 marks easy
Hygiene Ltd. had received a grant of ₹ 50 lakh in 2012 from a State Government towards installation of pollution control machinery on fulfilment of certain conditions. The company, however, failed to comply with the said conditions and consequently was required to refund the said amount in 2020. The company debited the said amount to its machinery account in 2020 on payment of the same. It also reworked the depreciation for the said machinery from the date of its purchase and passed necessary adjusting entries in the year 2020 to incorporate the retrospective impact of the same. State whether the treatment done by the company is correct or not.
Q19Accounting Standard AS 13 - Accounting for Investments
0 marks easy
Paridhi Electronics Ltd. invested in the shares of Dhansukh Ltd. on 1st May 2020 at a cost of ₹ 10,00,000. Three fourth of these investments were current investments and the remaining investments were intended to be held for more than a year. The published accounts of Dhansukh Ltd. received in January, 2021 reveals that the company has incurred cash losses with decline in market share and investment of Paridhi Electronics Ltd. may not fetch more than 7,50,000. The reduction in value is apparent to be non-temporary. You are required to explain how you will deal with the above in the financial statements of the Paridhi Electronics Ltd. as on 31.3.21 with reference to AS 13?
Q20Accounting Standards AS 16 (Borrowing Costs) and AS 11 (Fore
0 marks easy
When capitalisation of borrowing cost should cease as per Accounting Standard 16? Explain in brief.