BCom TY BCom Sem 5 2023 2024 Oct 2024 FINANCIAL ACCOUNTING & AUDITING PAPER V FINANCIAL ACCOUNTING Question Paper - Mumbai University | munotes

Questions asked in this paper

• (2) Figures to the right indicate full marks

1. Q1 A) Match the following (Any 08) 8 marks
   • 1) Net Payment method a. Last claimant in payment of dividend
   • 2) Computer b. Creditors of the company
   • 3) Computer Software
   • 4) Cheque on hand d. Preference in payment of dividend
   • 5) Provision for tax e. Issued to existing shareholders
   • 6) Right shares f. Governed by AS-14
   • 7) Equity shares g. Method of purchase consideration
   • 8) Preference shares h. Short term provisions
   • 9) Amalgamation of companies I. Tangible fixed asset
   • B) State whether the following statements are True or False. (Any 07) 7
   • 1) Sundry debtors are shown under trade receivables in the vertical balance sheet
   • 2) Realization profit is always transferred to equity shareholders’ account
   • 3) During Internal reconstruction fictitious assets are written off
   • 4) Right shares are issued to existing shareholders of the company
   • 5) liabilities are shown under fixed assets in the balance sheet
   • 6) internal reconstruction there are two liquidations takes place
   • 7) Any reduction in the value of asset is debited to capital reduction account
   • 8) Debentures holders receives dividend as return on investment
   • 9) Bank loan is a long-term liability
   • 10) AS-13 deals with Investment Accounting
2. Q2 Yogita Ltd. and Kavita Ltd. agreed to amalgamate and form a new company namely Ltd. which will take over all the assets and liabilities of both the companies. Followings are the Balance Sheets of Yogita Ltd. and Kavita Ltd. as on 31st March, 2023 Balance Sheets as on 31st March, 2023 Equity Shares of Rs. Plant and 10 each fully paid 6,00,000 | 5,00,000 6,00,000 | 5,00,000 Profit and Loss A/c 4,00,000 Profit and Loss 10% Debentures of Rs Terms of Amalgamation:
   • a) In case of Yogita Ltd. Assets and Liabilities are to be taken over at book values. For every 5 equity shares in Yogita Ltd., 6 equity shares of Rs. 10 each in Sindhu Ltd. shall be issued at 10% premium
   • b) In case of Kavita Ltd.
   • 1.7% Preference shareholders of Kavita Ltd. would be allotted 6, 8% Preference shares of
   • 2. 10% Debenture holders would be discharged at par by issue of an equal number of 11% Debentures of Rs. 100 each in Sindhu 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 Rs 10 each in Sindhu Ltd. issued at par You are required to: a) Compute Purchase Consideration
   • b) Give necessary Journal Entries in the books of Sindhu Ltd
3. Q2 Following is the trial balance of Jaggy Ltd. as on 31st March 2023. Fixed asset Net 35,00,000 | 3.45 000 equity shares of Rs Investment in TCS Ltd 2,00,000 10 each (fully paid up) 34,50,000 on Loan from SBI Bank 3,50,000 Finished goods 80,000 Profit and loss account 1,20,000 Cash in hand 50,000 Bills payable 25 Bank balance 85,000 Provision for t 33,000 rovision for tax tax 20,000 Bank overdraft from Unity Advance to staff Bank 50,000 15 marks
   • 1. Face value of the investment was Rs. 1,50,000 and its market value was Rs. 2,50,000
   • 2. The authorized share capital of the company is divided into 500000 equity shares of
   • 3. Loan from SBI is secured against fixed asset of the company
   • 4. Debtors includes debtors worth Rs. 20000 due for more than six months
   • 5. Creditors includes creditors for goods Rs 40,000 remaining for expenses On the basis of trial balance and additional information you are asked to prepare vertical balance sheet as on 31 March 2023 as per the schedule III requirement of the
4. Q3 Savi Investment hold 1,000, 12% Debentures of Rs. 100 each in Pebble Ltd. as on April, Interest is payable on 30" June and 31‘ December each year On 1* June, 2022, 800 Debentures are purchased ex-interest at Rs. 82,000 On 1* November, 2022, 500 Debentures are purchased ex-interest at Rs. 48,000 On 30" November, 2022, 900 Debentures are sold cum-interest for Rs. 92,250 On December, 2022, 600 Debentures are sold ex-interest at Rs. 58,000 The Debentures were quoted at par on March, 2023 Prepare Investment Account valuing closing March, 2023 at cost or market price whichever is lower 15 marks
5. Q3 Following is the balance sheet of Nandu Ltd. as on March 2023. 40000 Equity shares of Rs.10 Goodwill 2,00,000 each fully paid up | Land & Building 350,000 of Rs.10 each fully paid up 2,00,000 2,30,000 9 % Debentures of Rs.10 Interest outstanding on 10,000 Profit & Loss account 50,000 Following scheme of internal reconstruction was approved by the Court: 15 marks
   • 1) Equity shares to be reduced by Rs. 6 per share fully paid up
   • 2) 10% Preference shares to be reduced to Rs. 4 per share fully paid up
   • 3) Assets were revalued as under:
   • 4) All Intangible assets & fictitious assets and losses to be written off fully
   • 5) Creditors were ready to forego 50 % of their claim
   • 6) Debenture holders were ready to accept new 11 % Debentures of Rs. 50,000 in full settlement of their claim they also waived their outstanding interest in full
   • 7) Reconstruction expenses were Rs. 10,000 Pass necessary journal entries and prepare Capital Reduction Account in the books of Nandu
6. Q4 and Priya Ltd. were amalgamated on and from 1“ April, 2023 namely Tara-Priya Ltd. was formed to take over business of both the companies Balance Sheets as on March, 2023 Equity Shares of Rs. | 2,00,00 | 2,50,00 | Land and Building 100 each, fully paid 0 0 | 2,20,000 12% Preference Plant and of Rs.100 each, fully 0 0 80,000 | 1,00,000 Profit and Loss A/e | 20,000 | 30,000 65,000 | 40,000 10% Debentures of 55,000 | 66,000 Bills Receivables 50,000 40,000
   • 1) Tara-Priya Ltd. issued five equity shares, for each equity share of Tara Ltd. and four equity shares, for each equity share of Priya Ltd. The shares are of Rs. 10 each, issued at Rs. 35 each
   • 2) Preference shareholders of both the companies are issued equivalent number of 13% preference shares of new company at Rs. 120 per share (face value Rs. 100)
   • 3) 10% Debenture holders of Tara Ltd. and Priya Ltd. are discharged by Tara-Priya Ltd issuing such number of its 11% debentures of Rs. 100 each so as to maintain the same amount
   • 4) Tara-Priya Ltd. revalued following assets taken over from Tara Ltd. and Priya Ltd You are required to: 1i) Pass Journal Entries in the books of Tara-Priya Ltd. under purchase method AJ Prepare Notes to accounts for the following items of balance sheet. (No need to prepare [08]
   • B] On 1“ January 2022, 5,000 6% debentures of Rs. 100 each of Teja Ltd. were held as investment by Mr. Rakesh at a cost of Rs. 4, 55,000. Interest is payable on December On 1* April 2022, Rs. 60,000 of such debentures were purchased @ Rs. 98 cum-interest On 1* September 2022, Rs. of such debentures were sold at Rs. 96 ex-interest On December 2022, Rs. 2, 00,000 of such debentures were sold at Rs. 99 cum-interest On December 2022, he sold Rs. debentures @ Rs. 95 cum-interest Prepare Investment Account for 6% Debentures of Teja Ltd. in the books of Mr. Rakesh
7. Q5 A) What are the exemptions in application of IFRS? 8 marks
   • B) What are the characteristics of financial statements? 7
8. Q5 Write short notes: (Any 3) 15 marks
   • a) Features of Pooling of Interest Method Purchase Consideration and its methods
   • c) Benefits of adoption of IFRS
   • d) Measurement of Fair Value
   • e) Need of Internal Reconstruction
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   • 31) Pooling of Interest
   • 3) (fair value)

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