QQuestion (c)Investment Account - Debentures purchase and sale
4 marks medium
On 1st December 2015, Mrs. Blue & Black purchased, 20,000 12% fully paid debentures of ₹ 100 each at ₹ 105 cum interest price, also paying brokerage @ 1% of cum interest amount of the purchase. On 1st March, 2016, the firm sold all these debentures at ₹ 110 cum-interest price, again paying brokerage @ 1% of cum interest amount. Prepare Investment Account in the books of Mrs. Blue & Black for the period 1st Dec. 2015 to 1st March 2016. Interest being payable half yearly on 30th September and 31st March of every accounting year.
QQuestion (partial)Average due date calculation
0 marks easy
You are required to find the said average due date. Any fraction of a day arising from the calculation to be considered as full day.
QbStock Valuation, Fire Loss Claim
8 marks hard
On 1st April, 2016 the stock of Mr. Hariprasad was destroyed by fire but sufficient records were saved from which following particulars were ascertained:
Stock at cost 1 Jan. 2015: 1,47,000
Stock at cost 31 Dec. 2015: 1,59,200
Purchases year ended 31 Dec. 2015: 7,96,000
Sales year ended 31st Dec. 2015: 9,74,000
Purchases 1-1-2016 to 31-3-2016: 3,24,000
Sales 1-1-2016 to 31-3-2016: 4,62,400
In valuing the stock for the Balance Sheet at 31st Dec. 2015 ₹ 4,600 had been written off on certain stock which was a poor selling line having the cost ₹ 13,800. A portion of these goods were sold in March 2016 at a loss of ₹ 500 on original cost of ₹ 6,900. The remainder of this stock was now estimated to be worth in original cost. Subject to the above exception gross profit had remained at a uniform rate throughout the year.
The value of stock salvaged was ₹ 11,600. The policy was for ₹ 1,00,000 and was subject to average clause.
Work out the amount of the claim of loss by fire.
QdAccounting Standard 9 (AS-9), Revenue Recognition, Productio
5 marks medium
Case: Manufacturing company with production stages: Raw material (₹1,00,000 cost, ₹80,000 NRV), Pulp (₹1,20,000 cost, ₹1,20,000 NRV), Rough & thick paper (₹1,50,000 cost, ₹1,80,000 NRV), Fine Paper Rolls (₹1,80,000 cost, ₹3,50,000 NRV), Sale agreed and invoiced (₹2,00,000 cost, ₹3,50,000 NRV), Delivered and paid for (₹2,00,000 cost, ₹3,50,000 NRV).
A manufacturing company has the following stages of production and sale in manufacturing fine paper rolls. Explain the stage on which you think revenue will be generated and state how much would be net profit for year ending 31-3-16 on this product according to AS-9.
QdLife Insurance Policies - Partnership
4 marks medium
X, Y, Z were partners in a firm sharing Profit & Loss in ratio of 2:1:1. The firm took a joint life policy on the lives of all the partners of assured value of ₹ 2,00,000. The firm also took separate life policies of partners as follows:
X: 1,00,000
Y: 2,00,000
Z: 3,00,000
The premium paid for separate life policies was debited to Profit & Loss A/c. Surrender value of all policies is 50%. You are required to calculate the share of life policies which X's executors will get in event of X's death?
QePre-incorporation Profit and Losses
4 marks medium
What are the purposes for which Pre-incorporation Profit & Pre-incorporation Losses can be used for?
Q1(a)Accounting Standard 7 - Construction Contracts
5 marks hard
GTI Ltd. negotiates with Bharat Oil Corporation Ltd. (BOCL), for construction of 'Retail Petrol & Diesel Outlet Stations'. Based on proposals submitted to different Regional Offices of BOCL, the final approval for one outlet each in Region X, Region Y, Region Z is awaited to GTI Ltd. A single agreement is entered into between two. The agreement lays down values for each of the three outlets i.e. ₹ 102 lacs, ₹ 150 lacs, ₹ 130 lacs for Region X, Region Y, Region Z respectively. Also no separate completion time for each Region. Comment whether GTI Ltd. will treat it as a single contract or three separate contracts with reference to AS-7?
Q1(b)Accounting Standard 10 - Fixed Assets (Revaluation and Depre
5 marks medium
Hema Ltd. purchased a machinery on 1.04.2008 for ₹ 15,00,000. The company charged straight line depreciation based on 15 years working life estimate and residual value ₹ 3,00,000. At the beginning of the 4th year, the company by way of systematic revaluation revalued the machinery upward by 20% of net book value as on date and also re-estimated the useful life in 3 years and scrap value as nil. The increase in net book value was credited directly to revaluation reserves. Depreciation (on SLM basis) later on was charged to Profit & Loss Account. After the beginning of the 5th year the company decided to dispose off the machinery and estimated the realizable value to ₹ 2,00,000. You are required to ascertain the amount to be charged to Profit & Loss Account at the beginning of 8th year with reference to AS-10.
Q1(c)(i)Accounting Standard 13 - Investments
5 marks hard
Paridhi Electronics Ltd. invested in the shares of another unlisted company on 1st May 2012 at a cost of ₹ 3,30,000 with the intention of holding more than a year. The published accounts of unlisted company received in Jan 2016 reveals that the company has incurred cash losses with deficit market share and investment of Paridhi Electronics Ltd. may not fetch more than ₹ 45,000. How you will deal with this in the financial statement as on 31.3.16 with reference to AS-13?
Q5Fixed Assets - Hire Purchase and Installment Payment Account
8 marks hard
Srikumar bought 2 cars from 'Fair Value Motors Pvt Ltd.' on 1-4-2012 on the following terms: Down payment ₹6,00,000; 1st Installment at the end of first year ₹4,20,000; 2nd Installment at the end of 2nd year ₹4,90,000; 3rd Installment at the end of 3rd year ₹5,50,000. Interest is charged at 10% p.a. Srikumar provides depreciation @ 25% on the diminishing balances. On 31-3-15 Srikumar failed to pay the 3rd installment upon which 'Fair Value Motors Pvt Ltd.' repossessed 1 car. Srikumar agreed to leave one car with Fair Value Motors Pvt Ltd. and adjusted the value of the car against the amount due. The car taken over was valued on the basis of 40% depreciation annually on written down basis. The balance amount remaining in the vendor's account after the above adjustment was paid by Srikumar after 3 months with interest @ 20% p.a.
Q6Partnership Accounts, Goodwill, Asset Revaluation, Profit Di
16 marks very hard
A, B and C were partners sharing Profits and Losses in the ratio of 2:2:1. Their Balance Sheet as on 1-4-2015 stood as follows:
Capital Accounts: A 5,00,000; B 4,00,000; C 3,00,000; Reserves 1,00,000; Trade Payables 4,00,000
Assets: Fixed Assets 10,00,000; Inventory 2,50,000; Trade Receivable 3,50,000; Cash and Bank 1,00,000
Total: 17,00,000
On 1st Oct. 2015, C died. His representatives agreed that:
(i) Goodwill of the firm be valued at ₹ 5,00,000. Goodwill not to be shown off in books of Accounts.
(ii) Fixed assets to written down by ₹ 1,20,000 and
(iii) In lieu of profits, C should be paid at the rate of 25% p.a. on his capital as on 1-4-2015. Current year's (2014-2015) profit after charging depreciation of ₹ 95,000 (₹ 50,000 related to the 1st half) was ₹ 4,05,000. Profit was evenly spread throughout the year.
Q6Partnership - Balance Sheet preparation
0 marks easy
Prepare the Balance Sheet of the firm as on 31-3-2016, assuming that final settlement to C's executors was made on 31-3-2016.
Q6Partnership - Capital Account
0 marks easy
Prepare the Capital A/c of the partners as on 1-10-2015 & 31-3-2016.
Q7Accounting outsourcing - professional judgment
4 marks medium
Recently a growing trend has developed for outsourcing the accounting function to a third party. What are the basis on which choice of such third party made?
Q7Bills of Exchange - Average due date
4 marks medium
A merchant trader having accepted the following several bills falling due on different dates, now desires to have these bills cancelled and to accept a new bill for the whole amount payable on the average due date.
Q9Club Accounting - Income & Expenditure Account and Balance S
0 marks easy
Case: Additional Information for Retreat & Refresh Club as at 1.4.2015 and 31.3.2016: Subscription due (not received) ₹4,800 (₹3,920); Cheque issued, but not presented (payment of printing expenses) ₹360 (₹120); Club premises at cost ₹1,16,000 (-); Depreciation on club premises provided so far ₹75,200 (-); Car at cost ₹48,760 (-); Depreciation on car provided so far ₹41,160 (-); Value of Bar stock ₹2,840 (₹3,480); Amount unpaid for bar purchases ₹2,360 (₹1,720). Depreciation is to be provided @ 5% p.a. on written down value of the club premises and @ 15% p.a. on car for the whole year.
You are required to prepare an Income & Expenditure A/c of Retreat & Refresh Club for the year ending 31st March, 2016 and Balance Sheet as on that date.