BCom TY BCom Sem 5 BCom Sem 5 (2018 2019) May 2019 Financial Accounting Auditing Paper VII Financial Accounting Question Paper - Mumbai University | munotes

Questions asked in this paper

• (2) Figures to the right indicate full marks

1. Q1 In Fixed Assets Note, Opening Net Block = Opening Gross Block — Opening Depreciation
2. Q2 Shareholders Funds are always non-current Liabilities
3. Q3 Goodwill is classified as Fixed Asset under Schedule III of the Companies Act
4. Q4 Security Premium can be transferred to Capital Reduction Account
5. Q5 A company can subdivide shares of large denomination into shares of smaller denomination
6. Q6 After buy back of equity shares, the debt-equity ratio should not exceed 2:1
7. Q7 Only fully paid up equity shares can be bought back
8. Q8 Interest is calculated on Market Value of securities
9. Q9 Ex-Interest price Less Accrued interest = Cost of the investment
10. Q10 Corporate Social Responsibility policy to be undertaken by the company are specified in the Companies Act, 2013
11. Q11 The Professional Code of Ethics is voluntary for professional body members
12. Q12 Lowest degree of accountants’ ethical behaviour leads to creative accounting
13. Q1 B) Match the following Column A with Column B (any 10 po Rules that must be followed byall Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting 10 marks
14. Q2 Following is the Summarised Balance Sheet of Tiger Ltd. as on 31-3-2018 Shares of each, fully paid up | 6,00,000 | Building 19,50,000 15,000 Equity Shares of 7100 Machinery 70,000 each, fully paid up 15,00,000 | Debtors 2,88,000 Creditors 7,50,000 | Cash and Bank Balance 1,26,000 Note: Preference dividend was in arrears for 2 years The Board of Directors of the company decided to go for internal reconstruction, which was approved by the court and carried on as follows:
    • a. Paid up value of Equity Shares shall be reduced by 50%, face value being
    • b. The Machinery was revalued at
    • c. The value of stock was reduced by
    • d. Building shall be written down to
    • e. Creditors agreed to forego their claims by 10%
    • f. Loan was fully settled for
    • g. Intangible and fictitious assets to be written off
    • h. Cost of reconstruction expenses was paid %5,000
    • i. Arrears of preference dividend are to be settled by issuing 13% debentures of 7100 each fully paid with regard to 80% of their dues and for the balance equity shares of 7100 each (%50 paid up) shall be issued
    • j. Preference share are to be converted into 13% debentures of each fully paid with regard to 80% of their dues and for the balance equity shares of 100 each paid up) shall be
    • k. All equity shareholders agreed to pay the balance amount, making shares fully paid You are required to:
    • i. Pass Journal Entries in the books of the Company (Narration not required)
15. Q2 The Balance Sheet of Aza Ltd as on 31 March 2018 10,000 6% Preference Shares of Goodwill 1,60,000 each fully paid up 10,00,000 | Patents and Trade Marks 40,000 80,000 Equity shares of each fully Building 4,30,000 Accrued interest on Bank Loan 60,000 | Debtors 1,50,000 Creditors 3,10,000 | Cash at Bank 25,000 Cash in hand 5,000 Note: The Preference Dividend is in arrears for 4 years Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting It was decided to reconstruct the Company for which the following Scheme was approved by 1.The 6% Preference Shares shall be converted into 7% Preference Share of %50 each, the number of preference shares remaining the same 2.The Equity Shares shall be reduced to each 3.The amount of bank loan shall be converted into 6% Debentures at 75% of its bcok value
16. Q4 50% of the accrued interest on bank loan is waived off
17. Q5 Arrears of Preference Dividend to be cancelled
18. Q6 Intangible and fictitious assets are to be written of completely 7.The Creditors agreed to waive 30% of their claims and to accept equity shares for in part settlement of their renewed claims 8.The assets are to be revalued as follows: Give journal entries (without narration) and show Notes to Accounts on Share Capital and Reserves & Surplus forming part of Balance Sheet after reconstruction. (15)
19. Q3 The following are the balances extracted from the books of NayanTara Ltd. as on Premises 18,00,000 | Provision for Depreciation on: Calls-in-Arrears 45,000 | -Machinery 99,000 Plant and Machinery 19,80,000 | -Furniture 7,200 Goodwill 2,28,000 | Profit for the year 4,50,000 Cash and Bank Balance 2,28,200 | Sundry Creditors 3,00,000 Provisions for Doubtful Debts 24,900 31 marks
20. Q1 The authorized capital of the Company was %36,00,000 in Equity Shares of %100 each
21. Q2 The Company proposed a final dividend of 10% (excluding interim dividend paid)
22. Q3 Sundry Debtors include due for more than six months
23. Q4 10% Bank Loan is secured against Premises
24. Q5 Sundry Creditors include %60,000 for expenses You are required to prepare the Balance Sheet of NayanTara Ltd. in vertical format along with its notes to accounts as at 31% March, 2018. (15) Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
25. Q3 The following is the trial balance of Payal Ltd. as on 31 March, 2018. You are required to prepare a statement of Profit and Loss in vertical format along with its notes to accounts as on Calls-in-Arrears 10,000 | 30,000 Equity Shares of Building 2,00,000 | each, fully called up 3,00,000 Bad Debts 500 | Provision for Bad Debts 800 Printing and Stationery 8,000 | Sundry Creditors 28,700 Cash at Bank 1,00,000 Cash on Hand 70,000
26. Q1 Charge depreciation- Building at 5%, Machinery at 10%
27. Q2 Write off further and make 5% provision for bad debts
28. Q3 Bills Receivable included dishonored bill of not yet recorded
29. Q4 Goods destroyed by fire were and insurance company accepted claim for 71,800
30. Q5 Goods costing sent on sale or return basis for which no intimation is received from customer, have been treated as sales at a price of
31. Q6 20% dividend is proposed after transfer of to tax provision
32. Q7 Stock as on March, 2018 was %1,20,000. 15 marks
33. Q4 On 1/4/2017 Dr. Jude holds 2,000 10 % Debentures of each in JR Ltd. at a cost of During the year he purchased and sold debentures as follows:
    • i. On 1/6/2017, 1,000 10 % Debentures of each are purchased cum-interest at a cost
    • ii. On 1/11/2017, 1,200 10 % Debentures of 100 each are purchased ex-interest at a cost
    • iii. On 30/11/2017, 1,000 10 % Debentures of each are sold ex-interest at a cost of
    • iv. On 1/12/2017, 1,500 10 % Debentures of each are sold cum-interest at a cost of
    • v. On 1/2/2018, 500 10 % Debentures of 100 each are purchased cum-interest at a cost of
    • vi. Interest is payable on June and 31% December every year. The Books of accounts are closed on 31 March every year Prepare 10% Debenture Account in the books of Dr. Jude for the year ends on 31 March, Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
34. Q4 Ms. Barkha gives you her following details of investment in equity shares of MP Ltd having face value of each On 21” March, 2018 the Company announced right issue of equity shares in the ratio of 3 : 2 She purchased all right issues at market price of 24 per share Market Price of shares on 31 March, 2018 is Prepare Equity Shares Account in Ms. Barkha’s books for the year ended March, 2018.(15)
35. Q5 The summarized Balance Sheet of Bhagya Ltd. as on 31-03-2018 is as follows: Equity shares of 710 each fully paid 50,00,000 Cash at Bank 30,00,000 The Company decided to buy back 1,00,000 equity shares of each at an offer price of per share. For this purpose the company took the following steps:
    • i) Issued 3,000 8% Preference shares of 7100 each at a premium of 5%
    • ii) Sold 70% of Investments at a profit of 10% Pass Journal entries in the books (without narration) of the Company and prepare Notes to Accounts with respect to Share Capital, Reserves & Surplus and Cash & Cash Equivalent as on (Do not prepare Balance Sheet) (15) Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
36. Q5 The following is the Balance Sheet of Suyash Ltd. as on 31-03-2018: Authorised: Land and Building 30,00,000 10,00,000 Equity shares of 710 Plant & Machinery 30,00,000 8,00,000 Equity Shares of Current Assets, Loans & each, paid up 64,00,000 | Advances Reserves and Surplus: Stock 19,00,000 Profit and Loss Account 45,00,000 The Company decides to buy back the maximum number of equity shares as may be permitted by law at a price of per share. Find out maximum number of shares to be bought back and Pass journal entries (without narration) in the books of Suyash Ltd. and prepare Notes to Accounts with respect to Share Capital and Cash and Cash Equivalent as on March 2018 (Do not prepare Balance Sheet) . (15)
37. Q6 A) What is Ethical Behaviour? Explain the principles of Accounting Ethics? 10 marks
    • B) Distinguish Between Internal and External Reconstructions? 10
38. Q6 Write Short Notes on (Any Four) 20 marks
    • i. Conditions for buyback of shares
    • ii. Meaning and types of Whistle Blowing
    • iii. | Need for reconstruction of a company
    • iv. Outstanding Expenses and Prepaid Expenses
    • v. Ex and Cum-Interest Purchase Price
    • vi. Laws and Ethics Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
39. Q2 got Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
40. Q3 fet ART Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
41. Q3 F Gal
42. Q3 aa fa Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
43. Q2 4% HU
44. Q3 ale &. Hl MIG 20% AT
    • i) 08.08. US, F 20% F %,0&,000
    • iv) 08.22. SF 20% F Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
    • H. HU

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