BCom TY BCom Sem 5 2022 2023 Nov 2023 FINANCIAL ACCOUNTING AND AUDITING PAPERS V FINANCIAL ACCOUNTING Question Paper - Mumbai University | munotes

Questions asked in this paper

• N.B:1) Figures to the right indicate full marks

1. Q1 A) Select the correct option (Any eight) 8 marks
   • 1. The fictitious debit balances are to be transferred
   • a) internal reconstruction
   • b) security premium
   • c) share capital
   • d) Capital Reduction
   • 2. Dividend on Equity shares accrues on the
   • a) due date
   • b) last date of the year
   • c) declaration
   • d) fixed date
   • 3. Unethical behaviour can___ the company
   • a) Cost
   • b) help
   • c) defame
   • d) benefit
   • 4. Ethics education can check reporting
   • a) Unethical
   • b) Ethical
   • c) legal
   • d) social
   • 5. The amount of debtors due for more than___ months is to be shown separately
   • a) three
   • b) five
   • d) ten
   • 6. The Capital reduction means reduction in _ value of shares
   • a) authorized capital
   • c) Uncalled capital
   • 7. The brokerage and stamp duty paid at the time of
   • a) added to cost
   • b) ignored
   • c) deducted from cost
   • d) not recorded in Books of accounts
   • 8. Immovable properties held for companies’ operation is to be shown as
   • a) investments
   • b) current liabilities
   • c) current assets
   • d) fixed assets
   • 9. The excess of purchase consideration over net
   • a. capital reserve
   • b. security premium
   • d. goodwill
   • 10. Goodwill or capital reserve can arise Off accounting
   • a) purchase
   • b) merger
   • c) pooling of interest
   • d) acquisition
2. Q1 B) State whether the statements are True or False (Any seven) 7 marks
   • 1) As per AS-14 there are two types of Amalgamation
   • 2) In Merger method of Amalgamation shareholders holding 90% equity shares are same in both the companies
   • 3) Pooling of Interest method is applicable in case of amalgamation is in the nature of merger
   • 4) Internal Reconstruction takes place when financial position of the company is very good
   • 5) A Company cannot reduce its share capital unless it is authorized by its Articles of
   • 6) Long term Investments should be carried in the financial statements at cost
   • 7) Licenses and franchise is a Tangible fixed asset
   • 8) Capital Advances should be disclosed under the head Capital Work in Progress
   • 9) Cheques & Drafts on hand are required to be disclosed under the head cash
   • 10) IFRS enhances uniformity in the Accounting Principles
3. Q2 Following is the trial balance of M/S Welfare Ltd as on March 2020 Trial Balance as on 31.03.2020 Stock at cost 250000 | 8500 equity shares of Rs 100 850000 15 marks
   • 1) Out of the total debtors Rs 25000 debtors due for more than six month
   • 2) Bank loan 1s secured against the Stock of goods
   • 3) Market value of the investment is Rs. 85000 and the face value is Rs.40000
   • 4) Transfer During the year Rs.15000 to general reserve
   • 5) The director of the company declared 8% dividend on equity share capital
   • 6) Bank balance represents balance with Bank of Maharashtra You are asked to prepare Profit & Loss Appropriation account for the year ended 31 March 2020 and Balance sheet as on same date in vertical format as per the schedule requirements of the Companies Act
4. Q2 Mr. Siddhant holds as on 1* April 2021 10% Debentures as Investment. Cost price of the Debentures is Rs. 1,56,000. The interest is payable half yearly on 30" June and December every year. The following transactions took place during the year ended 31“ March 01/05/2021: Purchased 10% Debentures having face value of Rs. 60,000 @Rs.98 cum Interest 01/08/2021: Sold the 10% Debentures having face value of Rs. 72,000 @ Rs.97 cum interest 01/02/2022: Mr. Siddhant Sold 10% Debentures @Rs. 104 ex Interest. The face value of Prepare Investment account in the books of Mr. Siddhant (Apply AS-13). The market price of the Investment is Rs. 1,80,400 on March 2022. Investments are to be valued at cost or market price whichever is lower. (15)
5. Q3 Savita Ltd. and Kavita Ltd. agreed to amalgamate and form a new company namely Sarita Ltd. which will take over all the assets and liabilities of both the companies. Followings are the Balance Sheets of Savita Ltd. and Kavita Ltd. as on 31st March, 2022. (15] Balance Sheets as on March, 2022 Equity Sh. Plant and quity Shares of | 7,00,000 | 6,00,000 each fully paid Machinery of each, fully paid 1,00,000 40,000 Profit and Loss A/c 4,00,000 Profit and Loss Terms of Amalgamation:
   • a) In case of Savita Ltd. Assets and Liabilities are to be taken over at book values. For every 5 equity shares in Savita Ltd., 6 equity shares of = 10 each in Sarita Ltd. shall be issued at 10% premium
   • b) In case of Kavita Ltd.
   • 1. 6% Preference shareholders of Kavita Ltd. would be allotted 4, 7% Preference shares of 100 each in Sarita Ltd. for every 5,6% Preference shares in Kavita Ltd
   • 2.9% Debenture holders would be discharged at par by issue of an equal number of 10% Debentures of = 100 each in Sarita Ltd. at par
   • 3. Plant and Machinery and stock shall be appreciated by 10%
   • 4. Balance of purchase consideration would be discharged by issue of equity shares of = 10 each in Sarita Ltd. issued at par
   • 5. Sundry Debtors of Kavita Ltd. include due from Savita Ltd You are required to: a) Compute Purchase Consideration
   • b) Give necessary Journal Entries in the books of Sarita Ltd
6. Q3 A) On 1* April 2021 Mrs. Sonali Equity Shares of Rs. 100 each in Janhavi Ltd; at a cost of (8) On July 2021 he acquired 400 more shares in the same company for Rs. 8,000 On 31* July 2021 he further acquired 600 more shares at Rs. 20 per share On August 2021 Janhavi Ltd; announced bonus shares to the equity shareholders in the ratio of one bonus share for every two shares held on 5 August 2021 On 31* August 2021 Janhavi Ltd; declared the dividend @ per share for the year Prepare Investment account in the books of Mrs. Sonali for the year ended 31‘t March
7. Q3 (B) The summary Balance sheet of Ram Ltd. as on 31“ March as under. 5,000 shares of Rs. 100 The following scheme of reconstruction has been agreed upon by all the concern parties and was approved by the court 7 marks
   • 1. The Equity shareholders have reduced.their claims by Rs. 95 per share
   • 2. The Debenture holders have agreed to reduced their claim by 50% on a condition that the remaining to be settled by issue of 8% Preference shares of each
   • 3. The unsecured creditors ready to forego 20% of their dues in exchange for ordinary shares of the same amount
   • 4. The assets are to be reduced as follows Stock-in Rs. 25,000 Pass journal entries assuming that the above scheme has been duly implemented
8. Q4 Following is the trial balance of Ltd. as On 31st March 2020 Fixed asset at cost 3600000 | 40,000 equity shares of Rs. 100 | 4000000 Investment in mutual 500000 | ( issued and called up) Stock as on 31st March 2020 Loan from IDBI Bank 500000 Work in progress 100000 Profit. and loss account ash in hand 30000 | Bills payable 21000 Bank balance Provision for tax 32000 Draft on hand 11400 | Customer Advance 20000 Advance tax 24000 | Provision for employee benefit 50000 Patent 200000 | Provision for d iati Calls in arrears 400000
   • 1. Face value of the investment was Rs.490000 and its market value was Rs.550000
   • 2. The authorized share capital of the company is divided into 80000 equity shares of
   • 3. Loan from IDBI it's secured against fixed asset of the company
   • 5. Bank balance indicates balance with Syndicate Bank On the basis of trial balance and additional information you are asked to prepare vertical balance sheet as on 31 march 2020 as per the schedule III requirement of the Companies Act
9. Q4 a) Following is the Balance Sheet of Vikas Ltd. Balance Sheet.as on March, 2022 Issued and Paid-up Intangible Assets 70,000 Statutory Reserve (to be Current Assets 80,000 maintained for 3 more years) 25,000 | Profit & Loss A/c 50,000 Vishal Ltd. agreed to absorb Vikas Ltd. on the following terms: 8 marks
   • 1. Vishal Ltd. agreed to take over all the assets and liabilities
   • 2. The fixed assets of Vikas Ltd. are appreciated by = 25,000
   • 3.25% purchase price is to be paid in cash and the balance in shares which are issued at the market price
   • 4. Liquidation expenses amounted to = 30,000 agreed to be paid by Vikas Ltd
   • 5. Market value of share of = 10 each of Vishal Ltd. is = 12 per share
   • 7. The amalgamation is in the nature of purchase You are required to show:
   • a) Purchase consideration
   • b) Opening entries in the books of Vishal Ltd
10. Q4 (B) The summary Balance sheet of Krishna Ltd. as on March 2022 was as under The following scheme of reconstruction has been submitted on behalf of all the parties and was duly sanctioned by the court 7 marks
    • 1. The Equity share capital was reduced to Rs. 2 per share paid-up. However, face value will remain unchanged The Debenture holders total claim be reduced by 30% and the remainder to be settled by issue of 9% Debentures of Rs. 100 each
    • 3. Bank Loan was settled after remission of 20%. The requisite amount was raised by disposing stock of the cost Rs. 20,000
    • 4. The unsecured creditors forego 50% of their claims and balance to be paid within three
    • 5. Machinery was revalued at Rs. 80,000
    • 6. All the fictitious assets and intangible assets to be written off in full Prepare Capital Reduction account assuming that the above scheme has been duly
11. Q5 A) What is the difference between Internal and External Reconstruction of of
12. Q5 B) Distinguish between Amalgamation v/s Absorption v/s External Reconstruction of
13. Q5 Write Short Notes ( Any three) 15 marks
    • a) Tangible and Intangible Fixed Assets
    • b) Sale of Right Entitlement and Purchase of Right Shares
    • c) Methods of calculation of Purchase Consideration
    • e) Contingent Liability
    • 3. AM
    • 2. TAR GAT
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    • 5) 6% Ge HO
    • 2) At Raia & Weil % fedard TAR (AS
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