Bachelor of Commerce (B.Com.) TY BCom Sem 5 BCom Sem 5 (2018 2019) Oct 2019 AUDITING P V FINAN CIAL ACCOUN Question Paper - Mumbai University | munotes

Questions asked in this paper

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1. Q2 Figures in brackets to the right indicate full marks allotted to the question
2. Q3 Working notes should form part of your answers
3. Q4 All five questions are compulsory
4. Q5 Use of simple calculator is allowed
5. Q1 A) State whether the following statements are TURE or FALSE (Any Eight) : 8 marks
6. Q1 As per AS-14, Purchase Consideration does not include settlement of Debenture holders of Vendor Company
7. Q2 In the process of Internal Reconstruction, decrease in the value of any asset, is debited to Capital Reduction Account
8. Q3 are fixed income bearing investment
9. Q4 Loose Tools are shown under the head Inventories while preparing Balance Sheet of a company
10. Q5 At the year end investments are always valued as per Weighted Average
11. Q6 When an investor receives Bonus, Shares, in his books, it increases his holdings in the company without any addition to the cost of total investment including the Bonus Shares received
12. Q7 of Internal Reconstruction, payment of a Contingent Liability is a
13. Q8 Live Stocks are Fixed Assets
14. Q9 Vendor Company gets liquidated on Amalgamation
15. Q10 Arrears of preference dividend is contingent liability
    • B) Select the most appropriate answer from the given Multiple Choices to fill in the blanks and rewrite the sentences (Any Seven) : 7
16. Q1 Amalgamation is governed AS-13 AS-14)
17. Q2 Sub-division of shares results (increase in share capital decrease in share capital only alteration in share capital )
18. Q3 At the end of the year Investments are shown inthe (cost market value cost or market value whichever is less)
19. Q4 On Amalgamation, assets taken over are recorded in the books of Buying Company (book values as appearing in the books of Vendor Company market value values at which such assets taken over)
20. Q5 IFRS stands
21. Q6 Ina Balance Sheet Bank Overdraft is shown under the Short Term Borrowings
22. Q7 Ina Profit and Loss Account, Dividend (Revenue from Operations Other Incomes Appropriations)
23. Q8 Internal Reconstruction two companies two or more companies)
24. Q9 On completion of process of Internal Reconstruction, balance in Capital Reduction Account, if any, is transferred to (General Reserve Account Profit and Loss Account)
25. Q10 On Amalgamation, balance in Preliminary Expenses Account is transferred to
26. Q2 Mr. X held on 1* April, 2017 8% Bharat Debentures Stock at being payable on 30" September and March each year On 1* June, 2017, he further purchased 8% Bharat Debentures Stock at ex-interest On 1* September, 2017 of the stock was sold at ex-interest and on 31* October, 2017 stock was purchased at ex-interest. On 1*' February, 2018 £60,000 stock was sold at £100 cum-interest The market price of Debenture stock on March, 2018 was 97% Mr. X closes his books of accounts on March every year You are required to prepare Investment Account in the books of Mr. X to record the above transactions 15 marks
27. Q2 The following Trial Balance has been drawn from the books of P Ltd. as on March, 2018: Cash in hand 6,500 1,50,000 Cash with scheduled Bank 1,10,000 | Liabilities for Expenses 43,000 Advance to Suppliers 12,500 2,00,000 Advance Income tax paid | Provision for Taxation 1,50,000 Advance payment of income tax 1,00,000 Trade investment (at cost) | Provision for Tax 230,000 (in fully paid shares of each (Current Year) Calls in Arrears 10,000 44,500 Closing stock (at cost) 75,000 11,000 The following further particulars are available : 15 marks
    • a) Unsecured loan is from a director
    • b) — Secured loan is from the Company’s bankers obtained against charge of all assets of
    • c) Authorized Capital of the Company consists of 1,00,000 Equity Shares of each
    • d) Market value of trade investments is
    • e) Sundry debtors include due for more than six months
    • f) Share capital is represented by 50,000 Equity Shares of 10 each fully called up, of which the last call of per share on 5,000 shares has not been received Prepare Balance Sheet of the company in the prescribed form from the above Trial Balance and additional information given
28. Q3 Mr. Black carried out during the year ended March, 2018; the following transaction in the shares of White Ltd On 1* April, 2017, he held 5,000 equity shares of each fully paid at On 16" April, 2017, he purchased 1,000 shares for from market At a meeting on 26" June, 2017; the company resolved 15 marks
    • a) by way of capitalization of reserves, to make a bonus issue of | fully paid share for every 6 shares held on 10 June, 2017; and
    • b) to give its members the right to apply for one shares for every 10 shares held at price of per share to be paid by August, 2017 The shares issued under (a) and (b) above were not to rank for final dividend for the year ending on March, 2017 On 1* July, 2017, Mr. Black received his bonus shares and further he took up half his entitlement under the right issue, paying the amounts on due date. He sold the remaining rights for per shares & received the proceeds on August, 2017 On 10" January, 2018, Mr. Black final dividend for the year ended On March, 2018; he sold 2,000 shares @ =29 per share Show the investment accounts in Mr. Black’s books for the year ended March, 2018
29. Q3 Z Ltd. had adverse trading for past few years resulting in accumulated losses and overvalued Its Balance Sheet as on March, 2018 Note : Preference Dividend is unpaid for past five years The shareholders and the court approved the following scheme of reconstruction : 15 marks
30. Q1 The paid-up value of Pref. Shares and Equity Shares was to be reduced by 25% and 75% respectively. The Face value will remain unchanged
31. Q2 The Pref. Dividend for two years is to be paid by allotment of Equity Shares credited per share. The remaining amount to be cancelled
32. Q3 The Debenture holders took over freehold property in full settlement of their claim
33. Q4 The investments are sold for
34. Q5 Obsolete stock worth and Irrecoverable Debts worth are to be written off along with Goodwill and Profit and Loss Account
35. Q6 There was a claim against company not provided to the extent of This was settled for Rs. 8,500 You are required to show Journal Entries and Capital Reeducation Account after implementation of the scheme
36. Q4 The following are the Balance Sheets as on March, 2018 of X Co. Ltd. and Y Co. Ltd. 18% Debentures of 10 each 1,00,000 Plant & Machinery | 5,50,000 | 2,50,000 The two companies agreed to amalgamate and form a new company called Z Ltd. which takes over the assets and liabilities of both the companies The assets of X Co. Ltd. are taken over at a reduced valuation of 10% with the exception of Land and Building which are accepted at a book value. Both companies are to receive 5% of the net valuation of their respective business as Goodwill The entire purchase price is to be paid by Z Co. Ltd., in its fully paid shares. In return for Debentures in X Co. Debentures of the same amount and denomination are to be issued You are required to calculate Purchase Consideration of both the companies and prepare necessary Ledgers to close the books of X Co. Ltd. only 15 marks
37. Q4 B Ltd. was in serious financial crisis and the Directors considered it advisable to go for Internal Reconstruction : Balance Sheet of B Ltd. as on March, 2018 Discount on issue of Debentures Scheme as proposed by the directors is as below : 15 marks
38. Q1 Bank agreed to waive interest amount outstanding of included in the balance subject to immediate payment of 50% of their remaining dues
39. Q2 Value of Land was increased by 150%, and Building revalued at
40. Q3 Debenture holders agreed to reduce their claim by 20% provided they are paid 20% of the balance immediately
41. Q4 Preference shareholders to reduce their shares to fully paid-up
42. Q5 Equity share holders to reduce their shares to per share fully paid-up and subscribe 5,00,000 new Equity Shares of each at par
43. Q6 Write off Goodwill, Profit and Loss Account and Discount on issue of Debentures
44. Q7 Trade Mark to be revalued at and Stock at Give necessary Journal Entries on implementation of above scheme of reconstruction
45. Q5 Answer the following :
    • a) Explain in detail the process of Internal Reconstruction. 8
    • b) Explain the need of Convergence with IFRS in India. 7
46. Q5 Write short notes (Any Three) : 15 marks
47. Q1 Consideration Ex-interest and Cum-interest Quotations
48. Q5 Bonus Shares and Right Shares
49. Q3 am
50. Q3 F Lo as fa. daa wae &
    • G) Hel sled

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