BCom TY BCom Sem 5 BCom Sem 5 (2012 2015) 2015 Financial A C And Auditing Novembar Question Paper - Mumbai University | munotes

Questions asked in this paper

• (2) Figures to the right indicate full marks

1. Q4 sentence (Any eight) :— 3 _ (1) vendor companies are not liquidated. fit f
   • (2) In Internal Reconstruction, consolidation of shares results in profit for
   • (3) Debenture is a fixed income bearing security
   • (4) Interest on debentures is calculated on the face value of debentures
   • (5) Arrears of preference dividend is shown under ‘other Current ! Liabilities’ in the Balance Sheet of a company
   • (6) No journal entry is required for cancellation of unissued share capital at the time of Internal Reconstruction ‘Live Stock’ is shown under ‘Tangible fixed Asset’ Balance
   • (8) IFRS - 1 deals’ with first-time adoption of International. Financial
   • (9) Balance in Capital Reduction Account is transferred to Capital Reserve
   • (10) On amalgamation, payment made to debenture holders in considered as a part of purchase consideration
   • (B) Fill inthe blanks and rewirte the sentence (Any seven) :— 7
   • (1) IFRS stands for
   • (2) ‘Interest accrued and due on debentures’ will appear under the head in the Balance Sheet of a company
   • (3) On amalgamation, Preliminary Expenses in the Balance Sheet of vendor are transferred to Account
   • (4) Amalgamation of companies is governed by The scheme of Internal involves in the Balance
   • (6) Computer software is shown under the head Sheet of a company
   • (7) When Short Term Investments are sold, profit.on such sale is (Profit and Loss Account/Capital Reserve Account) Internal Reconstruction, the balance in Capital Reduction Account (Issue of Bonus Shares/writing off fictitious assets)
   • (9) Profit on sale of short term investments is calculated using the formula,
   • (10) ‘Convergence’ with IFRS rename local Accounting to achieve harmony in relation
2. Q2 M/s. Unwell Ltd. has incurred heavy losses since past few years. The company adopted of reconstruction on the basis of following summarised Balance Sheet. 15 Summarised Balance Sheet of Unwell Ltd. as on March 2014 1,60,000 Shares of 10 each fully paid. 16,00,000 4,000, 10% Shares of 100 each fully paid 4,00,000 Interest accrued and due on debentures 2,00,000 Land and Building Cash at Bank 3,60,000 Profit and Loss Account (Dr. balance) 14,00,000 The following-scheme of reconstruction was approved by the court —
   • (1) 10% Preference Shares to be reduced by & 20 per share
   • (2) Bquity shares to be reduced by & 5 per share
   • (3) Debenture holders agreed to settle their claim fully by issue of New 11% Debentures of 14,00,000. They also agree to forgo 50% of their interest The payment of remaining 50% of interest to be made immediately
   • (4) Computer was to be written down by & 40,000
   • (S) Land and Building and to be appreciated by 10%
   • (6) Stock to be appreciated by 60,000/
   • (7) Fictitious Assets and debit balance of Profit and Loss Account to be written
   • (8) Cost of Reconstruction was & 50,000
   • (9) 75% of the creditors agreed to forgo their claims by 10%
   • (10) Reduce debtors by & 70,000 are required to pass journal entrics to record the above transactions in the books of M/s Unwell Ltd Following is the Balance Sheet of M/s. High Hopes Ltd. as on 31" March 2014. 15 Cumulative preference shares of & 10 each 12,00,000 Equity Shares of 10 each 20,00,000 Profit and Loss Account (Dr. balance) 18,00,000 Note : Preference Dividend was in arrears for 3 Following scheme of Reconstruction was approved :—
   • (1) Equity shares to be reduced to & 2 each fully paid
   • (2) 12% cumulative Preference Shares to be reduced to 2 each fully paid
   • (3) Directors to give short term loan of 10,00,000 to the company
   • (4) Depreciate Land and Building and Plant & Machinery by 10%
   • (5) Reduce debtors by. 15%
   • (6) Reduce stock to 60% of its value The tax liabili
   • (7) te for 8,50,000 and the reconstruction expenses
   • (8) Sundry creditors waived 20% of their claims
   • (9) 11% Debentures to be cany, of erted into 13% Debentures of & 6,00,000 in full
   • (10) Write off fictitious assets and debit balance in profit and loss account are required to prepare
   • (2) Notes to Accounts forming part of the Balance Sheet, after reconstruction, as required under Revised Schedule VI in respect of
   • (i) Share Capital
   • (ii) Reserve and Surplus
   • (iii) Cash and Cash equivalent (Do not prepare the Balance Sheet) 3, The following transactions of Mr. Narayan took place during the year ended Ist April 2013 Purchased Rs. 12,00,000, 8% Bonds at Rs. 80.50 cum-interest Interest is payable on 1st November and 1st May every year. Face Value of each Bond is Rs. 100/ 12th April 2013 Purchased 1,00,000 Equity Shares of Rs. 10 each in X Ltd. for Rs Ist May Received half-year’s interest on 8% Bonds 15th May 2013 X Ltd. made Bonus issue of three Equity shares for every two 15th June Mr. Narayan sold 1,25,000 Bonus shares for Rs. 20 each Ist Oct. Sold Rs. 3,00,000, 8% Bonds at Rs. 81 ex-interest 8% Bond account and Equity shares in Ltd. account in the books of Mr. Narayan for the year ended 31.03.2014 are aS follows :— Ltd. on the date of amalgamation ed Balance Sheets as on 31/03/2014 of Ra, 100 each Cash and Bank Balance 14,000 31,000 the companies at book value paid purchase consideration by alloting fully paid shares of Rs. 100/- each Prepare statement of Purchase Consideration. Give Opening Journal entries in the books of ‘Z’ Ltd. (Narration not required)
   • (b) The following transactions of Miss Naina took Place during the year ended 7 12/04/2013 Purchased 1,00,000 Equity Shares of Rs. 10/- each in 15/05/2013 “ABC” Ltd. made a Bonus issue of 3 Equity Shares for 30/06/2013 Naina sold 1,25,000 Bonus shares for Rs. 20/- each Prepare ‘Equity Shares in ABC Ltd’. Account in the Books of Miss Naina for the year ended 31/3/2014 following is the summarised Balance Sheet of Vishal Ltd. as on 31" March, 2014.15 Issued and Capital: Assets 1,00,000 Vaman Ltd. Agreed to take over Vishal Ltd. on the following terms :—
   • (1) Vaman Ltd. Agreed to take over all the assets and Liabilities. (Intangible assets are not taken over.)
   • (2) The fixed and current assets of Vishal Ltd. are to be considered to be worth
   • (3) The Purchase consideration is to be paid one-quarter in cash and the balance equity shares which are issued at the market price
   • (4) Liquidation expenses amounted to Rs. 600 agreed to be paid by Vishal Market value per share of Vaman Ltd. is Rs. 12
   • (6) Debentures of Vishal Ltd. were taken over and paid by Vaman Ltd
   • (7) The amalgamation is in nature of purchase You. are required to prepare :— Statement of Purchase Consideration
   • (b) Necessary Ledger accounts in the books of Vishal Ltd The following is the Trial Balance of Radhika Ltd. as on 31" March, 2014 pixed Assets (Net Block) | Shares of Rs. 100 each) Advance 1,94,800 | Loan from Bank of Baroda Hand Cp 1,20,000 | Provision for Taxation — S7P 22,000 Balance 9,88,000 | Net Profit for the year ~ 5,40,000 Share Issue Expenses’ — 53,200 | Profit and — Investments (at cost) 1,50,000 | Sundry Creditors - 2,80,000
3. Q1 Transfer to General Reserve Rs. 1,00,000
4. Q3 Out of debtors, debts due for more than six months were Rs. 1,04,000
5. Q4 Sundry Creditors included creditors for goods Rs. 2,10,000 while the remaining are
6. Q5 Loan from Bank of Baroda is secured against stock
7. Q6 Market value of investments is Rs. 1,78,000 while its face value is Rs. 1,60,000 7, Ignore previous year figures and corporate dividend tax Prepare Balance Sheet as on 31* March, 2014 as per Revised Schedule VI requirements, after considering the above information
8. Q5 (a) Explain the need for convergence with IFRS in India
   • (b) Explain the difference between Internal and External Reconstruction of the 7
9. Q5 Write short notes on any three of the following :— - 15 marks
   • (8) Methods of Calculating Purchase Consideration at the time of Amalgamation
   • (6) Internal Reconstruction of Companies
   • (z) Bonus Shares and Right Shares Ex-interest and Cum-interest transactions in Investment Accounting,
   • (e) Contingent liability

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