AC-2697 Second Year B. Com, (Sem. IV) Examination March/April - 2015. Advanced Accounting & Auditing : Paper - IV Time: Hours] [Total Marks : 50 Bou: (1) ct Mlaidl Goiad Sweadl wa ae aa, Fillup strictly the detalle of signe on your answer book. Name ofthe Examination [Second Year B. Com. (Sem. 4) Name ofthe Subject: ADVANCED ACCOUNTING & AUDITING : PAPER -4 (2) well ougett vis nari YU ge eald d. (3) wal edd vale otiaigd cata. 1 MAL Yee wale Dud) : (ot) Ae wud ued tae WB HA Tell MMA BD HA ald : (1) arid ue: 4:5, (2) sue Hout did: Tel 10012, (3) aah Real oie sal aide: 31° sel, (4) eds oer sate ge Qeuet acu uel deal get 218 Mata AaUeL sec AL UBL (5) adsaor, vere aA Rave sate Aewetg MALE 2:31 ad, (6) euuett udaied s2 egied 62 20% 6a, F -llHell ues £2 S2ab 10% BL weil. (7) ga ave 3. 13,00,000. AC-2697] 1 (Contd...(a) (s) AC-2697] “AAD wR Yell Bou zagud “e-ysattd ws VaR A 8 2. (1) s28et veered aed «dl... 8,00,000 (2) aug atl s2aaicl waa, 2,00,000 (3) usar arth tet-asaid maietiell od (ru). 60,000 (4) serie seared tH Bee atta rue ad oven cue 8. M2 48 ur aauadar 2. 2,00,0004 BAss mez sf. (5) wise hl arasdriell saad 1,50,000 (6) war atl asada asiaell 1,20,000 AAD Bd well 4M vats deeb dul Dusvri, 2 aud avll ¢ 8. 20,0001 siete andr Ata ware al. Gudsd AMRd vamelel AS Maras sa all, acl 2. 14,0004i Yetta Seat wid eel. aH eel leu duel Wade 2. 12,600 28% aya ad adi. Ach wid well yar vid due sd: 2 (1) geist aRaAE YEA oUADD = 2. @ 10% wh Rea AWM eee 2,00,000 Gi) marta dO -+ 30,000 Gi) Ach d.. 25,000 Gv) BR AND Shalt oe eeeeeeeseee 10,000 (2) grt Dera Ada wmv ale wd wx 3. 2,20,000. (3) ell GA tl surtle ele ell. ell fAlnti 95% Ysa Coed we, (4) walhasd Faamiaiel vie 3. 10,000. 2 [Contd...2 Aauel sue Roce Dusriel B1-3-BOTBat De MAL oA 5 aA Bs Gureuh st | wm ud 2a Aehdsed. 20,000 | -t1-qsait ig, gat awd 22,400} (1/4/2014) 1,358,400 wad ale BD) AV, 95 4,39,456 (31/3/2015) 1,68,000 | afield shar 28,000 ated 14,800 | RAR Ra FL adad wal 1,36,000 | ala eur Rae azia 6,000 | Bou Det asda aay 12% at RAR Bhs): (at. 31/3/2019 dee SRA aa we 44,800 | 2a saint 8.) Dera ar ve 12,000 | auasdael aad mUGd asda (31/3/2014) muasdad = & 1OD As Aa Wy. 2019/14 72,000 | oud Sad ar 2014/15 1,04,000 | 3. 10-0 As Ran yBya ala 2,800 | ered 10%rtt | Reva ar RRAME Rewer ae 2,40,000 ded wd 2,52,000 | Aeierd 14,944 aie 4 35,680 | ars dt 3,72,220 | Raa ay 14,400 2013-140 at ae | aur Ysda auasdad 9,600 | dat sa 3,50 | nat) '2,80,000 | eat bel Reati ae | (2s a. 100 Gu 3,20,000 | Neg. 8 os) wll -2,40,000 rae, - al 3,20,000, BARR wea Fett Asied ‘96,000 | ss [Aes Peas 4,170,720 | se BNale | 28, 18,720 AC-2697] 3 [Contd...AAA wud wed x4 8 : (1) (2) (3 (4) (5) (6) (7) ‘yale auesell HHI 3. 3,680 RA uaa FR Asiedat any anda aid 8. Matt UR 10% MA Mat2Hall UR 5% AY BAL Marais £2. 2013/14 masdaifl esrel Yl ad B WA 3. 81,600 warmed val ad. 2014/15 We raster Arad Dor satel 50% AX seared, al. 1/10/2014a1 dy ROAva Reza dz 5% MPAA HRA SAUL BEAL Gall, lt) 1/10/2O14eu Yel Agra Ae Gury, RRs asda dd Ver Nera dredlesA asda 26 det uid Gal el. a Pray au easel eee ealadl AS aera, auiddl a ed. WIMLAL BAHL MLA. 20,000 AA BAAR Yad FR wud 2. 16,000 ated sa. ala wala AARFr RBs ABrcrvsuUrtt 3. 9,600 aaa a &. APF R%erA 3. 10,976 Ndxaigl Asaard B. Reseda 8% AA aris RRss ad24 od A-10% Ad dazu RRs oem sl d. Gon wisi arel DA Acie duel a aulils Cau aur sd. 3 at. 1/4/2014 ef Aw Rd HO waded Qa Az Bag Rl al. 1/7/2014 Dee elwel aS. saz agar 1/5/2014 aed oid 8. buf WARD acl. vids Bad 9. '3,60,000 ssh srauri adh ed. Aanra ude Bua 2 2400 SAA dz 10% PAA audi mMieAL AA OAL SH 12% CUI BBA 31/10/2014a1 Qe saat aad AC-2697] eddl. 13 4 [Contd...Hdl ADusni 31/3/2015 Av lal afd el Rad aM aut: sul -wrag J a udaut wd, PUAS HIE LILY... 2,400 wal... - 2,56,800 so1- 28,500 +1+ 5,000 --- 10,000 Mur ate... Asia dave wz Aawdad your a wal. an Uva MAA sll oiler ete a garage A Riser al... ane uel + (1) dul ave exBeat Ae sel usar (otias ste OLS ong ala) viluell Wain wel arial 10% aM wl. ate agri 3 mmadi mat eis wari stad sel, (2) 3. 2,000-0 warms aunt Uden Baer aaidl scl. (3), Asti 30/9/2014 Ay aU wai, (4) aq@ aael maw mL at Hid aida Kama aad d. (5) -ituel waar 5 A uel Ue 7 sefard £2 HMA 40m seal eal, AC-2697] 5 [Contd...) aig ma 2 mat az wRs 3. 2,500 AA 2A aureus 3. 3,000 A asaaini rua] 8. (7) at, 1/1/2015-u de wdleed 3. 500,000 ial ur-tt aulils 10% wat aude Gur weuda aaumi wh B. atl eleell udei AA UL wad vsi-dsutt evllad Yas war A. fers t maa 3 Ant Bid att. 31/3/2015-n Dod wy ardy AA yx B= 13 seat | 2am | Prascid 2H Rett 3, HOWL As Rar wad 60,000 OE ar 4,00,000 | lt - eRett 3. 100 As MSI 1,50,000 | Pat 10% Reva az 2,50,000 | aeladl 3,00,000 12% Ral 1,50,000 | als 4,00,000 | Rawal uA our 18,000 | Zaire 1,00,000 | aad 82,000 | dss 110,000 | adored waren’ = wats wal 45,000 | 2 ald Reza a2 ARs set ysut Mid 35,000 saad ud 8. | '9,00,000 | _9,00,000 | AA wide yea Deu war sai eudl WA Ae srani ddl + (1) sills Re. ell add sul 2. 10,00,000-1 anise anwar 3 & 10) AAs Rat 1,00,000 SHA Ari aud B, A det Rnd 4 wad aa wud. (2) Reda de D|sdA yl sullen As Art reamti acl seller 10 SEA az yy oud war eva dx aar BRs-s vA eds 3. 100 Heart td Suen 20 SEd a2 yyw UT BAL BILAL. (3) det Bint As SAA are sear sills R. 5 HFA az ye med aa eal. AC-2697], 6 [Contd...(4) qf Surflen RAW Deda ad syle 15%at Rawal Ad Ga mua 3 Fell dae oussell Reel & aias Hol 2B duu Wat aut HeaLtl tll Hell Deel 9 Vat a Yo Bd IMAL, 6 (5) Art Rant Amer aise 9H Dose sel A ude eH MD yu aud ada Sad a2 sua. (6) welt Bra a. 3,50,000, well Baa 20% adsl, Zarerrniel 2. 30,000 Hell a3 a vel ae AIM aimatal B. wflarereiel Bard well fel calawtd mld Fell oul eH -wlt-rsieell HeLa, (7) Bett Bo Yara wal g: 20,000 siRls R.A olaaard d. (8), silts Rie oudio 22 M82 Yeo He WLsL F yy OU BAL Edi. duz 62 det Riu aw : (1) We Pasa Bate vg (2) Aadesdar mudi amr sills Ried azeucy ag Braz. 4 wis Bid at. 31/3/2015 ded wg azdy AA yw B : 12 yd-eai 264! Pasa) 4 ee a. 1000 Bs Aa wad 80,000 OA a yu oud 8,20,000 } Adler asd 1,60,000 8% al Reva de eds Naive 2. 100% 1,60,000 | aeflad 2,16,000 10% wt Rawal 1,60,000 | sie 80,000 Raaaly oud oury 16,000 | 221s. 1,44,000 Reseed da 64,000 | @areie 78,400 Aes alaauee 88,400 | suuths wal 32,000 ated 80,000 } -t¢i-ysalin Mid, 48,000 8,38,400 8,838,400 = AC-2697] 7 [Contd....4d waist Der LA wud Boyne creel 9 sari aud. (1) 8BRA,a2,, dads 2, 800 vase. (2) Reva az, Ards 2. 60 yell Hatsd. (3) Raat Qed avdy w_ ous Assi dard WA Darel Ae al wll rad: Asael W 3. 80,0001 aus Brae Adles Pasa 3. 1,12,000-1 Bud af dard edlsef. (4) /Rs2dA Adel Aaa uarae gV 80% v4 SEA Arai 10% ae Dsl AA CUAL 25H well sale edlsief. (5) Oude Brel Gurr reat’ Bt Ws diel AY Garde Mauve Wil amar gard B. Ud aude arate B WA yA sat ued wg aay AUR sad 8. maat 4 asia aed: A A wen) 12 (1) elaed ude agi GuadPrat (2) atlas yeaa S280, (3) 4d vas A ductal aad (4) sss warerd Geiser wld. (5). steubts miss, wad Ae, wg aad. AC-2697) 8 [Contd...ENGLISH VERSION Instructions : (1) As per the instruction no. 1 of page no. 1. @) Figures to the right indicate full marks of the questions. (3). Show the necessary calculation as a part of answer. 1 Give the answer as per instruction : (@) From the following information, find out pre and 3 post incorporation gross profit. (1) Time ratio 2 4:5 (2) - Date of incorporation 1*t November (8) Closing date of first A/c. 31% March. (4) The total sales of each’ three monthvis three times than the total sales of than after total three months. ®) Sales proportion of October, November and December month was 2:3; 1. @) Rate of gross profit prior to incorporation is 20% of sales which is 10% less than the rate of gross profit for post-incorporation period. (Total sales : Rs. 13,00,000. (b) From the following information prepare vertical 3 Profit and Loss Statement : 90° Ane @) Net profit before tax ... (2) Current year income tax provision (8) Previous year balance of Profit and Loss A/c. . (4) The directors eee a dividend of Rs. 2, 00, 000 on equity share capital after providing statutory minimum transfer to general reserve. 3 (©) Last year, income, tax provision .. . 1,50,000 ..- 1,20,000 ©) Last year income tax assessment . AC-2697) 9 [Contd...© From the following information pass journal 2 entries with regard to capital reduction : There was a contingent liability of Rs. 20,000 for workmen:compensation. Above contingent liability for which no provision had been made was settled at Rs. 14,000, however the amount of Rs. 12,600 was recovered from insurance company. @ From the following information prepare 2 Reconstruction Account : ()Balance‘as per’ old balance sheet : @ 10% pref. share capital ... Gi) Reserve fund... Gi) Bills receivable «.. (iv) Share underwriting commission .......; @) Old pref. shareholders received Rs. 2,20,000 from the new company as consideration. @) Bills receivable is not taken over by new company, 95% was realized from bills receivable in full settlement. we? (4) Realisation account loss Rs. 10,000. AC-2697] 10 [Contd...2 The books of Chaitali Company Ltd show the following 15 Balance as on 31-3-2015 : AC-2697) bt Debit _ | Amount] Greait Amount | Bills Receivables 20,000| P & L Ale. (1/4/2014) 158,400 Loose Tools 22,400 | Gross Profit 4,30,456 Stock, of Goods, Securities Premium 28,000 (31/3/2015) 168,000 | Debenture Debtors 44,800 | Rédettiption Fund 196,000 Administrative Expenses |. 1,96,000 | Interest Received 25,600 Discount on Debentures 6,000 | General Reserve 480,000 Interim dividend paid 12% Debentures (to be On Equity Shares 44,800 | redeemed on_31/3/2019)._}. 2,40,000 On Preference Shares 12,000 | Provision for Income Advance Payment ‘tax (1/8/2014) 84,000 of Income Tax Equity Shares of Rs. 10 2019/14 ® 72,000} each fully paid up 6,40,000 2014/15 1,04,000 | 10% Redeemable Preference Bad Debts 2,900. Shares of Re. 10 Preference Sharcholder's each fully paid up. 2,40,000 Accouitt 2.52,000 | Creditors 14944 Audit Feos 35,680 | Bank Loan 3,72,820 Debenture Interest 14,400 Additional Income Tax pail forthe year 2013/14), .9.600, Insurance Premium 3,520 Buildings) 2 80,000 Shares of Daksha Co. Ltd) (each of Rs. 10 3,20,000 Rs. 8 paid up) Land B 2,40,000 Plant - machinery @,) 3,20,000 Debenture Redemption Fund Investment, 96,000, Cash / Bank Balance 470,720 Custom Deposit, 144,000 28 18,720 28,18,720 [ae re [Contd...The following additional information is available : @ Amount of interest received ii¢ludes Rs. 3,680 received on Debenture Redemption Fund Investments. @) Provide for depreciation at 10% on Building and at 5% on Plant — Machinery. @) Assessment of Income Tax for the year 2013/14 is completed and a liability of Rs. 81,600;has been fixed. Provision for Incomie ‘Tax for the year 2014/15 is to’be made at’ 50% of net profit of the year. (4) Redeemable Preference Shares were redeemed on 1/10/2014 at..a. premium of 5%. The dividend on Preference Shares was paid tip to 1/10/2014. The amount paid to the Preference Shareholders was debited to their account. Except this, no other éntry showing the effect of these transactions has been passed. (©) Transfer for Rs. 20,000 to General Reserve Account and Rs. 16,000 to Debenture Redemption Fund Account, ©) Administrative Expenses include Rs. 9,600 remuneration paid to Managing Director. Remuneration Rs. 10,976 is to be paid to Managing Director. a (7) The directors had distributed interim dividend at 8% and have proposed a final dividend of 10%! Prepare Final account of Chaitali Company Ltd. by Vertical Balance Sheet method: AC-2697] 12 [Contd...83 Devendra Ltd was incorporated on_1/7/2014 to purchase 13 running business of Neha Ltd. from 1/4/2014. According to agreement profit "eamed during’ year (after 1/5/2014) will belong to the’ dompany: Purchase consideration was fixed at Rs.'3,60,000. As’a part payment 2,400 Equity Shares were given at 10% premium and remaining amount was paid on 31/10/2014 with 12% interest. Gt ‘As on 31/3/2015 following information were available from the books of company. Particulars Amount Sales :- Company period... , 384,000 Prior period. 96,000 aia inward <- 2,400 \ases 1. 2;56,800 Depreciation... . 28,500 Bad debts Bad debts returned Preliminary expenses written. off... Rent... Advertisement expenses (Rs. 500 per month as per contract) .... Salaries .... «Interest on capital Loss on sale of investment Salaries to salesmen . General expenses Donation to’political party Share transfer fees... Directors fee . AC-2697] 13 [Contd...Other Information: @ @ @) @ © © ‘The cost of goods sold (including carriage inward) for the company period had increased by. 10%, as compared to pre - incorporation period. No stocks were carried either at the beginning or at the end. Bad debts of Rs. 2,000 are related to the debtors of pre-incorporation period, Investments are sold on 30/9/2014. Bad debts return was pertaining to the bad debts written off in the last year. Before incorporation there were 5 employees working and after incorporation 7 employees were working every month, Rent was paid at Rs. 2,500 per month for first’ two months, thereafter it was paid at Rs. 3,000 per month, Depreciation on assets include depreciation at 10% per annual on machinery of Rs. 5,00,000 purchased on 1st January 2015. You are required to prepare the statement showing profit or loss prior to and after incorporation. oR 3 e following is the Balance Sheet of Heena Itd. as 13 on 31/3/2015 : Liabilities [Amount [Assets [Amount Equity Shares of Goodwill 60,000 Rs. 50 each SOOO Sh | 4,00,000 | Land and 10% Preference Shares Building 150,000 Of Rs.-100 each 2SO0 $F 950,000 | Machinery 8,00,000 12% Debentures 1,50,000 | Stock 1,00,000 Debenture interest accrued 18,000 | Debtors 1,00,000 Creditors 82,000 | Cash 110,000 Contingent liabilities : Preliminary Expenses 45,000 2 years preference ‘Profit and Loss Account 35,000 dividend is in arrears 900,000 300,000 AC-2697] 14 [Contd...‘The following scheme of reconstruction was passed and sanctioned : (1) New company by the name of Kartik, Ltd, to take over the business of Heena Ltd. with an authorised capital of Rs. 10,00,000 divided into 1,00,000 Equity Shares of Rs. 10 each, Q) Preference Shareholders are to be given fully paid 10 Equity Shares of new company for every one share held in the old company. For each Rs. 100 arrears of dividend 20 fully paid Equity shares of new company to be given. (Five fully paid equity shares of Kartik Ltd. to be given in exchange of every one share held in Heena Ltd. (4) Debenture holders of the old company should be given 15% debentures of the new company, of such value as to given them interest annually, which they used to receive earlier, For their accrued interest, shares of equal amount are issued at par. (© ‘Half amount to be paid in cash to the creditors of Heena Ltd. and for the remaining amount fully paid equity shares were to be given. (6) The Machinery is to be valued at Rs. 3,50,000, Stock to be valued 20% less, of the debtors Rs. 30,000 are not receivable and are doubtful and to be written off. Land and Building being highly understated, the remaining amount to be adjusted to Land and Building. () Winding up expenses of Heena Ltd. amounted to Rs. 20,000 which is to be borne by Kartik Ltd. (8). The remaining shares of the Kartik Ltd were issued to the public at par and are fully paid. Prepare : (1 Realisation Account inthe books of Heena Ltd. (2) Shareholders Account of Heena Ltd. and Balance Sheet of Kartik Ltd. after applying the scheme. AC-2697] 15 [Contd...4 The Balance Shegt,of Radhika Ltd as on 31/3/2015 12 was as follow : Liabilities Equity Shares of 820 Rs, 100 each fully paid 8% Preference Shares of Rs, 100 each 1600 10% Debentures Accrued interest on Debentures Directors Loan Bank Overdraft Creditors Assets Goodwill, 9,20,000 | Freehold Property, Plants and 160,000 | Machinery 1,60,000 | ‘rivestiidnts 16,000 | Debtors 64,000 | Preliminary Expenses 38400'} Profitoandl' Loss ‘Account 216 214 tear 36 The scheme’ of ‘capital reduction sanctioned by The Tribunal is! as under : (1) Equity Shares are'to be written down by Rs. 80 each. @) Preference Shares are to be written down to Rs, 60 each. (B)_ The Debenture holders agreed to have their, accrued and due interest paid in cash and to take over Freehold Property, having a book value of Rs. 80,000 at a valuation of Rs. 1,12,000 inGartpayment of amount due to them. @) __ The Directors accepts settlement of their loan as to 80% of thereof by allotment of Equity Shares, as to 10% in cash and the balance being waived. (©) The remaining amount is to be utilised in writing down Plant and Stock in the proportion to their book values. You. are required to show the Journal Entries and Balance Sheet after Capital Reduction, OR 4 Write short notes : (any three) 12 QQ) Uses of Profit Prior to:Incorporation. @) Reasons for Internal Reconstruction. (8) The Provisions of Companies Act Relating to Capital Reduction, 4) Contingent Liabilities with Examples. ©) Vertical Balance Sheet with: Imaginary Figures, AC-2697] 16 {17500 ]