BCom TY BCom Sem 5 BCom Sem 5 (2019 2020) Oct 2020 FINANCIAL ACCOUNTING AUDITING PAPER VII FINANCIAL ACCOUNTING Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 (A) State whether the following statements are True or False (any Ten) 10 marks
   • 1. The buy back of shares has to be authorised by Articles of Association
   • 2. Internal reconstruction involves reduction in capital
   • 3. Amount paid on Forfeited shares is added to paid-up capital in the Balance Sheet
   • 4. When the rights are sold without subscribing, no entry is made in Investment A/c
   • 5. Equity shares can be bought-back out of Free reserves
   • 6. Capital Reserve is a non-free reserves
   • 7. Any company can undertake capital reduction
   • 8. Liability in respect of bills discounted is not an Example of contingent liability
   • 9. Short-term investments are carried at its cost price only
   • 10. No company shall buy back its own shares unless the buyback is less than 10%. of the total paid-up capital and free Reserves of the Company
   • 11. In Internal reconstruction, amount of shares surrendered by shareholders is transferred to
   • 12. In Ethical views, ethics remain same at all the time and every place
2. Q1 (B) in the blanks choosing the correct alternative. (any ten) 10 marks
   • 1. 13, the cost of investment sold is to be calculated as per . method
   • 2. The components of workplace ethical behaviour are (honesty, legality, disclosure, all of these)
   • 3. The carrying amount of long term investment is to be shown at (cost, market value, face value, cost or market value whichever is lower)
   • 4. Charging cost of family dinner to be company Is (misappropriation of assets, fraudulent reporting, ethical reporting, all of these)
   • 5. The amount not collected by shareholders should be shown as
   • 6. Before buyback, all the shares must be
   • 7. The ethical issues faced by the accountants include (accuracy, accountability, values and moral, all of these) Payment of dividend is based on. capital Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
   • 9. Schedule III of Companies Act 2013 requires profit and loss account to be prepared
   • 10. Interim dividend of a company can be declared by (shareholders, board of directors, managing director, SEBI)
   • 11. The scheme of Internal reconstruction required sanction from (shareholders, articles of association, court, all of these)
   • 12. Z Ltd. has 8000 equity shares of Rs.100 each fully paid. Each share is sub-divided into equity shares of Rs.10 each. The number of share after sub-division will be
3. Q2 The following is the Balance Sheet of Falguni Limited as on March, 2018. 1,00,000 Equity Shares of | Land & Building 6,50,000 The Shareholders and the board of Directors sanctioned the scheme of reconstruction and the following adjustment should be considered. Preference dividend are in arrears for four years 20 marks
   • 1. The preference shares are to be reduced to Rs.50 each and equity shares to Rs.2 each
   • 2. the preference dividend in arrears 75% to be waived and remaining to be paid in
   • 3. The debenture holders to take over plant and machinery at Rs.6,50,000 in part statisfaction of their claim and balance amount due to them to be converted to 13%
   • 4. Bills payable to be paid off and the creditors agreed to waive Rs.20,000 All intangible and fictitious Assets to be written off
   • 6. The followingAssets to be valued as follows : Furniture Rs.30,000, Stock Rs.60,000, land and building Rs.6,00,000, Sunday Debtors Rs.70,000
   • 7. The company obtained a secured loan of Rs.1,50,000 at the rate of 12% interest by mortaging land and Building, for repayment of bank overdraft, bills payable and reconstruction expanses amounted to Rs.20,000. Pass necessary journal entries to record the above scheme and prepare Capital Reduction Account and Balance Sheet Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
4. Q2 Following is the summarised Balance Sheet of Solar Electronics Limited as on Rs.10 Each Trade Receivables 1,50,000 The company decided to buyback the maximum number of equity shares at the maximum possible price under the law as on 31st March, 2019 Assuming that the Buyback of shares is duly authorised by its articles and necessary resolution is passed by the company towards this buyback; pass necessary Journal Entries in the books of the company. Also prepare Notes to Accounts with respect to Share Capita and Reserves and Surplus as they would appear in Notes forming part of Balance Sheet of the Company as on 31st March, 2019. (Do not prepare Balance Sheet) 20 marks
5. Q3 Following is the Trial balance of Devakinandan Ltd. as on 31st March,2019. [20000 Equity shares of Rs.100 each fully paidup Pref. Shares of [8% Debentures of each [Investment in shares of [Stock on 31stMarch2019 balance with bank of Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting 20 marks
   • 1) Authorised share capital of the company is divided into 50000 equity shares of Rs.100 each and 20000 10% preference shares of Rs.100 each
   • 2) Debentures are secured against the fixed asset of the company
   • 3) Debtors includes debtors Rs.7500 which are due for more than six months
   • 4) Stock on 31 March 2019 includes following Work in progress Rs.20,000
   • 5) Preference dividend for last five years is in arrears
   • 6) Creditors includes creditors for expenses Rs.4,500
   • 7) Bills Receivables includes a dishonoured bill of Rs.2,000 On the basis of given information prepare balance sheet as on 31st March, 2019 as per revised schedule HI of Companies Act
6. Q3 A) Following information is available from the books of Pranali Ltd. Keeping in view all the legal requirements ascertain : 10 marks
   • a) number of Equity Shares which company can buy back at offer price of
   • b) Prepare notes to accounts of Reserve and Surplus On 1/4/2018 Sanket had 50,000 equity shares in Tata Ltd. The face value was Rs.10 each but the book value was Rs.24 per share On 1/6/2018 he purchased 10,000 equity shares in Tata Ltd. at a premium of Rs.6 per On 1/7/2018 the directors of Tata Ltd. issued bonus shares at the rate of one share for Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting On 1/1/2019 he purchased 5000 right shares in Tata Ltd. Rs.10 each at Rs.15 per share On 31/1/2019 he sold 20,000 equity shares in Tata Ltd. of Rs.10 each at Rs.30 per Prepare Investment in Equity Shares of Tata Ltd. Account as it would appear in Sanket's books for the year ended 31st March, 2019
7. Q4 During the year ende 31st March 2019 Mr. Ravi bought and sold the following 12% Debentures of Rs.100 each of ABC Ltd. Interest being payable by ABC Ltd on Ist April and 1st October each year 1/6/18 Bought 1050 debenture at Rs.95 ex-interest 1/9/18 Bought 350 debentures at Rs.90 cum-interest 1/12/18 Sold 700 debentures at Rs.95 ex-interest 1/2/19 Bought 500 debentures at Rs.96 ex-interest Books are closed on 31st March every year. Market price on 31st March,2019 was Rs.90 per debenture. You are required to prepare investment in 12% debenture in ABC Ltd. account for the year Apply AS-13 20 marks
8. Q4 (A) From the following Trial Balance as at 31.3.2019 of Mr.Ganesh Modak Ltd., and the adjustments given prepare the final accounts of the company Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting Closing Stock as on 31.3.2019 was Rs.1,57,500 You are asked to prepare the balance sheet of Mr.Ganesh Modak Ltd. as on 31st March, 2019, giving the information required by the companies Act.of 2013 10 marks
9. Q4 B) is the balance sheet of Nilesh Ltd. as on 31st March,2018. The board of directors decided to go in for internal Reconstruction with the approval of the shareholders. Following adjustments should be considered 10 marks
   • 1. share is reduced to Rs.70 each and preference shares reduced by Rs.20 each
   • 2. Preference dividend and debenture interest is outstanding for current year and it is to be paid off immediately
   • 3. Machinery is to be valued at Rs.4,50,000 Write off Fictitious Assets Pass necessary journal Entries in the book of Nilesh Limited Discuss the implications of unethical behavior for financial reports. Explain (10) the effects of unethical behaviour on financial reporting
   • b) Discuss and explain the Principals Versus Rule based approaches of Ethical Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting Write short notes (any four) (20) 10
   • b) Disclosure of Tangible Assets in Company Balance Sheet
   • d) Maximum Limits on Buyback
   • e) Principal based approach to Professional Code of Ethics Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting Please check whether you have got the right question paper
   • 3) (carrying amount) Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
   • 9) dis Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
   • 3) Fa Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
   • 2) APT aT A Paper Subject Code: 23101 Financial Accounting and Auditing VII - Financial Accounting
   • 2) TAR &4,000/
   • 3) ATA 20,000/
   • a) aire

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