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Past papers › Adv Accounting › November 2019

CA Inter Adv Accounting — Suggested Answers — November 2019

This page contains all 6 questions from the CA Inter Advanced Accounting Suggested Answers for the November 2019 attempt cycle, sourced from VSI Jaipur.

Q6(a)Effective capital calculation, Schedule V, investment compan
5 marks medium
The following extract of Balance Sheet of Prabhat Ltd. (Non investment Company) was obtained: [Balance sheet showing preference shares Rs 30,00,000; equity shares Rs 1,92,00,000; share suspense account Rs 40,00,000; securities premium Rs 1,00,000; capital reserves Rs 3,90,000; debentures Rs 1,30,00,000; public deposits Rs 7,40,000; trade payables Rs 6,90,000; cash credit Rs 9,30,000; investments Rs 1,50,00,000; P&L account Dr. balance Rs 30,50,000]. Share suspense account represents application money received on shares, allotment of which is not yet made. You are required to compute effective capital as per the provisions of Schedule V. Would your answer differ if Prabhat Ltd. is an investment company?
Q6(b)Bonus shares, journal entries, share capital capitalization
5 marks medium
Following is the extract of Balance Sheet of Prem Ltd. as at 31-3-2018: [Balance sheet showing authorized and issued capital for equity and preference shares, general reserve Rs 3,60,000, capital redemption reserve Rs 1,20,000, securities premium Rs 75,000, P&L account Rs 6,00,000]. On 1st April, 2018, the company decided to capitalize its reserves by way of bonus at the rate of two shares for every five shares held. Show necessary journal entries in the books of the company and prepare the extract of the balance sheet after bonus issue.
Q6(c)Segment reporting, AS-17, reportable segment criteria, quant
5 marks medium
Mac Ltd. gives the following data regarding to its six segments: [Segment data provided: Segment A - assets Rs 80 lakhs, results Rs 100 lakhs, revenue Rs 600 lakhs; Segment B - assets Rs 160 lakhs, results Rs (380) lakhs, revenue Rs 1,240 lakhs; Segment C - assets Rs 60 lakhs, results Rs 20 lakhs, revenue Rs 160 lakhs; Segment D - assets Rs 40 lakhs, results Rs 20 lakhs, revenue Rs 120 lakhs; Segment E - assets Rs 40 lakhs, results Rs (20) lakhs, revenue Rs 160 lakhs; Segment F - assets Rs 20 lakhs, results Rs 60 lakhs, revenue Rs 120 lakhs; Total - assets Rs 400 lakhs, results Rs (200) lakhs, revenue Rs 2,400 lakhs]. The accountant contends that segments 'A' and 'B' alone are reportable segments. Is he justified in his view? Discuss in the context of AS-17 'Segment Reporting'.
Q6(d)Partnership forms, LLP characteristics, liability and manage
5 marks medium
Give an analytical statement of distinction between an ordinary partnership firm and a limited liability partnership.
Q6(e)Convertible debentures, redemption premium, share allotment
5 marks medium
A company had issued 40,000, 12% debentures of Rs 100 each on 1st April, 2015. The debentures are due for redemption on 1st March, 2019. The terms of issue provided that they were redeemable at a premium of 5% and also conferred option to the debenture holders to convert 20% of their holding into equity shares (nominal value Rs 10) at a predetermined price of Rs 15 per share and the payment in cash. 50 debenture holders holding totally 5,000 debentures did not exercise the option. Calculate the number of equity shares to be allotted to the debenture holders and the amount to be paid in cash on redemption.