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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.Com.DEGREE EXAMINATION -COMMERCE
FIFTH SEMESTER APRIL 2018
C 551- ADVANCED FINANCIAL ACCOUNTS
Date: 02-05-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
Section: A
Answer All Questions: 10 x 2 20
What is Rebate on Bills Discounted?
What is Reinsurance?
Write a short note on Reversionary Bonus/
What is meant by Double Account System?
Define Holding Company.
What is purchase Consideration according to AS14?
From the following data, compute the amount to be charged to Revenue Account:
Present cost of replacing the old works Rs.1,80,000
Amount realised on the sale of old materials Rs.10,000
Value of old Materials use in the reconstruction Rs.250
Shares of A Ltd are to be considered as worth Rs.12 each of which shareholders are to be paid one quarter in cash and the balance in Rs.100 shares of B Ltd which are to be issued at 25% premium. Total shares were 10,000 in B Ltd and 20,000 in A Ltd. Ascertain the number of shares to be issued by B Ltd.
What do you understand by Dissolution of firm?
10) Write a short note on Cost of Control.
Section B
Answer any five only: 5 x 8 40
11) Explain the following terms in detail: Amalgamation, Absorption and
External Reconstruction.
12) Write a note on Capital Base, Clear Profit, Development Reserve.
13) Describe the advances usually made by banks and shown under schedule 9.
14) On 31st March, 1998 a bank held the following bills discounted by it earlier:
Date of Bills 1998
Term of Bills
Months)
Discounted p.a
Amount of Bill
Rs.
January, 17
4
17
7,30,000
February, 7
3
18
14,60,000
March, 9
3
17.5
3,64,000
You are required to calculate the rebate on bills discounted also show the necessary journal entry for the rebate.
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15) The Revenue account of Life Insurance Company showed the life fund at Rs.73,17,000 on 31.03.2006 before taking into account the following items:
Claims intimated but not admitted Rs.98,250
Bonus utilized in reduction of premium Rs.13,500
Interest accrued on investment 29,750
Outstanding premiums Rs.27,000
Claims covered under reinsurance Rs.40,500
Provision for taxation Rs.31,500
Pass journal entries giving to the effect to the above adjustments and show the adjusted life fund.
16) The Balance Sheets of H Ltd., and S Ltd., as on 31/12/2015 were given below:
Liabilities
H Ltd.
Rs.
S Ltd.
Rs.
Assets
H Ltd.
Rs.
S Ltd.
Rs.
Share Capital
Reserves
Profits
2,00,000
40,000
25,000
40,000
10,000
14,000
30,000 shares in S Ltd.
Assets
60,000
2,05,000
64,000
2,65,000
64,000
2,65,000
64,000
S Ltd had the credit balance of Rs.10,000 in the reserves when H Ltd. acquired shares in S Ltd. S Ltd capitalized its Rs.10,000 (all out of profits earned after the acquisition of its shares by H Ltd) by making a bonus issue of one share for every four shares held. You are required to calculate cost of goodwill before and after the declaration of bonus issue. Also prepare the consolidated balance sheet after the declaration of bonus issue.
17) A Life insurance Company gets its valuation made once in every two years. Its Life Assurance Fund on 31.03.06 amounted to Rs.63,84,000 before providing Rs.64,000 for the shareholders' dividend for the year 2005-06. Its actuarial valuation due on 31.03.06 disclosed a net liability of Rs.60,80,000 under assurance annuity contacts. An interim bonus of Rs.80,000 was paid to the policy holders during the two years ending 31.03.2006. Prepare a statement showing the amount now available as bonus to policy holders.
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18) Distinguish between dissolution of partnership and dissolution of firm. Explain the accounting procedure for distribution of amount realized to partners at the event of dissolution of firm.
Section C
Answer any two only: 2 x 20 40
19) Balance Sheet of K Ltd is given below as on 3st March, 2011
Liabilities
Rs
Assets
Rs.
10,000 Equity shares of Rs.100 each
10,00,000
Fixed Assets
8,00,000
Capital Reserve
2,00,000
Current Assets
4,00,000
Bank Loan
2,00,000
Cash
2,00,000
Creditors
3,00,000
Profit and Loss A/c
3,00,000
17,00,000
17,00,000
M Lt was incorporated to take the fixed assets and 60% of the current assets at an agreed value of Rs.9,00,000 to be paid as to Rs.7,40,000 in equity shares of RS.10 each and the balance in n9% debentures/ The debentures were accepted by bank in settlement of loan. Remaining current assets realized Rs.90,000.After meeting Rs.20,000 expenses of liquidation all the remaining cash was paid to the creditors in full settlement. Give Journal entries in the books of both companies to account the amalgamation
20) The following is the trial Balance of BCD Bank Ltd as on 31/12/15
Particulars
Debit Rs.
Credit Rs.
Share Capital 7500 shares of Rs.100 each
7,50,000
Loans and advances
80,20,000
Bank premises
5,32,500
Govt. Securities
15,30,000
General Reserve
4,50,000
Deposits
96,46,000
Interest and discounts
8,00,000
Interest on deposits and borrowings
2,00,000
Balance with other banks
1,00,500
Money at call and short notice
85,500
General expenses
82,500
Rent, rates and taxes
6,900
Directors' fees
4,200
Auditors' fees
1,200
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Bills discounted
90,000
Furniture (Depreciation up to (01.01.15 20,000)
80,000
Borrowings from other banks
1,05,000
Salaries and allowances
85,500
Computer
35,000
Profit &Loss A/c 01.01.15
37,500
Miscellaneous income
300
Commission
10,000
Interim dividend
30,000
Cash in hand with RBI
9,15,000
1,17,98,800
1,17,98,800
Consider the following information furnished to prepare Profit and Loss Account for the year ending 31.12.15 and balance sheet as on that date.
Bills worth Rs.50,000 were received for collection.
Interest accrued on investment Rs.12,000
Rebate on bills discounted Rs.15,000
Debts amounting to Rs.65,000 were doubtful and provision to be made for the same.
Depreciation to be charged at 10% on the original cost of the furniture.
21) X Ltd purchased 750 shares in Y Ltd on 01.07.2004. The following were their Balance Sheets on 31.12.2004.
Liabilities X Ltd Y Ltd Assets X Ltd Y Ltd
Share Capital 3,00,000 1,00,000 Buildings 2,05,000 1,25,0000
(Rs.100 each) Stock 1,00,000 80,000
Reserves 1,00,000 70,000 Debtors 1,00,000 40,000
Profit Loss A/C 1,00,000 60,000 Investment in 1,00,000
Creditors 80,000 40,000 Y Ltd.
Bills Payable 50,000 20,000 Bills Receivable 40,000 45,000
Current A/C X Ltd 20,000 Bank 60,000 20,000
Current Ltd 25,000
6,30,000 3,10,000 6,30,000 3,10,000
Additional Information:
Bills receivable of X ltd include Rs.10,000 accepted by Y Ltd.
Debtors of X Ltd include Rs.20,000 payable by Y Ltd.
A cheque of Rs.5,000 sent by Y Ltd on 28th December was not yet received by
X Ltd on 31st December 2004.
Profit and loss a/c of Y Ltd showed a balance of Rs.20,000 on 1st Jan, 2004.
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You are required to prepare a consolidated Balance Sheet of X Ltd and Y Ltd.