LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SUPPLEMENTARY EXAMINATION – JUNE 2009
CO 6606 - ADV. CORPORATE ACCOUNTS
Date & Time: 25/06/2009 / 10:00 - 1:00
Dept. No.
Max. : 100 Marks
Answer all questions
Explain the following:
1.
Amalgamation adjustment account
2.
Reserve for Unexpired Risk
3.
Statutory Reserve
4.
Commission on re-insurance accepted and ceded.
5.
Bonus in reduction of premium
6.
Minority interest
7.
Reasonable return
8.
Contingent liability
9.
Non-banking assets
10.
Bills discounted and purchased
PART B
Answer any FIVE questions
Marks:10 x 2 = 20
Marks:5 x 8 = 40
11. What are the conditions to be satisfied for amalgamation to be treated in the nature of merger?
12. Distinguish between ‘Double account system’ and ‘Single account system’.
13. From the following particulars prepare Profit and Loss Account of New Bank Ltd., for the year ended
31/12/2008:
Rs.
Rs.
Interest on Loans
4,20,000
Interest on Cash Credits
3,25,000
Interest on Fixed deposits
3,00,000
Rent & Taxes
40,000
Interest on Overdraft
60,000
Commission & exchange
10,000
Director’s fees
5,000
Establishment expenses
56,000
Interest on Savings Bank a/c 70,000
Discount on Bills discounted 2,00,000
Office expenses
6,300
Loss on sale of assets
5,000
Profit and Loss A/c (1/1/2008) 30,000 (cr)
Provide for the following:
a)
Rebate on Bills discounted Rs.40,000.
b)
Income tax Rs.25,000
c)
Doubtful debts Rs.10,000
d)
Proposed Dividend Rs.25,000
st
14. On 31 March 2008, Bharat Bank Ltd finds its advances classified as follows:
Rs.
Standard assets
14,00,000
Sub standard assets
92,000
Doubtful assets secured:
Less than 1 year
25,000
1 year to 3 years
15,000
More than 3 years
6,000
Doubtful assets unsecured
8,000
Loss assets
10,000
Calculate the amount of provision to be made by the bank against the above mentioned advances.
15. From the following particulars relating to ABC Insurance Co. prepare Fire Revenue Account for the year
ending 31/12/2005.
Rs.
Rs.
Claims paid
4,80,000
Premiums received
12,00,000
Claims outstanding(1/1/2005)
40,000
Reinsurance premium paid
1,20,000
Claims outstanding(31/12/2005)
60,000
Commission
2,00,000
Claims intimated but not )
Commission on reinsurance
accepted(31/12/2005)
10,000
ceded
10,000
Commission on reinsurance
Provision for unexpired risk
accepted
5,000
(1/1/2005)
4,00,000
Expenses of management
3,05,000
Additional provision for
1
Bonus in reduction of premium
12,000
unexpired risk (1/1/2005)
20,000
You are required to provide for additional reserve for unexpired risk at 1% of the net premium in addition
to the opening balance.
16. From the following Balance Sheets relating
consolidated Balance sheet:
H Ltd
S Ltd
Rs.
Rs.
Share capital (Rs.10)
10,00,000 2,00,000
Profit & Loss A/c
4,00,000 1,20,000
Reserves
1,00,000
60,000
Creditors
2,00,000 1,20,000
17,00,000 5,00,000
to H Ltd and S Ltd, as on 31/12/2005, prepare the
H Ltd.
S. Ltd.
Rs.
Rs.
Fixed Assets
8,00,000
Stock
6,10,000 1,20,000
Debtors
1,40,000
15000 shares in S 1,50,000 2,40,000
Ltd.
17,00,000
1,40,000
5,00,000
a) H Ltd acquired the shares on 1/1/2005 on which date the General Reserve and Profit and Loss A/c
of H Ltd. stood in its book as Rs.40,000 and Rs.50,000 respectively.
b) Stock of H Ltd includes Rs.50,000 purchased from S Ltd., which company had made a profit of
25%on cost.
c) Creditors of H Ltd include Rs.20,000 payable to S Ltd
17. An electricity company replaced its mains in the year 2009 at a cost of Rs.15 lakhs. The original mains
had cost Rs.5 lakhs in 1972, comprising of material and labor in the ratio of 3:2. Since its construction,
material prices have doubled and labor rates increased by 50%. Old materials worth Rs.20,000 were
sold, and those costing Rs.40,000 were used in the new construction and included in the cost given
above.
Show the apportionment of cost into capital and revenue and pass necessary journal entries.
18.
A Life Insurance Company got its valuation made once in every two years. The Life Assurance Fund in
31/3/2009 amounted to Rs.41,92,000 before providing Rs.50,000 for Income tax and Rs.32,000 for
Shareholders’ dividends. Its actuarial valuation on 31/3/2009 disclosed a net liability of Rs.40,40,000
under its assurance and annuity contracts. An interim bonus of Rs.40,000 was paid to the policy holders
during the period ending 31/3/09.
Prepare a statement showing the amount now available as bonus to Policy holders
PART C
Answer any TWO questions.
Marks:2 x 20 = 40
19. Balance Sheet of Y Ltd. on 31/12/2005
Rs.
Equity share capital (Rs.10 3,00,000
each)
Profit & Loss A/c
80,000
Creditors
40,000
8% debentures Rs.100 each
60,000
Export profit reserve
20,000
(statutory)
5,00,000
Goodwill
Land & Building
Machinery
Stock
Debtors
Cash
Rs.
60,000
1,20,000
2,00,000
80,000
30,000
10,000
5,00,000
X Ltd acquired Y Ltd on the following terms:
a) a cash payment of Rs.4 for every share in Y Ltd.
b) issue of one share of Rs.10 each at a market price of Rs.12 in X Ltd. for every share in Y Ltd.
c) expenses of realization amounted to Rs.4,000 which was paid by X Ltd.
d) 8% debentures are to be discharged at a premium of 5% by cash payment
Show Realisation Account, X Ltd. account, Shareholder’s account and the Share Capital account in the
books of Y Ltd. Also pass Journal entries for the acquisition in the books of X Ltd.
20. An electricity company earned a profit of Rs.8,45,000 during the year ended 31st March 2009,after
providing for debenture interest at 7 ½ percent on Rs.2,50,000. From the details given below show the
disposal of profit:
Original cost of Fixed Assets
Rs.1,00,00,000
Preliminary expenses
Rs. 5,00,000
2
Monthly average of current assets
4% Reserve Fund investment
6% Contingency Reserve investments
Loan from Electricity Board
Total depreciation written off Fixed Assets
Fixed assets acquired through consumer contribution
Tariff and Dividend control reserve
Security deposits received from customers
Assume bank rate to be 6%
21. The trial balance of XYZ Bank Ltd. on 31/03/09
Rs.
Balance with banks
46,000
Govt. bonds
1,94,720
Gold
1,70,000
Interest accrued
26,000
Building
65,000
Furniture
5,000
Money at call
26,760
Loans
1,60,000
Cash credits
20,000
Bills discounted
32,500
Interest on deposits
33,950
Salaries
22,450
Loss on sale of investment
10,000
Administration expenses
12,620
Cash in hand and with RBI
75,000
Branch adjustment account
20,000
----------9,20,000
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
25,00,000
10,00,000
2,50,000
15,00,000
18,00,000
2,00,000
50,000
2,00,000
Rs.
Share capital
3,00,000
Savings deposits
90,000
Current deposits
29,420
fixed deposits
1,13,000
Statutory reserve
1,40,050
Short loans
40,000
P&L (1/04/08)
13,730
Interest received
1,22,000
Commission
25,300
Discounts
42,000
Transfer fees
600
Profit on sale of investment
3,900
---------9,20,000
You are required to prepare the Profit and Loss a/c and Balance Sheet as on 31/3/08, after taking into
consideration the following:
1.
Provide Rs.10,000 for doubtful debts and Rs.25,000 for Income Tax
2.
Provide Rs.3,000 rebate on bills discounted
3.
The bank held Rs.20,000 bills for collection.
4.
Acceptances on behalf of customers amounted to Rs.30,000
5.
Provide 10% depreciation on building
6.
Directors recommend 10% dividend.
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