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Past papers › Audit & Ethics › May 2023

CA Inter Audit & Ethics — Mock Test Paper (MTP) — May 2023

This page contains all 2 questions from the CA Inter Auditing & Ethics Mock Test Paper (MTP) for the May 2023 attempt cycle, sourced from VSI Jaipur.

Q2Dissolution of partnership firm — realization account, bank
20 marks very hard
Read, Write and Add give you the following Balance Sheet as on 31st March, 2022: Equity and Liabilities | Rs. | Assets | Rs. Read's Loan | 15,000 | Plant and Machinery at cost | 30,000 Capital Accounts: | | Fixtures and Fittings | 2,000 Read 30,000 | | Stock | 10,400 Write 10,000 | | Debtors 18,400 | Add 2,000 | 42,000 | Less: Provision (400) | 18,000 Sundry Creditors | 17,800 | Joint Life Policy | 15,000 Loan on Hypothecation of Stock | 6,200 | Patents and Trademarks | 10,000 Joint Life Policy Reserve | 12,400 | Cash at Bank | 8,000 Total | 93,400 | Total | 93,400 The partners shared profits and losses in the ratio of Read 4/9, Write 2/9 and Add 1/3. The firm was dissolved on 31st March, 2022 and you are given the following information: (a) Add had taken a loan from insurers for Rs. 5,000 on the security of Joint Life Policy. The policy was surrendered and Insurers paid a sum of Rs. 10,200 after deducting Rs. 5,000 for Add's loan and Rs. 300 as interest thereon. (b) One of the creditors took some of the patents whose book value was Rs. 6,000 at a valuation of Rs. 4,500. The balance to that creditor was paid in cash. (c) The firm had previously purchased some shares in a joint stock company and had written them off on finding them useless. The shares were now found to be worth Rs. 3,000 and the loan creditor agreed to accept the shares at this value. (d) The remaining assets realized the following amounts: Plant and Machinery Rs. 17,000; Fixtures and Fittings Rs. 1,000; Stock Rs. 9,000; Debtors Rs. 16,500; Patents 50% of their book value. (e) The liabilities were paid and a total discount of Rs. 500 was allowed by the creditors. (f) The expenses of realization amounted to Rs. 2,300. Prepare the Realization Account, Bank Account and Partners' Capital Accounts in columnar form.
Q5Consolidated balance sheet — holding and subsidiary company,
20 marks very hard
On 31st March, 2022 H Ltd. and its subsidiary S Ltd. give the following information: | | H Ltd. (Rs.) | S Ltd. (Rs.) | |---|---|---| | Equity shares of Rs. 10 each | 13,40,000 | 2,40,000 | | Reserves and Surplus | 4,80,000 | 1,80,000 | | Profit & Loss Account | 2,40,000 | 60,000 | | 12% Debentures | 1,00,000 | — | | Creditors | 2,00,000 | 1,22,000 | | Bank Overdraft | 1,00,000 | — | | Bills Payable | 60,000 | 14,800 | | Machinery | 7,20,000 | 2,16,000 | | Furniture | 3,60,000 | 40,800 | | Investments in S Ltd. (19,200 shares at Rs. 20 each) | 3,84,000 | — | | Inventories | 6,00,000 | 2,00,000 | | Debtors | 3,00,000 | 90,000 | | Bill Receivables | 1,00,000 | 30,000 | | Cash at Bank | 56,000 | 40,000 | The following information is also provided: (a) H Ltd. purchased 19,200 shares of S Ltd. on 1st April, 2021, when the balances of Reserves & Surplus and Profit & Loss Account of S Ltd. stood at Rs. 60,000 and Rs. 36,000 respectively. (b) Machinery (Book value Rs. 2,40,000) and Furniture (Book value Rs. 48,000) of S Ltd. were revalued at Rs. 3,60,000 and Rs. 36,000 respectively on 1st April, 2021, for the purpose of fixing the price of its shares. (Rates of depreciation computed based on useful lives: Machinery 10%, Furniture 15%). (c) On 31st March, 2022, Bills payable of Rs. 12,000 shown in S Ltd.'s Balance Sheet had been accepted in favour of H Ltd. You are required to prepare Consolidated Balance Sheet of H Ltd. and its Subsidiary S Ltd. as at 31st March, 2022.