: 1 : Time allowed : 3 hours Maximum marks : 100. Total number of questions : 6 Total number of printed pages : 7

Transcription

1 Roll No : 1 : NEW SYLLABUS Time allowed : 3 hours Maximum marks : 100 Total number of questions : 6 Total number of printed pages : 7 NOTE : 1. Answer ALL Questions. 2. All working notes should be shown distinctly. PART A 1. (a) State the provisions relating to calculation of net profit for determining managerial remuneration under section 198 of the Companies Act, (b) How will you deal with internally generated intangible assets in the books of account? (c) Mention the expenses which should not be included in 'preliminary expenses'. Can preliminary expenses be written-off against capital profit? (d) Distinguish between 'pooling of interests method' and 'purchase method' of amalgamation. (e) How is revenue recognised in the statement of profit and loss of an enterprise as per Accounting Standard (AS) 9? Explain in brief. Attempt all parts of either Q.No. 2 or Q.No. 2A 2. (a) State the order of preference in which, the amount received from assets not specifically pledged and amount contributed by the contributories, are distributed by the liquidator. (b) How are pre-acquisition losses of subsidiary companies shared and accounted for? (c) S Ltd. issued 10,000, 12% debentures of 100 each at a discount of 5%. These debentures are redeemable at a premium of 10% after 5 years. You are required to show (i) Journal entry on issue of the debentures; and (ii) The loss on issue of debenture account over the period. (d) What are the advantages of value added statement (VAS)? (e) Explain in brief the Accounting Standard (AS) 18 pertaining to related party transactions. (3 marks each) /1

2 : 2 : OR (Alternate question to Q.No. 2) 2A. (i) Sun Ltd. issued 1,00,000 equity shares. The whole of the issue was underwritten as follows : Marigold 35% Lotus 25% Tulip 30% Lily 10% Applications for 80,000 shares were received in all; out of which applications for 20,000 shares had the stamp of Marigold; 15,000 that of Lotus; 22,000 that of Tulip and 8,000 of Lily. The remaining 15,000 applications did not bear any stamp. Determine the liability of each underwriter. (ii) (iii) What do you mean by profit or loss prior to incorporation? How is the profit or loss prior to incorporation treated in the books of a company? What do you understand by 'corporate restructuring'? Why is corporate structuring carried out? 3. (a) Moon Ltd. has gone into liquidation on 30 th May, The details of members who have ceased to be member within one year ('B' contributories) along with the debts that could not be paid out of realisation of assets and contribution from present members ('A' contributories) are given below. Shares are of 10 each and 7 are paid-up. Shareholders No. of shares Date of transfer Proportionate transferred unpaid debts () A 10, ,000 B 12, ,000 C 15, ,000 D 8, ,05,000 E 5, ,10,000 Determine the amount realisable from each shareholder. (5 marks) Contd...

3 : 3 : (b) (c) Calculate the managerial remuneration from the following particulars of Zen Ltd. The company has only one Managing Director : Net profit 20,00,000 Net profit is calculated after considering the following : Depreciation 4,00,000 Preliminary expenses 1,00,000 Provision for tax 31,00,000 Director's fee 80,000 Bonus 1,50,000 Profit on sale of fixed assets (original cost 2,00,000; WDV 1,10,000) 1,55,000 Provision for doubtful debts 90,000 Scientific research expenditure (for setting-up new laboratory) 2,00,000 Managing Director's remuneration paid 3,00,000 Other information : Depreciation allowable is 3,50,000. Bonus liability as per the Payment of Bonus Act, 1965 is 1,80,000. Looking at the past records of debtors, provision for doubtful debts is not required. Rate of managerial remuneration is 5%. (5 marks) Thin Ltd. was registered with an authorised capital of 10,00,000 equity shares of 10 each and it acquired the running business of Ganesh at an agreed price of 25,00,000. The balance sheet of Ganesh on the date of acquisition was as under : I EQUITY AND LIABILITIES (1) Shareholders' funds (a) Share capital 20,00,000 (b) Reserves and surplus General reserve 2,00,000 (2) Non-current and current liabilities (a) Current liabilities Trade payables 5,00,000 Bills payable 3,00,000 TOTAL 30,00,000 /2

4 : 4 : II ASSETS (1) Non-current assets (a) Fixed Assets Freehold premises 10,00,000 Plant and machinery 8,00,000 (2) Current assets (a) Inventories 2,00,000 (b) Trade receivables 2,75,000 less : provisions 25,000 2,50,000 (c) Bank 7,50,000 TOTAL 30,00,000 The consideration was to be discharged by the issue of 2,00,000 equity shares of 10 each as fully paid-up and the balance in cash. Journalise the transactions in the books of Thin Ltd. Also prepare the opening balance sheet of the company. (5 marks) 4. (a) Following is the balance sheet of Dabbu Ltd. as on 31 st March, 2014 : Note No. I EQUITY AND LIABILITIES (1) Shareholders' funds (a) Share capital (10 each) 75,000 (b) Reserves and surplus 1 27,000 (2) Current liabilities (a) Trade payables 36,250 (b) Workman saving account 11,250 (c) Provision for income-tax 22,500 TOTAL 1,72,000 Contd...

5 : 5 : II Note No. ASSETS (1) Non-current assets (a) Fixed assets 2 97,500 (b) Preliminary expenses 4,500 (2) Current assets (a) Stock 18,000 (b) Trade receivables 33,000 (c) Cash at bank 19,000 TOTAL 1,72,000 Note No. 1 : Reserves and surplus General reserve 15,000 Surplus 12,000 27,000 Note No. 2 : Fixed assets Land and building 42,000 Plant and machinery 48,000 Trade marks 7,500 97,500 The plant is worth 45,000 and land and building 90,000. Out of the total debtors, 3,000 are bad. The profits of the company have been as follows : , , ,750 It is the company's practice to transfer 25% of profits to general reserve. Similar type of companies earn at 10% of the value of their shares. Goodwill is 60,000. Ignore taxation. Ascertain the value of shares of the company using (i) Intrinsic value method; and (ii) Yield value method. (7 marks)

6 : 6 : (b) The balance sheets of H Ltd. and its subsidiary S Ltd. as on 31 st March, 2014 are given below : H Ltd. S Ltd. () () () () I EQUITY AND LIABILITIES (1) Shareholders' funds (a) Share capital (authorised, issued, subscribed and paid-up capital) Equity shares of 10 each fully called and paid-up 15,00,000 3,00,000 (b) Reserves and surplus General reserve 6,00,000 2,25,000 Surplus 3,00,000 9,00,000 75,000 3,00,000 (2) Current Liabilities Trade payables 4,50,000 1,50,000 TOTAL 28,50,000 7,50,000 II ASSETS (1) Non-current assets (a) Fixed assets (i) Machinery 9,00,000 2,70,000 (ii) Furniture 1,50,000 51,000 (iii) Other assets 13,20,000 23,70,000 4,29,000 7,50,000 (b) Long-term investment 2,400 shares at 200 each in S Ltd. (at cost) 4,80,000 TOTAL 28,50,000 7,50,000 Other relevant information : (i) Balance in general reserve and statement of profit and loss (Cr.) of S Ltd. stood at 75,000 and 45,000 respectively on the date of acquisition of its 80% shares by H Ltd. Contd...

7 : 7 : (ii) Machinery (book value 3,00,000) and furniture (book value 60,000) of S Ltd. were revalued at 4,50,000 and 45,000 respectively for the purpose of fixing the price of its shares. Book value of other assets remaining unchanged. These values are to be considered for consolidation purpose. From the above balance sheets and additional information, prepare a consolidated balance sheet as at that date. (8 marks) PART B 5. (a) What are the qualifications and disqualifications prescribed under the Companies Act, 2013 for appointment of auditors? (b) Discuss the provisions relating to rotation of auditors under the Companies Act, (c) What are the services which cannot be rendered by a statutory auditor of a company under section 144 of the Companies Act, 2013? Attempt all parts of either Q.No. 6 or Q.No. 6A 6. (a) Audit working papers are of great need to auditors in discharge of their duties. In what way is it helpful to them? Discuss. (b) What is 'internal check'? Distinguish between 'internal check' and 'internal audit'. (c) What are the objectives of review of management information system? OR (Alternate question to Q.No. 6) 6A. (i) What points should be considered by the auditor while verifying the fixed assets of a company? (ii) Discuss the procedure of issuing auditing standards. (iii) Explain the role of CAG in the functioning of financial committees of the Parliament. 0