Free of Cost ISBN : CMA (CWA) Inter Gr.I (Solution upto Dec & Question of June included)

Transcription

1 Free of Cost ISBN : Solved Scanner Appendix CMA (CWA) Inter Gr.I (Solution upto Dec & Question of June included) Paper - 5 : Financial Accounting Chapter - 1 : Accounting Concepts and Conventions Dec [6] (b) In the books of Lotus Stores calculation of correct Total of Trial Balance Particulars Dr. Cr. Total of Trial Balance as per on 3,65,000 2,26,000 Add: under statement of op. stock 5,000 Less: over statement of Rent & Rates 27,000 Add: under statement of sundry creditors 63,000 Less: over statement of sundry debtors 54,000 Correct Total 2,89,000 2,89, Dec [8] (c) In order to enable the management to draw important conclusions regarding the working of a company over a number it is essential that accounting practices and methods remain unchanged from one accounting period to another. According to AS-1 consistency is a fundamental assumption and it is assumed that accounting policies are consistent from one period to another. Where this assumption is not followed, the fact should be disclosed with proper reasons. Kohler has talked about three types of consistencies : (i) Vertical consistency: consistency maintained within the interrelated financial statements of the same date. (ii) Horizontal consistency: this enables the comparison of performance of the organization in one year with its performance of previous/ next year. (iii) Third dimensional consistency: Performance of one organization can be compared with that of another organization in the same industry. 1

2 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 2 Chapter - 2 : Depreciation Accounting Dec [2] (b) As per AS 6 "Depreciation Accounting, following are the criterias which should be fulfilled by a depreciable asset- (a) They are expected to be used during more than one accounting period, (b) They have a limited useful life, (c) They are held by an enterprises for use in the production or supply of goods & services, for rental to others, or for administrative purposes and not for the purpose of sale in the ordinary course of business. Chapter- 3 : Accounting for Inventory Dec [2] (c) Valuation of Good unit = Total Input = = W.N. (1) Total Input Cost Purchase cost 10,000 units 135 p.u. = 13,50,000 Less: Cenvat Credit 10,000 units 8 p.u.= 80,000 12,70,000 Add: Freight incurred 88,500 13,58,500 Valuation of closing stock (a) Closing stock quantity = 10, ,500 = 900 units (b) Valuation per unit = 143/- (c) Value of closing stock (a) (b) = 1,28,700/- Chapter- 4 : Capital and Revenue Expenditure Dec [4] (c) As per AS 10 Accounting for Fixed Assets if due to any expenditure, the future benefits from the assets increases beyond its previously assessed standard of performance, then it should be capitalized. The size of the expenditure is not important for capitalizing the expenditure. In the present case, renovation expenses should be capitalized because it has enhanced the revenue generating capacity of the hall but expenditure for making more emergency exit does not enhance the revenue generating capacity of the hall, so it should be charged to revenue.

3 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 3 Chapter - 5 : Royalty Accounts Dec [3] (c) In the books of Cochin coals Ltd Royalty Payable a/c Date Particulars Amount To Landlord a/c (Minimum rent) To Landlord a/c (19,000 tone 100/-) To Landlord a/c (22,000 tone 100/-) 15,00, Date Particulars Amount By Royalty receivable a/c (4,000 tone 120/-) By P & L a/c 4,80,000 10,20,000 15,00,000 15,00,000 19,00, By Royalty receivable a/c (7, /-) By P and L a/c 8,40,000 10,60,000 19,00,000 19,00,000 22,00, By Royalty receivable a/c (8,000 tone 120/-) By P & L a/c 9,60,000 12,40,000 22,00,000 22,00, Dec [8] (b) Short working and recoupment of short working: Short working is the amount by which the minimum rent exceeds the actual royalty. It is the difference between actual rent and minimum rent. Generally the royalty agreement contains a provision for carrying forward of short workings with a view to adjust it in the future. In the subsequent years, such short working is adjusted against the surplus royalty. This process of adjustment is called recoupment of short Workings. The right of recoupment of short workings enables the lessee to recover the excess payment, made in the earlier years to meet the condition of payment of minimum rent. A time is usually agreed upon the number of years for which such short workings can be recouped. This time limit for recoupment of short workings may be fixed or fluctuating. If the short workings cannot be recouped within the specified time, they lapse and are charged to Profit and Loss Account in the year when that specified time limit for recoupment ends.

4 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 4 Chapter - 6 : Hire Purchase and Instalment Payment Dec [3] (b) H.P. Trading A/c of Chinu and Co. for the year ending on Date Particulars Amount To Balance b/d Opening Instt. not due at cost Date Particulars Amount 60, By Cash A/c 2,65,000 Opening Instt. due but not received NIL By Balance C/d Closing Instt. not due at cost 2,27, To Cost of goods sold on H.P. 3,55,000 Closing Instt. due but not received 35, Profit & Loss a/c (B/F) 1,12,500 5,27,500 5,27,500 W.N.1 Mem. H.P. Debtors A/c Particulars Amount Particulars Amount To Balance b/d NIL By Cash a/c 2,65,000 To H.P. Stock W.N. (2) 3,00,000 By Balance c/d 35,000 (b/f) 3,00,000 3,00,000 W.N. 2 Mem. H.P. Stock a/c Particulars Amount Particulars Amount To Balance b/d 96,000 By H.P. Debtors a/c (b/f) 3,00,000 To Goods Sold on H.P. 5,68,000 By Balance c/d 3,64,000 6,64,000 6,64,000

5 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 5 Chapter - 7 : Accounting for Non Profit Making Organization Dec [3] (a) Receipt & Payment A/c of Nav Bharat Club for the year ended on Receipts Amount () To Balance b/d (B/F) To Subscriptions 56,640 Closing o/s 2,600 + Closing advance Opening o/s 3,100 Opening advance 1,100 To Sale of old newspaper To Lectures To Entrance Fees 2,900 + Capitalized 2,900 To Misc. Incomes To Instalments on sports prize fund 5,840 56, ,000 5,800 1,200 4,500 Payments Amount () By Unkeep of ground 21,000 + opening o/s 1,500 By Printing & 2,800 Stationery + Opening o/s 510 By Salaries 28,000 + Opening o/s 3600 Closing o/s 4,200 By Repairs By Sports prizes By Balance c/d 22,500 3,310 27,400 3,500 6,500 19,400 82,610 82,610 Chapter - 8B : Admission of Partner Dec [4] (a), (b) (a) W.N. (1) Calculation of sacrifying ratio Particulars Ashok Old ratio New ratio = = Bala = = Sacrifying ratio is 21:15 or 7:5

6 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 6 W.N.(2) Calculation of Partners closing capital Particulars Ashok Bala Chand Capital as per Trial Balance 3,36,000 2,40,000 2,24,000 Goodwill adjustment (7:5) 56,000 40,000 (96,000) W.N. (1) 3,92,000 2,80,000 1,28,000 Interest on 5% 19,600 14,000 6,400 Share of Profit Profit 2,20,000 Less: Instt. on capital 40,000 4,11,600 2,94,000 1,34,400 1,80,000 (7:5:3) 84,000 60,000 36,000 4,95,600 3,54,000 1,70,,400 Less: Drawings as given in T/B 1,45,600 1,04,000 20,400 Solution: 3,50,000 2,50,000 1,50,000 Balance Sheet of Reconstituted firm as on Liabilities Amount Assets Amount Capital A/c Other Assets 7,70,000 Ashok 3,50,000 Cash in hand 28,000 Bala 2,50,000 Chand 1,50,000 Sundry creditors 48,000 (b) 7,98,000 7,98,000 Calculation of Goodwill (i) Super Profit Method Goodwill = Super Profit No. of years of purchase = 95,000/- 2 = 1,90,000/- Super Profit = Average Profit Normal Profit = 1,70,000 (5,00,000 15%) =95,000

7 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 7 Average Profit = = 1,70,000 (ii) Capitalization Method Goodwill = Value of Business Avg. Capital Employed = 5,00,000 = 11,33,333 5,00,000 = 6,33,333/- Chapter - 9 : Branch Accounts Dec [2] (a) In the books of Priya Sales Corporation, Jaipur Branch Stock A/c Particulars Amount Particulars Amount To Balance b/d 2,40,000 By Goods sent to branch A/c 20,000 To Goods sent to branch A/c 18,00,000 By Cash A/c 5,80,000 To Branch Debtors A/c 25,000 By Branch Debtors A/c 11,40,000 To Branch Adjustment A/c (b/f) 35,000 21,00,000 Branch Debtors A/c By Balance C/d 3,60,000 21,00,000 Particulars Amount Particulars Amount To Balance b/d 2,15,000 By Cash A/c 10,45,000 To Branch stock 11,40,000 By Branch Expenses Discount allowed 14,800 By Bad debts 9,200 By Branch Stock 25,000 By Balance C/d 2,61,000 13,55,000 13,55,000 Branch Adjustment A/c Particulars Amount Particulars Amount To Goods Send to Branch 5,000 By Stock Reserve A/c 60,000

8 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 8 To Branch P and L A/c 4,50,000 (B/f) By Goods sent to branch 4,50,000 To Stock Reserve 90,000 By Branch Stock A/c 35,000 5,45,000 5,45,000 Branch Expenses A/c Particulars Amount Particulars Amount To Branch Debtors A/c By Branch P and L A/c 2,61,000 Discount allowed 14,800 Bad debts 9,200 To Cash A/c Salary and wages 1,80,000 Rent, Rates and Taxes 42,000 Sundry expenses 15,000 2,61,000 2,61,000 Branch P and L A/c Particulars Amount Particulars Amount To Branch Expenses A/c 2,61,000 By Branch Adjustment A/c [Gross Profit] To P and L A/c [Net Profit] 1,89,000 4,50,000 4,50,000 4,50,000 Goods Sent to Branch A/c Particulars Amount Particulars Amount To Branch Stock A/c 20,000 By Branch Stock A/c 18,00,000 To Branch Adj. A/c 4,50,000 By Branch Adj A/c 5,000 To Trading A/c (B/F) 13,35,000 18,05,000 18,05,000

9 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 9 Note: Branch Stock A/c shows a difference of 35,000 in the Debit side. It is assumed that actual sales are made above Invoice Price Dec [8] (e) Branches are classified as two way, (i) Inland Branch, (ii) Foreign Branch (i) Inland Branches: (a) Dependent Branches: Branches in respect of which the whole of the accounting records are kept at head office. (b) Independent Branches: As the name indicates such branches maintain independent accounting records. (ii) Foreign Branches: Branches which are located in a foreign country other then in which the company is incorporated they maintain independent and complete record of business. Methods of accounting are: (i) Final Accounts method (a) At wholesale price (b) At Cost Price/At Invoice Price (ii) Debtors method; (iii) Stock and Debtors method; and (iv) Cash Basis System. Chapter - 12 : Issue and Forfeiture of Share Dec [6] (a) Journal Entries in the books of wonder world Ltd April 1 Bank A/c Dr. To Investments A/c To P and L A/c (Being Investments Sold) April 1 Bank A/c Dr. To Preference share application A/c (Being application 60/- each received on 1,500 Preference Shares)

10 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 10 April 1 Preference Share application A/c Dr. To 12% PSC A/c (Being allotment made) April 1 Preference share allotment A/c Dr. To 12% PSC A/c (Being allotment money due on 1,500 pref 40/- each) April 1 Bank A/c Dr. To preference Share allotment A/c April 1 ESC A/c Dr. Security Premium A/c Dr. To equity shareholders A/c (Being 20%Eq. Shares bought back at a premium of 10/- each as per board resolution dated...) April 1 Equity share holders A/c Dr. To Bank A/c (Being amount paid to equity shareholders against buy back) April 1 General Reserve A/c Dr. To Capital Redemption Reserve A/c (Being amount transferred from General Reserve to CRR A/c) [Refer W.N.1] April 1 Capital Redemption Reserve A/c Dr. Security Premium A/c Dr. To Bonus to Shareholders A/c (Being profits transferred to issue bonus shares in the ratio of 1:5 [Refer W.N.2] April 1 Bonus to Shareholders A/c Dr. To ESC A/c (Being Bonus Shares issued in the ratio of 1:5 as per board resolution dated...)

11 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 11 W.N. (1) W.N. (2) No. of Bonus Shares to be issued = 80,000 = 16,000 Shares Balance Sheet of wonder Ltd. as on I. Equity & Liabilities Note Lacs II. 1. Shareholders Find (a) Share Capital (b) Reserve & Surplus 2. Non Current Liabilities 3. Current Liabilities (a) Short Term Borrowings (b) Trade Payables (c) Other current liabilities Assets 1. Non current Assets (a) Fixed Assets (b) Non current Investments (c) Long term loans & advances 2. Current Assets (a) Inventories (b) Trade Receivables (c) Cash & Cash Equivalents B1 B2 B NIL NIL Total B NIL NIL Total 28.20

12 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 12 Chapter - 15 : Company Final Account Dec [7] (b) Calculation of amount to be drawn from reserves for dividend: (i) First condition: Rate of dividend must be 10% or average rate of dividend for last 5 years, i.e. 16%, whichever is less. So, 10% is declared. Requirement of transfer from reserves for 10% dividend ( In lakhs) 10% of 5,000 lakhs 500 Less : Profit available 280 Less: Preference Dividend Balance to be drawn from Reserve 319 (ii) Second Condition: Maximum amount that can be drawn should not exceed 10% of paid up capital plus free reserves = (1, , ,605) = 7,705 lakhs. So, 10% of 7,705 lakhs = lakhs (iii) Third Condition: After drawing from reserves, the residual amount of reserve should not fall below 15% of paid up capital: Let Dividend d, Free Reserves r and paid up capital c As per this condition, r d = 15% of c or, d = r 15% of c or, d = 1,605 15% of 6,100 = 1, = 690. As per third condition, maximum amount of dividend is 690 lakhs. Since 319 lakhs is less than the amount available as per condition 2 and 3. Hence, the 10% dividend can be paid Dec [8] (a), (d) (a) Sec.205 deals with sources for payment of dividend and other conditions. The sources for payment of dividend are: (i) Out of current years profit (ii) Out of previous year (iii) Out of the aggregate of profit mentioned in (i) and (ii) above, in all the above cases proper provision for depreciation has to be made (iv) Out of state subsidies Apart from above sources, dividends can be paid out of profits made on sale of assets subject to the fulfillment of certain conditions. (d) Contingent liability can be termed as an obligation relating to an existing condition or situation which may arise in future depending on the occurance or nonoccurrence of one or more uncertain future events- For example, a company may have certain pending litigation, assessments made by tax authorities which are

13 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 13 being contested etc, Which might result in company incurring financial liability in future and in all such cases, the amounts involved are shown as contingent liability. Contingent liabilities are classified under the following head:- (i) Claims against the company not acknowledged as debts (ii) Uncalled liability on shares partly paid (iii) Areas of fixed cumulative dividend (iv) Estimated amount of contracts remaining unexecuted on capital account not provided for, and (v) Other money for which the company is liable contingently. Chapter - 16 : Accounting of Construction Company Dec [5] (a) In the books of Khelaram Contract A/c for the year ended on Particulars Amount Particulars Amount To Material 2,00,000 By Balance c/d To Labour 90,000 Material at site 8,000 To Depreciation on Plant 12,000 Closing WIP (60,000 20%) Work certified 6,00,000 To Misc. Expenses 30,000 Work uncertified 20,000 To Notional Profit 2,96,000 6,28,000 6,28,000 To P and L A/c W.N. (3) 2,62,595 By National Profit 2,96,000 To Work in Progress A/c 33,405 W.N. (1) Calculation of % of completion 2,96,000 2,96,000 = 100 = 100 = 75% W.N. (2) Since all the estimates for is given in the question, we will calculate estimated profit to know the amount of profit to be transferred to P and L A/c. Estimated Profit = contract Price 8,00,000 Less: Expenses incurred till date 3,24,000 Less: Expenses to be incurred 1,13,800 3,62,200

14 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 14 Calculation of Expenses incurred & to be incurred Particulars Material consumed 1,92,000 (2,00,000 8,000) 78,000 (8, ,000) Labour 90,000 25,000 Depreciation on Plant 12,000 4,800 Misc. Expenses 30,000 6,000 3,24,000 1,13,800 W.N.(3) Amount of Profit to be transferred to P and L A/c = Estimated Profit = 3,62,200 = 2,62,595/- Chapter - 20 : Insurance Companies Dec [5] (b) Statement Showing Closing Life Assurance Fund as on Life Assurance fund before adjustment 75,00,000 Add: Claims covered under reinsurance 3,15,000 Less: Income tax 35,000 Add: Bonus in reduction of Premium 4,25,000 Less: Bonus in reduction of Premium 4,25,000 Add: Dividend from Investment 3,20,000 Less: Claims intimated but not paid 8,15,000 Add: O/s Premium 25,000 Life Assurance Fund 73,10,000 Chapter - 21 : Interpretation of Financial Statement Dec [7] (a) Working Note (a) = 2.5 times Net worth = Net worth = 14,40,000

15 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 15 (b) = 80% =.80 Total Debt = 11,52,000/- (c) = 25% CL = 3,60,000 (d) Current Ratio = = 0.25% = C.A. = 10,80,000/- (e) Inventory Turnover ratio = 6 times = Closing Stock = 6,00,000/- (f) Average collection period = = 360 Debtors = 4,00,000/- (g) = = F.A. = 15,12,000/- (h) = Share Capital + R & S = Net worth Share Capital = 14,40,000 R & S =

16 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper ,52, R & S = R & S R & S = = 6,40,000/- Share capital = 8,00,000/- Balance Sheet of... Liabilities Amount Assets Amount Share Capital 8,00,000 Fixed Assets 15,12,000 R & S Long term loans (11,52,000 3,60,000) 6,40,000 Current Assets 7,92,000 Inventory 6,00,000 Current Liabilities 3,60,000 Debtors 4,00,000 Cash & Bank 80,000 25,92,000 25,92,000 Chapter - 22 : Objective Questions Dec [1] {C} (a), (b), (c), (d) (a) (i) (B) Under Subscription: If applications received are for less shares than issued, known as under Subscription resulting into under writers liability. (ii) (C) Dissolution of the firm: At the time of Admission/ Retirement of a partner, revaluation account is opened but at the time of dissolution of a firm, realisation a/c is opened. (iii) (A) Outstanding cash price: In the hire purchase system H.P. price= Cash Price + Interest In this system, interest will be calculated every time on outstanding principle amount ie cash price. Therefore option (B) is not correct. Option (C) is also not correct because instalment amount includes both Principle And Interest. (iv) (A) Sales of each department: Bad debt is treated as selling and distribution expenses, therefore it will be apportioned on the basis of sales of each department. It is related to value only therefore option (B) and (C) is not correct. (v) (B) Purchases return A/c: At the time of purchase return, following journal entry is passed- creditors A/c Dr. To purchase return A/c Therefore option (B) is Correct. Options (A) and (C) are incorrect since these accounts will be debited not credited.

17 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 17 (vi) (C) Insurance company: Calcucation of liability related to human life is vary complex, therefore Insurance company normally takes the services of Actuary ( who are the technical experts) in case of valuation of liability (vii) (A) Available for use: As per As 26 Intangible Assets amortisation of softwares should start when the asset is available for use and not put to use. (viii) (B) An asset that ceases to generate income: Non performing asset is an advance if recovery of interest or instalment of principal is doubtful or if the account is out of order. In case the advance becomes NPA, the bank ceases to charge interest until it is received. Therefore option (B) is correct. (ix) (B) Debit prior period expenditure: Example Rent paid in April ,00,000 includes 60,000 for the month of March The Journal entry will be:- Rent A/c Dr. 40,000 Prior period expenses A/c Dr. 60,000 (Rent) To cash/ Bank A/c 1,00,000 Therefore option (B) is correct (x) (C) Receipt and Payment A/c: In case of receipt of donation, the following entry will be passed Cash/Bank A/c Dr. To capital fund A/c Therefore option (C) is correct (b) (i) True: Surrender of shares means voluntary return of the shares by the shareholder to the company. In such case the company may escape to comply the formalities of forfeiture of shares. Therefore the above statement is true. (ii) False: Reserve for unexpired risk is created in case of General Insurance business. (iii) False: Rebate on bills discounted is the unearned income of the bank, therefore it will be shown in the Schedule 5 other liabilities. They are not assets for the bank. (iv) True: Double Account System is a system of processing the final accounts of certain statutory companies formed by special acts of the parliament like electricity company. In this system, in place of P and L A/c a revenue A/c is prepared and in place of P and L Appropriation A/c, a net revenue A/c is prepared. In place of traditional B/s, following statements are being prepared: (a) Statement of share & loan capital, (b) Statement of Capital Expenditure (c) General Balance Sheet

18 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 18 (v) True: Current assets = Liquid assets + stock in trade Liquid assets = Cash in hand + Bank balance + Debtors + B/R. (c) (i) Fictitious assets (ii) Net realisable value (iii) Does not (iv) Sale (v) Total assets (d) (i) AS 3 (B) Cash Flow Statement (ii) AS 6 (A) Depreciation Accounting (iii) AS 9 (D) Revenue recognition. (iv) AS 16 (C) Borrowing Cost (v) AS 22 (E) Accounting for tax on income. Question Paper of June Chapter - 2 : Depreciation Accounting June [4] (c) On 31 st December, 2011 two machines which were purchased on costing 50,000 and 20,000 respectively had to be discarded and replaced by two new machines costing 50,000 and 25,000 respectively. One of the discarded Machine was sold for 20,000 and other for 10,000. The balance of Machinery Account on April 1, 2011 was 3,00,000 against which the depreciation provision stood at 1,50,000. Depreciation was 10% on Reducing Balance Method. Prepare the Machinery Account, Provision for Depreciation Account and Machinery Disposal Account. (5 marks) Chapter- 3 : Accounting for Inventory June [5] (b) The cost of production of Product X is 450 which includes per unit cost of Material, Labour and overheads of 250, 110 and 90 respectively. At the end of the accounting year on the replacement cost of Raw Material is 210 per unit. There are 500 units of raw material in stock on Calculate as per AS-2 the value of closing stock or Raw Material when: (i) Finished Product is sold at 420 per unit, (ii) Finished Product sold at 490 per unit. (5 marks) Chapter- 4 : Capital and Revenue Expenditure June [4] (a) State whether the following items are in the nature of Capital, Revenue and/or Deferred Revenue Expenditure: (i) Expenditure on special advertising campaign 66,000; suppose the advantage will be received for six years.

19 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 19 (ii) An amount of 8,000 spent as legal charges for abuse of Trade Mark. (iii) Legal charges of 15,000 incurred for raising loan. (iv) Share issue expenses 5,000. (v) Freight charges on a new machine 1,500 and erection charges 1,800 for that machine. (1 5 = 5 marks) Chapter - 5 : Royalty Accounts June [3] (a) Explain what is meant by fixed rights and fluctuating rights in recoupment of short working. (2 marks) Chapter - 6 : Hire Purchase and Instalment Payment June [3] (b) On 1 st April, 2010 Guru purchased a machinery for cash price of 5,06,872 on hire purchase system from Machinery Mart. Payment to be made 1,50,000 down and the balance by four equal annual instalments. Interest is 15% per annum. Guru depreciates machinery at 20% per annum on written down value method. Guru paid down payment and first two instalments but could not pay the remaining instalments. On 31 st March, 2013 the Machinery Mart took possession of machinery. You are required to prepare Machinery Account and Machinery Mart Account in the books of Guru. (7 marks) Chapter - 7 : Accounting for Non Profit Making Organization June [5] (a) Jodhpur Club furnishes you the Receipts and Payments Account for the year ended : Receipts Payment Cash in hand ( ) Cash at Bank ( ) Donations Subscriptions Entrance fee Interest on investments Interest from banks Sale of old newspaper Sale of drama tickets 40,000 Salary 1,00,000 Repair expenses 50,000 Furnitures 1,20,000 Investments 10,000 Misc. expenses 1,000 Insurance premium 4,000 Billiards table and other 1,500 sports items 10,500 Stationery expenses Drama expenses Cash in hand ( ) Cash at Bank ( ) 20,000 5,000 60,000 60,000 5,000 2,000 80,000 1,500 5,000 26,500 72,000 3,37,000 3,37,000

20 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 20 Additional information: (i) Subscriptions in arrear for ,000 and subscription in advance for the year ,500. (ii) 400 was the insurance premium outstanding as on (iii) Miscellaneous expenses prepaid 900. (iv) 50% of donation is to be capitalized. (v) Entrance fees to be treated as revenue income. (vi) 8% interest has accrued on investments for five months. (vii) Billiards table and other sports equipments costing 3,00,000 were purchased in the financial year and of which 80,000 was not paid There is no charge for Depreciation to be considered. You are required to prepare Income and Expenditure Account for the year ended and Balance sheet of the Club as at (10 marks) Chapter - 8A : Partnership-Fundamental June [4] (b) A, B and C started a partnership firm on A introduced 10,000 on and further introduced 4,000 on B introduced 25,000 at first on but withdraw 5,000 from the business on C introduced 15,000 at the beginning on , increased it by 5,000 on and reduced it to 10,000 on During the year 2012 they made a net profit of 75,500. The partners decided to provide interest on their capitals at 10% p.a. and to divide the balance of profit in their effective capital contribution ratio. Prepare the Profit and Loss Appropriation Account for the year ended (5 marks) June [8] Write Short Notes : (e) Guaranteed Partnership. (5 marks) Chapter - 8E : Dissolution of Partnership June [2] (c) Ram, Rahim and Robert are partners in a firm sharing profits and losses in the proportion of 3 : 3 : 2. Their Balance Sheet as on was as follows: Liabilities Assets Partners Capital Accounts: Ram Rahim Robert 75,000 75,000 1,00,000 2,50,000 Bank Stock Investments Debtors Land and Building 55,000 69,000 6,000 70,000 1,25,000

21 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 21 Partners Current Account: Ram Rahim Robert Sundry creditors Goodwill 25,000 15,000 25,000 12,500 52,500 47,500 3,50,000 3,50,000 They decided to dissolve the firm on They report the result of realization as follows: Land and Buildings 90,000 realized in cash Debtors 60,000 realized in cash Investments 5,500 taken over by Ram Stock 75,500 taken over by Rahim Goodwill 18,000 taken over by Robert The realization expenses amounted to 2,000. Close the Accounts of the firm. (5 marks) Chapter - 9 : Branch Accounts June [2] (b) A Company with its Head Office at Kolkata has a Branch at Chennai. The Branch receives all goods from Head Office who remits cash for all expenses. Total Sales by Branch for year ended amounted to 6,50,000 out of which 75% on Credit. Other details for Chennai Branch were as under: Stock 4,000 30,000 Debtor 45,000 30,000 Petty Cash 250 Petty Cash sent by Head Office 3,000 but 2,500 is spent for Petty Expenses. The Expenses of 45,000 are actually spent by Branch. All sales are made by the Branch at Cost plus 25%. You are required to prepare the Chennai Branch A/c in the Books of Head Office for the year ended (5 marks) Chapter - 10 : Departmental Accounts June [6] (a) Distinguish between Branch and Departmental Accounting. (2 marks)

22 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 22 (c) Surya Co. Ltd. has three departments. In made purchases during the financial year as below at a total cost of 2,00,000 Stock as on Dept. A = 240 units Dept. B = 160 units Dept. C = 304 units Sales made were Dept. A 2040 units at 20 each Dept. B 3840 units at each Dept. C 4992 units at 25 each The rate of gross profit is uniform for all the departments. Assume the unit price of opening stock and purchase unit cost are uniform. Prepare Departmental Trading Account. (7 marks) Chapter - 11 : Accounting Standards June [8] Write Short Notes : (d) Segment Reporting (AS 17); (5 marks) Chapter - 12 : Issue and Forfeiture of Share June [3] (c) X Co. Ltd. decided to buyback 10,000 equity shares of 10 each. It sold investments (Face value) 70,000 for 95,000. It bought 10,000 equity shares in the open market for 90,000 out of free reserves. The shares bought back were cancelled. The expenses of buyback was 1,000. Pass necessary journal entries in the books of X Co. Ltd. to record the above transactions. (6 marks) June [8] Write Short Notes : (a) Over/Under subscription; (5 marks) Chapter - 14 : Issue and Redemption of Debenture June [7] (c) Esteem Ltd. made the following issue of debentures in May 2012: (i) 2000, 11% debentures of 100 each was issued to a creditor who supplied a machine for 1,80,000. (ii) 3000, 11% debentures of 100 each at a premium of 5%. (iii) 1000, 11% debentures of 100 each to the Bankers as collateral security for a loan of 70,000. Pass journal entries to record the above transactions in the Books of Esteem Ltd. (4 marks)

23 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 23 Chapter - 15 : Company Final Account June [2] (a) Prepare the Balance Sheet as at from the particulars furnished by M/s PRAN Ltd. as per revised Schedule VI of the Companies Act: Particulars Amount () Particulars Amount () Share Capital 7,50,000 Capital Redemption Reserve 20,000 Calls in Arrear 5,000 Investment in 6% GP Notes (Tax Free) 3,00,000 Land 2,20,000 Profit and Loss Account 65,000 Building 2,00,000 Cash in Hand 25,000 General Reserve 50,000 Debtor 10,000 Loan from IDBI 1,00,000 Stock 1,00,000 Sundry Creditors 1,50,000 Goodwill 25,000 (5 marks) June [6] (b) The following items are extracted from the Balance Sheet of Best Ltd. as at 1 st April, 2012: (i) 9% Preference Shares of 100 each 50,00,000 (ii) Equity Shares of 10 each ( 8 paid up) 80,00,000 (iii) General Reserve 26,00,000 (iv) Securities Premium 20,00,000 (v) 12% Debentures 40,00,000 Profit before interest and tax for the year ending on was 44,80,000. The Board of Directors of the Company proposed payment of Preference Share Dividend and Equity Share 20%. The Board also declared Capital Bonus out of General Reserve for making partly paid-up shares into fully paid-up. Ignore Corporate Dividend Tax. Provision to be made for 30%. 7.5% of Net Profit to be transferred to General reserve. You are required to show the Journal entries to be passed to incorporate the Recommendations and adjustments. (6 marks) Chapter - 18 : Banking Companies June [8] Write Short Notes : (b) Rebate on Bills Discounted; (5 marks)

24 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 24 Chapter - 20 : Insurance Companies June [7] (a) BISLA Life Insurance Company furnishes you the following information: Life Insurance fund on ,40,00,000 Net Liability on as per Actuarial Valuation 1,20,00,000 Interim Bonus paid to Policy holders during Intervaluation Period 2,50,000 You are required to prepare: (a) Valuation Balance Sheet (b) Statement of Net Profit for the Valuation Period. (3 marks) June [8] Write Short Notes : (c) Commission on Reinsurance ceded/accepted; (5 marks) Chapter - 21 : Interpretation of Financial Statement June [7] (b) Following are the ratios relating to the trading activities of Chinu Ltd.: Gross Profit Ratio 30% Debtors/Receivables Turnover Ratio 5 times Creditors Turnover Ratio 4 times Stock Turnover Ratio 5 times Gross Profit for the year ended 31 st March, 2013 amounted to 8,40,000. Opening debtors of the year were 64,000 above the closing debtors. Closing Stock of the year was 125% of the Opening Stock. Opening Creditors were 20% of the purchases for the year. You are required to find out the : (i) Sales; (ii) Purchases (equal to cost of goods sold); (iii) Opening and Closing Debtors. (iv) Opening and Closing Creditors; (v) Opening and Closing Stocks. (8 marks) Chapter - 22 : Objective Questions June [1] {C} (a) From the four alternatives given against each of the following cases, indicate the correct answer: (just state a, b, c or d) (i) At the year end, an amount outstanding for electricity consumed during that year will be dealt in the Accounts for the year by following the accounting concept of (a) Realisation (b) Accrual (c) Conservatism (d) None of the above (ii) Contingent Liability would appear (a) On the liability side (b) On the asset side (c) As a note in Balance Sheet (d) None of the above

25 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 25 (iii) The effect of timing difference is called as (a) Current Tax (b) Deferred Tax (c) Minimum Tax (d) None of the above (iv) At the time of public issue of shares the sequence of steps taken are (a) Issue prospectus > Select Merchant Banker > Receive money from applicants (b) Select Merchant Banker > Receive money from applicants > Issue prospectus (c) Select Merchant Banker > Issue prospectus > Receive money from applicants (d) None of the above (v) Interest and Dividends received in the case of a manufacturing concern should be classified as cash flow from (a) Operating activities (b) Financing activities (c) Investing activities (d) None of the above (vi) Redemption of Preference Share of a Company is (a) Compulsory (b) Optional (c) Conditional (d) None of the above (1 x 6 = 6 marks) (b) State whether the following statements are TRUE (T) or FALSE (F): (i) Sinking fund method of depreciation takes into account the cost of an asset as well as interest also thereon at given rate. (ii) Purchase of a technical know-how is revenue expenditure. (iii) Transactions are recorded on accrual basis in the Income and Expenditure Account. (iv) When the goods are returned by Branch, goods sent to Branch account will be debited in the books of Head Office. (v) Balance of securities premium account is available for redemption of preference shares. (1 x 5 = 5 marks) (c) Fill up the blanks in the following sentences using appropriate word from the alternatives indicated: (i) Royalty account is a account in nature (nominal/real). (ii) The excess of issue price of share over their face value is termed as (discount/securities premium). (iii) Revenue nature receipts and payments which relates to a particular accounting period are shown in the account (Receipts and Payments/ Income and Expenditure).

26 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 26 (d) (iv) As per AS-26, at the preliminary project stage the internally generated software should recognised as an asset (be/not be). (v) As per Indian Companies Act, maximum limit of managerial remuneration for full time single managerial personnel is (5%/3%). (1 x 5 = 5 marks) Match the following in Column I with the appropriate in Column II: Column I Column II (i) Repossess the goods (a) AS-26 (ii) Non Performing Assets (b) Banking Companies (iii) Intangible Assets (c) Piecemeal distribution (iv) Related Party Disclosures (d) Hire Purchase System (v) Maximum Loss Method (e) AS-28 (e) (f) No matching statement found (1 x 5 = 5 marks) In the following cases, one out of four answers is correct. Indicate the correct answer (=1 mark) and give brief workings in support of your answer (=1 mark): (i) Working capital of a company is 21,28,000 and total debts are 42,50,000. If the company s long term debts are 27,30,000 then current ratio will be (a) 0.78 :1 (b) 1.4 : 1 (c) 1.14 : 1 (d) 2.4 : 1 (ii) A and B are partners sharing profit/loss in the ratio of 3 : 2. They admit C into partnership for 1/6 share in the profit which he aquired equally from the old partners. The new profit sharing ratio will be (a) 3 : 2 : 1 (b) 1 : 1 : 1 (c) 31 : 19 : 10 (d) 14 : 6 : 4 ((1 + 1) x 2 = 4 marks) Shuchita Prakashan (P) Ltd. 25/19, L.I.C. Colony, Tagore Town, Allahabad Visit us :

27 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 27 FOR NOTES

28 Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 28 FOR NOTES