B.Com. (Accounting and Finance) SEM IV 2019 20 Oct 2019-20 ATKT FINANCIAL ACCOUNTING Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (a) State whether the following is True or False. (Any 8) 8 marks
   • 1. Rent is allocated on the basis of time
   • 2. Preliminary expenses are post incorporation expenditure
   • 3. Debentures can be redeemed partly paid
   • 4. Preference shares can convert into new debentures
   • 5. Capital should be used to redeem debentures
   • 6. Suspense account contents exchange difference of non-integral foreign operation
   • 7. Debenture Redemption Reserve is created if debentures are redeemed through conversion
   • 8. Current investments are trade investment
   • 9. Every business had different operating cycle
   • 10. Interest to suppliers is allocated in the purchase ratio
2. Q1 (b) Match the Following. (Any 7) 7 marks
   • 6. Credit to P/L a/e f. Sales ratio
   • 10. Cash
3. Q2 Following is the Balance sheet of Goldberg Ltd Balance sheet of Goldberg Itd As at 31" march, 2018 of Rs. 10 each fully paid up Investments 10,00,000 Equity shares of Rs. 10 each fully 15,00,000 Debtors 5,00,000 Profit and loss account | 4,00,000 The company exercises the option to redeem 8% redeemable preference shares at 19% premium and for this purpose the company issued 1,35,000 Equity shares of Rs 10 each at a premium of Rs 10 per share. The Equity shares were fully paid in cash The company also sold out the investment of Rs 10, 26,000. All payments were made to the Redeemable Preference shareholders except those holdings 1,350 shares who could not be traced The directors then issued bonus shares to the then shareholders after issue of new shares, at the rate of 2 shares for every 3 shares held Pass necessary journal entries in the books of Glad rag Ltd. For the above transaction and also prepare the Balance Sheet of the company after redemption
4. Q2 The Balance Sheet of Monica Ltd. As on 31" March, 2010 as follows. preference Shares of Rs.10 Bank 65,000 each fully paid up 40,000 6,000 Equity Shares of Rs.10 each fully paid up 60,000 The company decided to redeem the preference shares at a premium of 5% together with one month’s dividend thereon. Other information is as under: The company issued for cash Rs.12,000, 14% debentures at par 15 marks
   • 2. The company issued at par for cash a minimum number of equity shares of Rs.10 each necessary to provide for redemption of 12% preference shares after utilizing available divisible profits
   • 3. The company made a bonus issue to equity shareholders of one fully paid share of Rs.10 each for every Pass necessary Journal Entries and draft a Balance Sheet after redemption and bonus issue
5. Q3 Company give notice of its intention to redeem its outstanding Rs.400000, 2% debentures stock at Rs.102 percent, and offered the holders the following options: (15) To apply the redemption money for subscribing:
   • (a) 8 % cumulative preference shares of Rs.20 each at Rs.22.50 per share
   • (b) 16% debentures stock at 96 percent
   • (c) To have their holding redeemed for cash Holders of RS.1,71,000 stock accepted the proposal (a) Holders of RS.1,44,000 stock accepted the proposal (b) Pass the journal entries to record the above transactions. Requiement of depositing or investing the amount at the beginning of the year may be ignored
6. Q3 Pragati Enterprises Ltd. issued 35,000, 6.5% debentures of Rs. 100 each on October 1, 2009 redeemable in fiye equal installments starting with march 31, 2015. The Board of decides to transfer to debenture Redemption Reserve RS. 50,000 and Rs. 4,00,000 on March 31, 2012 and 2013 and balance required to be transferred to Debenture Redemption Reserve on March 31, 2012. Record necessary journal entries. Ignore entries for payment of interest. Investment as required by law was made in fixed deposit of the bank. (15)
7. Q4 Wide Ltd. took over the business of M/s Narrow & Sons w.e.f. April, 2017. Wide Lid. was registered Its Profit & Loss Account for the year ended March, 2018 was as under: To Carriage Outward 7,500 To Travelling Expenses To Printing & Stationary To commission on Sales Trend of sales during April 2017 to March 2018 was as under : April, May Rs. 8,500 per month
   • 2. Out of travelling expenses Rs. 3,000 were incurred by office staff while remaining expenses were incurred by salesman
   • 3. Wide Ltd. took over a machine worth Rs. 72,000 from Narrow & Sons while it purchased a new machine on February 2018 for Rs. 48,000. It provided depreciation @ 10% p.a
   • 4. Audit fees are paid for the whole year Prepare Profit & Loss Account for the year ended March, 2018 showing profits for pre and post
8. Q4 The following balances have been extracted from the books of Sure-Success Ltd. as on Dec, 2018 Land at cost 67,250 | Share capital 2,00,000 Selling expenses 2,000 | Prov. for Tax.(Op. Bal.) 15,000 Calls in arrears 3,000 | Sinking Fund for Deb.Red. | 40,800 Sundry debtors 1,45,000 | Int. in Sinking Fund Invt. 2,500 Ady. Payment of I.T. for 2017 | 12,000 | Liabilities for Expenses 4,000 Income Tax for 2018 8,000 Cash at Bank 5,600 Cash in Hand : 68,000 The following further particulars are as follows: The basis of valuation of closing stock has been changed from this year resulting into an additional profit of Rs.3000 as compared to valuation on old basis
   • 2. Administrative expenses include Rs. 6000 to the M.D as an advance against his remuneration. He is entitled only for Rs. 5400 as remuneration
   • 3. Sinking fund is to be creditor with Rs. 20000 which together with the interest received would be invest
   • 4. Income- tax assessment for 2017 has been completed on 20 dec, 2018 ona gross demand of Rs. 14000 but no effect has been given in the books
   • 5. held on 25 november, 2018 the board of director decided to allot one fully —paid bonus share against two shares held by This was sanctioned by the member on 18 december 20 but no effect has been given to it. Bonus on shares where there is call in arrear is to be kept as bonus
   • 6. Provision for taxation are to be made as follows: Income tax at 45 percent of net profit
   • 7. Special surcharge at 5 percent on income tax, Out of sundry debtor Rs 40000 are due for more than six months. There is no doubtful amt
   • 8. Depreciation written off upto last year at rates mentioned against each are as follows: Building Rs. 5000 at
   • 9. Market value of sinking fund investment on 31 dec, 2018 Rs. 42000
   • 10. Calls in arrears are due on 1000 shares out of 20000 shares of 10 each fully called up You are required to prepare the profit and loss account for the year ended 31 december 2618 and balance sheet as on that date QS. A. Explain the provision of the Companies Act, 2013 regarding preparation of Balance Sheet (08)
9. Q5 B. Write difference between contingent liability & current liability. 7 marks
10. Q5 Write Short Notes. (Any 3) 15) Provision for redemption of preference shares
    • 2. Basis of allocation for in profit prior to incorporation
    • 3. Methods of redemption of debentures
    • 4. Schedules of Profit and loss accounts as per companies Act
    • 5. Schedule of Fixed Assets as per companies Act

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