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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
M.Com.DEGREE EXAMINATION COMMERCE
THIRDSEMESTER APRIL 2018
16PCO3MC01- ADVANCED CORPORATE ACCOUNTING
Date: 24-04-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
Section: A
Answer All Questions: 10 x 2 20
What are the fundamental assumptions underlying the preparation of and presentation of financial statements as per
What is a Level 1 enterprise?
What is contingent asset?
What do you understand by Substance over form?
What is Depreciable Asset as per
Give an example for a prior period item.
Write a short note on Cost of Capital and Minority Interest.
What is purchase Consideration according to AS14?
What do you understand by Value Added?
10) What is intrinsic Value? How is it computed?
Section B
Answer any Four only: 4 x 10 40
11) What is Pooling of Interest Method? Explain its features and significance.
12) Give a rough format of a Gross Value Added Statement for a Manufacturing
Firm and explain the advantages of value added statement.
13) Explain the various methods of valuation of human resources.
14) From the following particulars relating to A Ltd Calculate the profit for
Managerial Remuneration. and also calculate the maximum commission
permissible to Manager and Part time directors. Profit earned by the company
during the year ended 31/03.2015 Rs.2,50,000 Depreciation on fixed assets Rs. 47,800
Depreciation admissible as per the income tax rules 32,800
Provision for income tax Rs.1,22,500
Capital expenditure charged in general expenses to P&L A/C Rs.12,500
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15) Balance sheet of H.Ltd, and S.Ltd as on 31.12.2016 given below:
Liabilities
H Ltd
Rs.
S Ltd
Rs.
Assets
H Ltd
Rs.
S Ltd
Rs.
Share Capital Rs.1 each)
1,00,000
50,000
Sundry Assets
1,70,000
1,00,000
General Reserve
50,000
4000 shares in S Ltd
50,000
Profit and Loss a/c
40,000
18,000
Creditors
30,000
32,000
2,20,000
1,00,000
2,20,000
1,00,000
Shares were purchased by H.Ltd. in S.Ltd. on 30th June, 2016. On 1st January, 2016 the balance sheet of S.Ltd. showed loss of Rs.30, 000 which was written off out of the profits earned during 2016. Profits are assumed to accrue evenly throughout the year. Prepare consolidated Balance sheet.
16) A Ltd and B Ltd have agreed upon the values of Assets and Liabilities as shown in the following Balance sheets.
Liabilities
A Ltd
Rs.
B Ltd
Rs.
Assets
A Ltd
Rs.
B Ltd
Rs.
Share Capital
20,00,000
10,00,000
Sundry Assets
20,00,000
12,00,000
Reserves
2,00,000
5,00,000
10,000 shares in B Ltd
2,00,000
10,000 shares in A Ltd
3,00,000
22,00,000
15,00,000
22,00,000
15,00,000
Ascertain the amount due to outsiders, if A Ltd and B Ltd decide to amalgamate and form C Ltd. Also show the purchase consideration payable if A Ltd absorbs the B Ltd.
17) When do you recognize revenue in the following cases as per
Sales of Goods; Rendering of services
Section C
Answer any two only: 2 x 20 40
18)Moon and Star Ltd is a company with an authorized capital of Rs.5, 00,000 divided into 5,000 equity
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shares of Rs. 100 each on 31.12.2011 of which 2,500 shares were fully called up. The following are the balances extracted from the ledger as on 31.12.2011.
Debit
Rs.
Credit
Rs.
Opening Stock
Purchases
Wages
Discount allowed
Insurance (up to 31.03.2012)
Salaries
Rent
General Expenses
Printing
Advertisements
Bonus
Debtors
Plant
Furniture
Bank
Bad debts
Call in arrears
Interest on Debenture
50,000
2,00,000
70,000
4,200
6,720
18,500
11,000
8,950
2,400
3,800
10,500
38,700
1,80,500
2,17,100
34,700
3,200
5,000
9,000
Sales
Discount received
Profit loss A/c
Creditors
Reserves
Loan from managing director
Provision for Doubtful Debts
9%Debentures
Share capital
3,25,000
3,150
6,220
35,200
25,000
24,700
5.000
2,00,000
2,50,000
Total
8,74,270
Total
8,74,270
You are required to prepare Profit and Loss Account for the year ended 31.12.2011 and a Balance Sheet as on that date as per schedule III of the companies Act. The following further information is given:
Closing stock was valued at Rs.1,91,500
Depreciation on plant at 15% and on Furniture at 10% should be provided.
A Tax provision of . Rs.8,000 is considered necessary.
The directors declared an interim dividend on 15.08.2011 for 6 months ending 30th June, 2011 6%. And create a provision for Doubtful Debts@7%.
19) The Balance Sheets of O Ltd and P Ltd as on 31st March, 2015 are as under: (Amount in lakhs)
Liabilities
O Ltd Rs.
P Ltd Rs.
Assets
O Ltd Rs.
P Ltd Rs.
Equity Shares 10 each
25
50
Fixed Assets
110
50
Reserves
131
29.25
Investments
16.25
25
12% Debentures
11
5.50
Current Assets
40,25
3.25
Creditors
8
2.75
Miscellaneous Exp.
8.50
9.25
175
87.50
175
87.50
Investments of O Ltd represent Rs.1,25,000 shares of P Ltd . Investments of P Ltd are considered worth Rs.30 lakhs, P Ltd is taken over by O Ltd on the basis of the intrinsic value of shares in their respective books of account. Prepare a statement showing the number of shares to be allotted by O Ltd to P Ltd, Journal entries in both books and the Balance Sheet of O Ltd after absorption.
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20) Following are the Balance Sheets of H Ltd and its subsidiary S Ltd as on 31st March, 2014.
Liabilities
H Ltd
Rs.
S Ltd
Rs.
Assets
H Ltd
Rs.
S Ltd
Rs.
Share Capital (100 each)
General Reserve
P&L A/C
Creditors
10,00,000
3,20,000
2,80,000
1,60,000
4,00,000
1,20,000
1,80,000
1,80,000
Fixed Assets
Stock
Debtors
Investments:
3200 shares in S Ltd at Cost
Cash at Bank
8,00,000
2,00,000
80,000
6,00,000
80,000
5,00,000
1,80,000
1,50,000
50,000
17,60,000
8.80,000
17,60,000
8.80,000
H.Ltd. acquired the shares in S.Ltd on 1st Oct.2013. The Profit and loss account of S.Ltd. on 4 2013 showed a credit balance of Rs.1, 40, 000 out of which a dividend of 20% was paid for the year 2012-2013 in the month of Oct 2013. H.Ltd credited the dividend to its Profit and Loss account. Sundry creditors of S.Ltd includes Rs.30, 000 for goods supplied by H.Ltd. The closing stock of S.Ltd includes goods worth Rs.12, 000 which were supplied by H.Ltd. at a profit of 25% on cost. Prepare Consolidated Balance Sheet.
21) What is Contingent Liability as per AS 29?
Write the areas where AS29 is not applicable.
Write down the disclosures requirement of provisions as per AS-29.
Write the accounting treatment of contingent assets.