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Past papers › Adv Accounting › May 2022

CA Inter Adv Accounting — Revision Test Paper (RTP) — May 2022

This page contains all 20 questions from the CA Inter Advanced Accounting Revision Test Paper (RTP) for the May 2022 attempt cycle, sourced from VSI Jaipur.

Q1Balance Sheet and P&L preparation under Schedule III
0 marks easy
Following is the trial balance of Delta limited as on 31.3.2021. (Figures in ` '000) Particulars Debit Particulars Credit: Land at cost 800, Equity share capital (shares of ` 10 each) 500; Calls in arrears 5, 10% Debentures 300; Cash in hand 2, General reserve 150; Plant & Machinery at cost 824, Profit & Loss A/c (balance on 1.4.20) 75; Trade receivables 120, Securities premium 40; Inventories (31-3-21) 96, Sales 1200; Cash at Bank 28, Trade payables 30; Adjusted Purchases 400, Provision for depreciation 150; Factory expenses 80, Suspense Account 10; Administrative expenses 45; Selling expenses 25; Debenture Interest 30; Total 2455, 2455. Additional Information: (i) The authorized share capital of the company is 80,000 shares of ` 10 each. (ii) The company revalued the land at ` 9,60,000. (iii) Equity share capital includes shares of ` 50,000 issued for consideration other than cash. (iv) Suspense account of ` 10,000 represents cash received from the sale of some of the machinery on 1.4.2020. The cost of the machinery was ` 24,000 and the accumulated depreciation thereon being ` 20,000. (v) Depreciation is to be provided on plant and machinery at 10% on cost. (vi) Balance at bank includes ` 5,000 with ABC Bank Ltd., which is not a Scheduled Bank. (vii) Make provision for income tax @30%. (viii) Trade receivables of ` 50,000 are due for more than six months. You are required to prepare Delta Limited's Balance Sheet as at 31.3.2021 and Statement of Profit and Loss with notes to accounts for the year ended 31.3.2021 as per Schedule Ill.
Q2Effective capital and managerial remuneration
0 marks easy
The following is the extract of Balance Sheet of Jupiter Ltd. as at 31st March 2021: Authorized Capital: 40,000, 14% preference shares of ` 100: 40,00,000; 4,00,000 Equity shares of ` 100 each: 4,00,00,000. Issued and Subscribed Capital: 30,000, 14% Preference Shares of `100 each, fully paid up: 30,00,000; 2,40,000 Equity Shares of `100 each, `80 paid-up: 1,92,00,000; Share Suspense Account: 40,00,000. Reserve & Surplus: Capital reserves (60% is revaluation reserve): 5,00,000; Securities Premium: 1,00,000. Secured loans: 15% Debentures: 1,30,00,000. Unsecured loans: Public deposits: 7,40,000; Cash credit loan from IDBI (short term): 9,30,000. Current Liabilities: Trade payables: 6,90,000. Assets: Investment in Shares, debentures, etc.: 1,50,00,000; Profit and Loss Account: 30,50,000; Preliminary expenses not written off: 1,10,000. Jupiter Ltd. has been incurring losses for the last few years. Jupiter Ltd. has only one whole-time director. You are required to compute effective capital as per provisions of schedule V to the Companies Act, 2013. Would your answer differ if Jupiter Ltd. is an investment company? Also calculate the amount of maximum remuneration that can be paid if no special resolution is passed at the general meeting of the company in respect of payment for a period not exceeding three years.
Q3Cash Flow Statement preparation
0 marks easy
From the following details relating to the accounts of Omega Ltd. prepare Cash Flow Statement for the year ended 31st March, 2021: As on 31.03.2021 and 31.03.2020 respectively - Share Capital: 14,00,000 and 11,20,000; General Reserve: 5,60,000 and 3,50,000; Profit and Loss Account: 1,40,000 and 84,000; Debentures: 2,80,000 and -; Provision for taxation: 1,40,000 and 98,000; Trade payables: 9,80,000 and 11,48,000; Plant and Machinery: 9,80,000 and 7,00,000; Land and Building: 8,40,000 and 5,60,000; Investments: 1,40,000 and -; Trade receivables: 7,00,000 and 9,80,000; Inventories: 5,60,000 and 2,80,000; Cash in hand and at Bank: 2,80,000 and 2,80,000. (i) Depreciation @ 20% was charged on the opening value of Plant and Machinery. (ii) At the year end, one old machine costing 70,000 (WDV 28,000) was sold for ` 49,000. Purchase of machinery was also made at the year end. (iii) ` 70,000 was paid towards Income tax during the year. (iv) Land & Building is not subject to any depreciation. Expenses on renovation of building amount ` 2,80,000 were incurred during the year. Prepare Cash Flow Statement.
Q4Profit/loss allocation in pre and post-incorporation periods
0 marks easy
The partners of Shamsher converted their partnership firm into a Private Limited Company named Smriti (P) Ltd. w.e.f 1st January, 2020 which was incorporated on 1st June, 2020. The purchase consideration amounting to ` 11,40,000 was payable later on an interest of 12% per annum. To make the payment of purchase consideration and meet working capital requirements a loan worth ` 17,10,000 @ 10% per annum was availed on 1st June, 2020. The company obtained a building on lease at a monthly rent of ` 19,000 on 1st July, 2020. Following is the information of the company as on 31st March, 2021 (for the period of 15 months): Sales: 37,62,000; Cost of goods sold: 22,57,200; Discount: 87,780; Director's remuneration: 1,14,000; Salaries: 1,71,000; Rent: 2,56,500; Interest: 1,99,500; Depreciation: 57,000; Office expenses: 1,99,500; Sales promotion expenses: 62,700; Preliminary expenses: 28,500; Profit: 3,28,320. Sales between June 2020 and December, 2020 were 2 ½ times of the average sales, which further increased to 3½ times in January to March quarter, 2021. The salaries from July, 2020 doubled. Prepare a statement showing the calculation of profits or losses for the pre-incorporation and post-incorporation periods.
Q5Bonus issue of shares
0 marks easy
Mobile Limited has authorized share capital of 1,00,000 equity shares @ ` 10 each. The company has already issued 60% of its capital for cash. Now the company wishes to issue bonus shares in the ratio 1:5 to its existing shareholders. The following is the status of Reserve and Surplus: General Reserve ` 1,60,000; Plant Revaluation Reserve ` 25,000; Securities Premium Account (Realised in cash) ` 60,000; Capital Redemption Reserve ` 80,000.
Q7Redemption of preference shares at premium
0 marks easy
Rohan Ltd. gives you following information as at 31st March, 2021: Issued & subscribed capital: Equity shares capital: 60,000 Equity shares of ` 10 each fully paid up: 6,00,000; 12% Redeemable Preference share Capital: 5,000 share of ` 100 each: 5,00,000; Less: Calls in arrear (4,000): Total 10,96,000 (final call of ` 20 on 200 shares). Reserve & surplus: Profit and Loss Account: 3,00,000; Securities Premium Account: 30,000; Total: 3,30,000. Non-current liability: Long term borrowings: 14% Debentures: 1,50,000. Current liabilities: Trade payables: 74,000. Non-current Assets: Property, Plant & Equipment: 13,00,000; Non-current Investment: 1,00,000. Current Assets: Inventory: 50,000; Trade Receivables: 20,000; Bank: 1,80,000. On April 1, 2021, the Board of Directors decided to redeem the preference shares (excluding 200 shares on which there are calls in arrear) at 10% premium and to sell the investment at its market price of ` 80,000. They also decided to issue sufficient number of equity shares of ` 10 at a premium of ` 1 per share and the balance in profit and loss account was to be maintained at ` 1,00,000. Premium on redemption can't be set off against securities premium account. Show journal entries and the balance sheet of the company immediately after completion of redemption as per Schedule III, with working for availability of profits for redemption and determination of bank balance at the end. All formalities were completed up to 15th May, 2021.
Q8Right shares, bonus issue, and debenture redemption
0 marks easy
Case Ltd. (unlisted company other than AIFI, Banking company, NBFC and HFC) provides the following information as at 31st March, 2021: Shareholder's Funds: Share Capital - Authorized share capital: 45,000 equity shares of ` 10 each fully paid: 4,50,000; Issued and subscribed share capital: 30,000 equity shares of ` 10 each fully paid: 3,00,000. Reserves and Surplus: Profit & Loss Account: 1,62,000; Debenture Redemption Reserve: 18,000. Non-current liabilities: Long term borrowings: 12% Debentures: 1,80,000. Current Liabilities: Trade payables: 1,72,500. Non-current assets: Property, Plant and Equipment (Freehold property): 1,72,500; Non-current Investment: DRR Investment: 27,000. Current assets: Inventories: 2,02,500; Trade receivables: 1,12,500; Cash and bank balances: Cash at bank: 2,73,000; Cash in hand: 45,000. At the Annual General Meeting on 1.4.2021, it was resolved: (a) To give existing shareholders the option to purchase one ` 10 share at ` 15 for every four shares (held prior to the bonus distribution). This option was taken up by all the shareholders. (b) To issue one bonus share for every five shares held. (c) To repay the debentures at a premium of 3%. Give the necessary journal entries and the company's Balance Sheet after these transactions are completed.
Q9Investment account with FIFO method
0 marks easy
Mr. Wise had 12% Debentures of Face Value ` 100 of Alpha Ltd. as current investments. Details: 1-4-2020: Opening balance: 4,000 debentures costing ` 98 each; 1-6-2020: Purchased: 2,000 debentures @ ` 120 cum interest; 1-9-2020: Sold: 3,000 debentures @ ` 110 cum interest; 1-12-2020: Sold: 2,000 debentures @ ` 105 ex interest; 31-1-2021: Purchased: 3,000 debentures @ ` 100 ex interest; 31-3-2021: Market value of the investments: ` 105 each. Interest due dates are 30th June and 31st December. Mr. Wise closes his books on 31-3-2021. He incurred 2% brokerage for all his transactions. Show investment account in the books of Mr. Wise assuming FIFO method is followed.
Q10Insurance claim calculation for loss of stock
0 marks easy
A fire occurred in the premises of M/s Star & Sons on 21st March 2020. The concern had taken Insurance Policy of ` 70,000 which was subject to average clause. From the books of accounts, the following particulars are available relating to the period 1st April 2019 to March 21st 2020: (i) Stock as on April 1st 2019: ` 1,50,500; (ii) Purchases (including purchase of ` 40,000 for which purchase invoices had not been received from suppliers, though goods have been received in godown): ` 3,17,000; (iii) Cost of goods distributed as samples for advertising from April 1st 2019 to the date of fire, included in above purchases: ` 32,000; (iv) Sales (excluding goods sold on approval basis having sale value ` 35,000): ` 4,55,000. Approval has been received for all goods sold on approval basis, before the date of fire. (v) Purchase return: ` 15,000; (vi) Wages (including salary of Manager ` 10,000): ` 65,000; (vii) Average Rate of Gross Profit @ 20% on sales; (viii) Cost of goods salvaged: ` 12,000. You are required to calculate the amount of claim to be lodged to Insurance Company.
Q11Hire purchase accounting and vendor repossession
0 marks easy
M/s Beta Enterprises bought 3 trucks from Gamma Ltd. on 01-04-2017 on the following terms: Down Payment: ` 6,50,000; 3 Instalments to be paid, each at the end of each year: 1st Instalment ` 3,55,000; 2nd Instalment ` 3,38,000; 3rd Instalment ` 3,30,000. Interest is charged @ 10 % p.a. and included in above instalments. M/s Beta Enterprises provides depreciation @ 20 % on the diminishing balance of the Trucks. On 31st March, 2020, M/s Beta Enterprises failed to pay the 3rd Instalment upon which Gamma Ltd. repossessed 1 truck. Gamma Ltd. agreed to leave 2 trucks with M/s Beta Enterprises and adjusted the value of 1 truck against the amount due. The truck taken over was valued on the basis of 30% depreciation annually on written down value basis. The balance amount remaining in the Vendor's Account after the above adjustment was paid by M/s. Beta Enterprises after 2 months with interest @ 18 % p.a.
Q12Departmental accounting with inter-departmental transfers
0 marks easy
P Ltd. has two Departments X and Y. From the following particulars prepare Departmental Trading Account and Combined Trading and P & L Account for the year ending 31st March, 2021. Details: Opening stock (at Cost): Dept X ` 70,000, Dept Y ` 54,000; Purchase: Dept X ` 2,14,000, Dept Y ` 1,66,000; Carriage inwards: Dept X ` 6,000, Dept Y ` 6,000; Wages: Dept X ` 21,000, Dept Y ` 24,450; Sales: Dept X ` 3,10,000, Dept Y ` 2,54,000; Purchased goods transferred by Dept. Y to Dept. X: ` 30,000; Purchased goods transferred by Dept. X to Dept. Y: ` 24,000; Finished goods transferred by Dept. Y to Dept. X: ` 80,000; Finished goods transferred by Dept. X to Dept. Y: ` 1,00,000; Return of Finished Goods by Dept. Y to Dept. X: ` 25,000; Return of Finished Goods by Dept. X to Dept. Y: ` 17,000; Closing Stock of Purchased Goods: Dept X ` 12,000, Dept Y ` 15,000; Closing Stock of Finished Goods: Dept X ` 60,000, Dept Y ` 35,000. Purchased goods have been transferred mutually at their respective departmental purchase cost and finished goods at departmental market price and 20% of the finished stock (closing) at each department represented finished goods received from the other department.
Q13Branch accounting
0 marks easy
Mr. Chena Swami of Chennai trades in Refined Oil and Ghee. It has a branch at Salem. He despatches 30 tins of Refined Oil @ ` 1,500 per tin and 20 tins of Ghee @ ` 5,000 per tin on 1st of every month. The Branch has incurred expenditure of ` 45,890 which is met out of its collections; this is in addition to expenditure directly paid by Head Office. Details: Chennai H.O. - Purchases: Refined Oil ` 27,50,000, Ghee ` 48,28,000; Direct Expenses ` 6,35,800; Expenses paid by H.O. ` 76,800; Sales: Refined Oil ` 24,10,000, Ghee ` 38,40,500. Salem B.O. - Sales: Refined Oil ` 5,95,000, Ghee ` 14,50,000; Collection during the year ` 20,15,000; Remittance by Branch to Head Office ` 19,50,000. H.O. Balance 01-04-2020 to 31-03-2021: Stock - Refined Oil ` 44,000 to ` 8,90,000, Ghee ` 10,65,000 to ` 15,70,000; Building ` 5,10,800 to ` 7,14,780; Furniture & Fixtures ` 88,600 to ` 79,740. Branch Office Balance 01-04-2020 to 31-03-2021: Stock - Refined Oil ` 22,500 to ` 19,500, Ghee ` 40,000 to ` 90,000; Sundry Debtors ` 1,80,000 to ?; Cash in hand ` 25,690 to ?; Furniture & Fixtures ` 23,800 to ` 21,420. Additional information: (i) Addition to Building on 01-04-2020 ` 2,41,600 by H.O.; (ii) Rate of depreciation: Furniture & Fixtures @ 10% and Building @ 5%; (iii) The Branch Manager is entitled to 10% commission on Branch profits (after charging his commission); (iv) The General Manager is entitled to a salary of ` 20,000 per month; (v) General expenses incurred by Head Office is ` 1,86,000. Prepare Branch Account in the Head Office books and also prepare Chena Swami's Trading and Profit & loss Account (excluding branch transactions) for the year ended 31st March, 2021.
Q14Accounts from incomplete records
0 marks easy
The following is the Balance Sheet of Mr. Kumar as on 31st March, 2020: Equity and Liabilities - Capital Account ` 4,10,000; Sundry Creditors for purchases ` 60,000. Assets - Machinery ` 1,60,000; Furniture ` 35,000; Stock ` 25,000; Debtors ` 1,45,000; Cash in Hand ` 25,000; Cash at Bank ` 80,000. Riots occurred and fire broke out on the evening of 31st March, 2021, destroying the books of account and furniture. The cash available in the cash box was stolen. The trader gives information: (i) Sales are 25% for cash and the balance on credit. His total sales for the year ended 31st March, 2021 were 25% higher than the previous year. All the sales and purchases of goods were evenly spread throughout the year. (ii) Terms of credit: Debtors 2 Months; Creditors 1 Month. (iii) Stock level was maintained at ` 25,000 all throughout the year. (iv) A steady Gross Profit rate of 25% on the turnover was maintained throughout the year. Creditors are paid by cheque only, except for cash purchases of ` 60,000. (v) Bank Pass-book transactions: Miscellaneous Business expenses ` 1,85,500 (including ` 20,000 paid by cheque); Travelling expenses ` 24,000 (paid by cash); Addition to Machinery ` 1,00,000 (paid by cheque) (on 1st April, 2020); Private drawings ` 10,000 (paid by cash); Introduction of additional capital ` 25,000 deposited into the Bank. (vi) Collection from debtors were all through cheques. (vii) Depreciation on Machinery is to be provided @ 15% p.a. (viii) The Cash stolen is to be charged to the Profit and Loss Account. (ix) Loss of furniture is to be adjusted from Capital Account. Prepare Trading, Profit and Loss Account for the year ended 31st March, 2021 and a Balance Sheet as on that date.
Q15Financial statements on non-going concern basis
0 marks easy
Summarised Balance Sheet of Cloth Trader as on 31.03.2020: Equity and Liabilities: Proprietor's Capital ` 3,00,000; Profit & Loss Account ` 1,25,000; 10% Loan Account ` 2,10,000; Trade payables ` 50,000. Assets: Fixed Assets ` 3,60,000; Closing Stock ` 1,50,000; Trade receivables ` 1,00,000; Deferred Expenses ` 50,000; Cash & Bank ` 25,000. Additional Information: (1) The remaining life of fixed assets is 8 years. The pattern of use of the asset is even. The net realizable value of fixed assets on 31.03.2021 was ` 3,25,000. (2) Purchases and Sales in 2020-21 amounted to ` 22,50,000 and ` 27,50,000 respectively. (3) The cost and net realizable value of stock on 31.03.2021 were ` 2,00,000 and ` 2,50,000 respectively. (4) Expenses for the year amounted to ` 78,000 which includes interest on 10% loan amount for the year. (5) Deferred Expenses are amortized equally over 5 years. (6) Trade receivables on 31.03.2021 are ` 1,50,000 of which ` 5,000 is doubtful. Collection of another ` 25,000 depends on successful re-installation of certain product supplied to the customer. (7) Closing trade payables are ` 75,000, likely to be settled at 10% discount. (8) Cash balance as on 31.03.2021 is ` 4,22,000. (9) There is an early repayment penalty for the loan of ` 25,000.
Q18PP&E costs and foreign exchange accounting
0 marks easy
AS 10 Property, Plant and Equipment and AS 11 The Effects of Changes in Foreign Exchange Rates
Q19Government grants and investment impairment
0 marks easy
AS 12 Accounting for Government Grants and AS 13 Accounting for Investments