CA - IPCC COURSE MATERIAL

CA - IPCC COURSE MATERIAL Quality Education beyond your imagination... GUESS QUESTION PAPERS FOR NOV 2015 IPCC EXAMS GROUP-I (RELEASED ON 11 TH OCT 2015) Cell: 98851 25025 / 26 Visit us @ www.mastermindsindia.com Mail: mastermindsinfo@ymail.com Facebook Page: Masterminds For CA Youtube Channel: Masterminds For CA 1

INDEX S.No Subject Pages 1. ACCOUNTS Guess paper 1 3 10 Guess paper 2 11 17 Guess Paper 3 18 26 2. Law, Ethics and B.C Guess paper 1 27 28 Guess paper 2 29 30 3. Cost Accounting and Financial Management Guess paper 1 31 35 Guess paper 2 36 40 4. Taxation Guess paper 1 41 47 Guess paper 2 48 53 Dear Students: Our main objective in releasing Guess Question papers for IPCC examinations is to help the CA Students to achieve good pass percentage. In addition to these Guess Question Papers we have already released Guess Questions for IPCC examinations. We hope that these sincere efforts will improve the self confidence of students, appearing for IPCC Examinations. Even if you are not well prepared for Group II, our advise is to attempt all the papers of Group II, atleast by preparing Guess Questions and Guess Question Papers. DISCLAIMER: Dear students, a) Since CA is a professional course it is impossible to predict the questions / problems which may come in the public examination. b) There are chances of getting questions / problems in the model which are similar to questions / problems given in question papers but don t expect exact questions / problems to repeat in the public examination. c) We have done this work based on the 33 rd edition of IPCC materials. d) These question papers are applicable for Nov 2015 attempt of IPCC only. e) Don t blame us even if you don t get any questions from these question papers in the public exams of IPCC. f) Even if you get good number of questions / problems from these question papers in the public examinations then it is purely coincidence. 2

No.1 for CA/CWA & MEC/CEC MASTER MINDS IPCC GROUP I, PAPER: 1 ACCOUNTING GUESS PAPER 1, FOR NOV 2015 EXAMS Total No. of Questions 7 Time Allowed 3 Hours Total No. of printed pages 8 Maximum Marks 100 Instructions to candidates:- 1) Questions No. 1 is compulsory. 2) Candidates are also required to answer any five questions from the remaining six questions. 3) Working notes should form part of the answer. 4) "Wherever necessary, suitable assumptions should be made and indicated in answer by the Candidates." MARKS 1) Answer the following: (4x5 = 20) a) The following information is available from the book of a trader from January 1 to March 31, 2011: 1. Total sales amounted to Rs.60,000 including the sale of old furniture for Rs.1,200 (book value Rs.3,500). The total cash sales were 80% less than the total credit sales. 2. Cash collection from debtors amounted to 60% of the aggregate of the opening debtors and credit sales for the period. Debtors were allowed cash discount for Rs.2,600. 3. Bills Receivable drawn during three months totalled Rs.6,000 of which bills amounting to Rs.3,000 were endorsed in favour of suppliers. Out of these endorsed B/R, a B/R for Rs.600 was dishonoured for non-payment, as the party became insolvent, his estate realising nothing. 4. Purchases totalled Rs.16,000 of which 10% was for cash. 5. A cheque received from a customer for Rs.6,000 was dishonoured; a sum of Rs.500 is irrecoverable: Bad Debts written off in the earlier years realised Rs.2,500. 6. Sundry debtors, as on 1st January, 2011 stood at Rs.40,000 You are required to show the Debtors' Ledger Adjustment Account in the General Ledger. b) A Ltd. purchased 1,00,000 MT for Rs.100 each MT of raw material and introduced in the production process to get 85,000 MT as output. Normal wastage is 5%. In the process, company incurred the following expenses: Direct Labour Rs.10,00,000 Direct Variable Overheads Rs.1,00,000 Direct Fixed Overheads Rs.1,00,000 (including interest Rs.40,625) Out of the above 80,000 MT was sold during the year and remaining 5,000 MT remained in closing stock. Due to fall in demand in market the selling price for the finished goods on the closing day was estimated to be Rs.105 per MT. Calculate the value of closing stock. c) In the Trial Balance of M/s. Sun Ltd. as on 31.3.2012, balance of machinery appears Rs.5,60,000. The company follows rate of depreciation on machinery @ 10% p.a. on Written Down Value Method. In scrutiny it was found that a machine appearing in the books on 1.4.2011 at Rs.1,60,000 was disposed of on 30.9.2011 at Rs.1,35,000 in part exchange of a new machine costing Rs.1,50,000. You are required to calculate: i) Total depreciation to be charged in the Profit and Loss Account. ii) Loss on exchange of machine. iii) Book value of machinery in the Balance Sheet as on 31.3.2012 IPCC _Nov 2015_ Guess Question Papers 3

Ph: 98851 25025/26 www.mastermindsindia.com d) M/s Excellent Construction Company Ltd. undertook a contract to construct a building for Rs. 3 crores on 1 st September, 2011. On 31st March, 2012 the company found that it had already spent Rs.1 crore 80 lakhs on the construction. Prudent estimate of additional cost for completion was for Rs.1 crore 40 lakhs. What amount should be charged, to revenue in the final accounts for the year ended 31st March, 2012 as per provisions of Accounting Standard 7(Revised). 2) Answer the following: 16M S.P. Construction Co. finds itself in financial difficulty. The following is the balance sheet on 31 st Dec.2005. Name of the Company : S.P. Construction Co Ltd Balance Sheet as at : 31-12-2005 Particulars Notes No. Rs. 1 2 3 1 2 3 1 2 a b a a b a a b c (i) (ii) Note to Accounts: EQUITY AND LIABILITIES: Shareholder s funds Share capital Reserves and Surplus IPCC _Nov 2015_ Guess Question Papers 4 1 2 2,70,000 (39,821) Non-current liabilities Long tem borrowings 3 9,6000 Current liabilities Trade Payable (Creditors) Other Current Liabilities ASSETS: Non current assets Fixed assets Tangible assets Intangible assets- (Good will) Current Assets Current investments (Investments (Quoted) in shares) Inventories (stock) Trade receivables(debtors) Particulars TOTAL TOTAL 1. Share capital 20,000 Equity Shares of Rs.10 each fully paid 5% Cum. Pref. Shares of Rs.10 each fully paid 2. Reserves and Surplus Profit and Loss A/c 3. Long tem borrowings 8% Debentures Loan from Directors 4. Other Current Liabilities Bank Overdraft Interest payable on Debentures 5. Tangible Assets Land Building (net) Equipment 4 96,247 49,513 4,71,939 5 1,94,000 60,000 Rs. 2,00,000 70,000 (39,821) 80,000 16,000 36,713 12,800 1,56,000 27,246 10,754 27,000 1,20,247 70,692 4,71,939

No.1 for CA/CWA & MEC/CEC MASTER MINDS The authorized capital of the company is 20,000 Equity Shares of Rs.10 each and 10,000 5% Cumulative Preference Shares of Rs.10 each. During a meeting of shareholders and Directors, it was decided to carry out a scheme of internal reconstruction. The following scheme has been agreed: 1. The equity shareholders are to accept reduction of Rs.7.50 per share and each equity share is to be re-designated as a share of Rs.2.50 each. 2. The equity shareholders are to subscribe for a new share on the basis of 1 for 1 at a price of Rs.3 per share. 3. The existing 7,000 preference Shares are to be exchanged for a new issue of 3,500 8% Cumulative preference shares of Rs.10 each and 14,000 Equity shares of Rs.2.50 each. 4. The Debenture holders are to accept 2,000 Equity Shares of Rs.2.50 each in lieu of interest payable. The interest rate is to be increased to 9 ½%. Further Rs.9,000 of this 9 1/2% Debentures are to be issued and taken up by the existing holders at Rs.90 for Rs.100. 5. Rs.6,000 of director s Loan is to be credited. The balance is to be settled by issue of 1,000 Equity shares of Rs.2.50 each. 6. Goodwill and the profit and loss account balance are to be written off. 7. The investment in shares is to be sold at current market value of Rs.60,000. 8. The bank overdraft is to be repaid. 9. Rs.46,000 is to be paid to trade creditors now and balance at quarterly intervals. 10. 10% of the debtors are to be written off. 11. The remaining assets were professionally valued and should be included in the books of account as follows: Particulars Land Building Equipment Stock IPCC _Nov 2015_ Guess Question Papers 5 Rs. 90,000 80,000 10,000 50,000 It is expected that due to changed condition and new management operating profit will be earned at the rate of Rs.50,000 p.a. after depreciation but before interest and tax. Due to losses brought forward it is unlikely that any tax liability will arise until 2007. You are required to show the necessary journal entries to affect the reconstruction scheme: Prepare the balance sheet of the company immediately after the reconstruction. 3) Answer the following: a) The B/s of New Light Ltd., for the years ended 31.3.01 and 2002 are as follows: 10M Name of the Company : New Light Ltd Balance Sheet as at : 31.3.02 and 31.03.01 1 a b Particulars EQUITY AND LIABILITIES: Shareholder s funds Share capital Reserves and Surplus Note No. Figures as at the end of current reporting period 31-03-02 Figures as at the end of the previous reporting period 31.03.01 1 2 3 4 1 2 18,80,000 11,40,000 16,00,000 9,20,000

Ph: 98851 25025/26 www.mastermindsindia.com 2 a Non-current liabilities Long term borrowings (9% debentures) 2,80,000 4,00,000 3 a b c Current liabilities Short term provisions Other current liabilities TOTAL 3 4 4,84,000 5,36,000 43,20,000 4,80,000 4,80,000 38,80,000 1 a I ASSETS: Non-current assets Fixed assets Tangible assets 5 26,40,000 22,80,000 2 a b c Current Assets Current Investments Cash and cash equivalents (cash) Other current assets TOTAL 6 3,20,000 10,000 13,50,000 43,20,000 4,00,000 10,000 11,90,000 38,80,000 Notes to Accounts: Particulars 31.03.02 31.03.01 1. Share capital: Equity Share capital 10% redeemable preference share capital 2. Reserves and Surplus: Capital reserve General reserve Profit and loss A/c 3. Short term provisions: Provision for tax Proposed dividend 4. Other current liabilities: Unpaid dividends Current liabilities 5. Tangible assets (Less) depreciations 6. Other current assets Preliminary expenses Other current assets Additional Information: 16,00,000 2,80,000 40,000 8,00,000 3,00,000 3,40,000 1,44,000 16,000 5,20,000 38,00,000 (11,60,000) 40,000 13,10,000 12,00,000 4,00,000-6,80,000 2,40,000 3,60,000 1,20,000-4,80,000 32,00,000 (9,20,000) 80,000 11,10,000 a. The company sold one fixed asset for Rs.1,00,000, the cost of which was 2,00,000 and the depreciation provided on it was Rs.80,000. b. The company also decided to write off another fixed asset costing Rs.56,000 on which depreciation amounting to Rs.40,000 has been provided. c. Depreciation on fixed assets provided Rs.3,60,000. d. Company sold some investment at a profit of Rs.40,000, which was credited to capital reserve. e. Debentures and preference share capital redeemed at 5% premium. IPCC _Nov 2015_ Guess Question Papers 6

No.1 for CA/CWA & MEC/CEC MASTER MINDS f. Company decided to value stock at cost, whereas previously the practice was to value stock at cost less 10%. The stock according to books on 31-3-2001 was Rs.2,16,000. The stock on 31-3-2002 was correctly valued at Rs.3,00,000. Prepare Cash Flow Statement as per revised Accounting Standard-3 by indirect method b) Mr. Hemant had Rs. 1,65,000 in the bank account on 1.1.2013 when he started his business. He closed his accounts on 31st March, 2014. His single entry books (in which he did not maintain any account for the bank) showed his position as follows: 6M Cash in hand Inventory in trade Debtors Creditors Particulars 31.3.2013 Rs. 1,100 10,450 550 2,750 31.3.2014 Rs. 1,650 15,950 1,100 1,650 On and from 1.2.2013, he began drawings Rs. 385 per month for his personal expenses from the cash box of the business. His account with the bank had the following entries: 1.1.2013 1.1.2013 to 31.3.2013 1.4.2013 to 31.3.2014 Particulars Deposits Rs. 1,65,000-1,26,500 Withdrawals Rs. - 1,22,650 1,48,500 The above withdrawals included payment by cheque of Rs. 1,10,000 and Rs. 33,000 respectively during the period from 1.1.2013 to 31.3.2013 and from 1.4.2013 to 31.3.2014 respectively for the purchase of machineries for the business. The deposits after 1.1.2013 consisted wholly of sale price received from the customers by cheques. Draw up Mr. Hemant s statement of affairs as at 31.3.2013 and 31.3.2014 respectively and work out his profit or loss for the year ended 31.3.2014. 4) Answer the following: 16M Anuj, Ayush and Piyush are in partnership sharing profits and losses in the ratio 2 : 2 : 1. Their Balance Sheet as on 31.3.2014 is as follows: Liabilities Rs. Assets Rs. Capital accounts: Fixed assets: Anuj 3,75,000 Plant 7,87,000 Ayush 2,80,000 Current assets: Piyush 2,25,000 8,80,000 Stock 1,03,000 General Reserve Creditors 1,88,000 2,16,000 Debtors Bank FD 1,56,000 2,25,000 Bank balance 13,000 12,84,000 12,84,000 Anuj decided to retire with effect from 1.4.2014. The remaining partners agreed to share profits and losses equally in future. The following adjustments were agreed to be made upon retirement of Anuj. (i) Goodwill was to be valued at 1 year purchase of the average profits of the preceding 3 years on the date of retirement. The average profits of the past 3 years were as follows: IPCC _Nov 2015_ Guess Question Papers 7

Ph: 98851 25025/26 www.mastermindsindia.com Year ended 31.3.2014 3,30,000 (as per draft accounts) 31.3.2013 2,32,000 31.3.2012 2,20,900 The partners decided not to raise goodwill account in the books. (ii) The assets were revalued as follows: Plant to be depreciated by 10% Creditors amounting to Rs. 10,000 were omitted to be recorded; Rs. 6,000 is to be written off from stock; Provision for doubtful debts to be created @ 5% of the debtors; Interest accrued on FD amounting to Rs. 9,000 was omitted to be recorded. The above adjustments were to be made from the profit for the year ended 31.3.2014 before calculation of goodwill. (iii) Anuj agreed to take over the bank FD including interest accrued thereon in part payment of his dues and the balance would remain as a loan, carrying interest of 8% p.a. (iv) Ayush and Piyush agreed to bring in sufficient cash to make their capital proportionate and maintain a bank balance of Rs. 1,50,000. You are required to prepare a. Capital accounts of partners as on 1.4.2014 giving effect to the above adjustments. b. Balance Sheet as on 1.4.2014 after Anuj s retirement. 5) Answer the following: a) A firm acquired two tractors under hire purchase agreements, details of which were as follows: 8M Particulars Cash price Deposit Interest (Deemed to accrue evenly over the period of agreement) Rs. Tractor A 1.4.2002 14,000 2,000 2,400 Tractor B 1.10.2002 19,000 2,680 2,880 Both agreements provided for payment to be made in twenty-four monthly instalments, commencing on the last day of the month following purchase, all instalments being paid on due dates. On 30 th June, 2003 Tractor B was completely destroyed by fire. In full settlement, on 10th July, 2003 an insurance company paid Rs.15,000 under a comprehensive policy out of which Rs.10,000 was paid to the hire purchase company in termination of the agreement. Any balance on the hire purchase company's account in respect of these transactions was to be written off. The firm prepared accounts annually to 31 st December and provided depreciation on tractors on a straight-line basis at a rate of 20% per annum rounded off to nearest ten rupees, apportioned as from the date of purchase and up to the date of disposal. You are required to record these transactions in the following accounts, carrying down the balances on 31 st December, 2002 and 31 st December, 2003: a. Tractors on hire purchase b. Provision for depreciation of tractors. c. Disposal of tractors d. Hire purchase Company. b) Mr. Purohit furnishes the following details relating to his holding in 8% Debentures (Rs.100 each) of P Ltd., held as Current assets: 8M IPCC _Nov 2015_ Guess Question Papers 8

No.1 for CA/CWA & MEC/CEC MASTER MINDS 1.04.2009 Opening balance Face value Rs.1,20,000, Cost Rs.1,18,000 1.07.2009 100 Debentures purchased ex-interest at Rs.98 1.10.2009 Sold 200 Debentures ex-interest at Rs.100 1.01.2010 Purchased 50 Debentures at Rs.98 cum-interest 1.02.2010 Sold 200 Debentures ex-interest at Rs.99 Due dates of interest are 30th September and 31st March. Mr. Purohit closes his books on 31.3.2010. Brokerage at 1% is to be paid for each transaction. Show Investment account as it would appear in his books. Assume FIFO method. Market value of 8% Debentures of P Limited on 31.3.2010 is Rs.99. 6) Answer the following: 16M Following is the Receipts and Payments Account of Mayur Club (not registered under Companies Act, 2013) for the year ended 31st March, 2015: Receipts Rs. Payments Rs. Opening balance (1.4.2014) Cash on hand Cash at bank Receipts: Subscriptions For the year 2013-14 For the year 2014-15 For the year 2015-16 Interest on bank Fixed deposits @10% 39,100 50,000 18,000 9,63,000 4,500 45,000 Payments: Sports materials Salaries Equipment purchased on 1.10.2014 Bank fixed deposits on 31.3.2015 Rent Ground maintenance Insurance Stationery Sundry expenses Closing balance as on 31.3.2015 3,04,500 3,15,000 60,000 1,50,000 1,48,500 22,120 38,400 3,450 5,880 Cash on hand Cash at bank 31,750 40,000 11,19,600 11,19,600 Following additional information is provided to you: (i) The club has 220 members. The annual subscription is Rs. 4,500 per member. (ii) Depreciation to be provided on furniture at 10% p.a. and on sports equipment at 15% p.a. (iii) On 31st March, 2015, stock of sports material in hand (after members use during the year) is valued at Rs. 78,000 and stock of stationery at Rs. 3,150. Rent for 1 month is outstanding. Unexpired insurance amounts to Rs. 9,600. (iv) On 31st March, 2014 the club had the following assets: Furniture Sports equipment Bank fixed deposit Stock of stationery Stock of sports material Unexpired insurance Subscription in arrear Rs. 2,70,000 Rs. 1,80,000 Rs. 4,50,000 Rs. 1,500 Rs. 73,500 Rs. 8,400 Rs. 22,500 Note: There was no liability on 31.3.2014. You are required to prepare: a. Income and Expenditure Account; and b. Balance Sheet as at 31st March, 2015. 7) Answer any four out of the following: (4 x 4 = 16) a) List the conditions to be fulfilled as per Accounting Standard 14 for an amalgamation to be in the nature of merger, in the case of companies. b) Mr. Green and Mr. Red had the following mutual dealings and desire to settle their account on the average due date: IPCC _Nov 2015_ Guess Question Papers 9

Ph: 98851 25025/26 www.mastermindsindia.com Sales by Green to Red: Purchase by Green from Red Amount ( Rs.) 6 th January, 2011 6,000 2 nd February, 2011 2,800 31 st March, 2011 2,000 sales by Green to Red Amount ( Rs.) 6 th January, 2011 6,600 9 th March, 2011 2,400 20 th March 2011 500 You are asked to ascertain the average due date. c) Rama Udyog Limited was incorporated on 1 st August, 2008. It had acquired a running business of Rama & Co. with effect from April 1, 2008. During the year 2008-09, the total sales were Rs.36,00,000. The sales per month in the first half year were half of what they were in the later half year. The net profit of the company, Rs.2,00,000 was worked out after charging the following expenses: (i) Depreciation Rs.1,08,000 (ii) Audit fees Rs.15,000 (iii) Directors fees Rs.50,000 (iv) Preliminary expenses Rs.12,000 (v) Office expenses Rs.78,000 (vi) Selling expenses Rs.72,000 and (vii) Interest to vendors upto August 31, 2008 Rs.5,000. Please ascertain pre-incorporation and post incorporation profit for the year ended 31 st March, 2009. d) On 20-7-2004, the godown and business premises of a merchant were affected by fire and from accounting records salvaged; the following information is made available to you. Stock of goods at cost on 1-4-2003 Stock of goods at 10% lower than cost as on 31-3-2004 Purchases of goods for the year from 1-4-2003 to 31-3-2004 Sales for the same period Purchases less returns for the period from 1-4-2004 to 20 th July 2004 Sales less returns for the above period 1,00,000 1,08,000 4,20,000 6,00,000 1,40,000 3,10,000 Sales upto 20 th July, 2004 included Rs.40,000 for which goods had not been dispatched. Purchases upto 20 th July, 2004 did not include Rs.20,000 for which purchase invoices had not been received from suppliers though goods have been received at the godown. Goods salvaged from the accident were worth Rs.12,000 and these were handed over to the insured. Ascertain the value of the claim for loss of goods which could be preferred on the insurer. e) On 25th September, 2009, Planet Advertising Limited obtained advertisement rights for world cup hockey tournament to be held in November / December 2009 for Rs. 520 lakhs. They furnish the following information: (i) The company obtained the advertisements for 70% of available time for Rs. 700 lakhs by 30th September, 2009. (ii) For the balance time they got the bookings in October 2009 for Rs. 240 lakhs (iii) All the advertisers paid the full amount at the time of booking the advertisement. (iv) 40% of the advertisements appeared before the public in November 2009 and balance 60% appeared in the month of December 2009. You are required to calculate the amount of profit / loss to be recognized for the month of November and December 2009, as per Accounting standard 9 THE END IPCC _Nov 2015_ Guess Question Papers 10

No.1 for CA/CWA & MEC/CEC MASTER MINDS IPCC GROUP I, PAPER: 1 ACCOUNTING GUESS PAPER 2, FOR NOV 2015 EXAMS Total No.of Questions 7 Time Allowed 3 Hours Total No. of printed pages 7 Maximum Marks 100 Instructions to candidates:- 1) Questions No. 1 is compulsory. 2) Candidates are also required to answer any five questions from the remaining six questions. 3) Working notes should form part of the answer. 4) "Wherever necessary, suitable assumptions should be made and indicated in answer by the Candidates." MARKS 1) Answer the following: (4x5 = 20) a) The premises of XY Limited was partially destroyed by fire on 1 st March, 2004 and as a result, the business was practically disorganized up to 31 st August 2004. The company is insured under a loss of profits policy for Rs.1,65,000 having an indemnity period of 6 months. From the following information, ascertain the claim for loss of profit. Actual turnover during the period of dislocating (1.3.04 to 31.8.04) Turnover for the corresponding period in the (1.3.03 to 31.8.03) Turnover for the 12 months immediately preceding the fire (1.3.03 to 28.2.04) Net profit for the last financial year Insured standing charge for the last financial year Uninsured standing charges Turnover for the last financial year 80,000 2,40,000 6,00,000 90,000 60,000 5,000 5,00,000 Due to substantial increase in trade, before and upto the time of the fire, it was agreed that an adjustment of 10% should be made in respect of the upward trend in turnover. The company incurred additional expenses amounting to Rs.9,300, immediately after the fire and but for this expenditure, the turnover during the period of dislocation would have been only Rs.55,000. There was also a saving during the indemnity period of Rs.2,700 in insured standing charges as a result of the fire. b) Anil pharma Ltd. ordered 16,000 kg of certain material at Rs. 160 per unit The purchase price includes excise duty Rs. 10per kg. in respect of which full CENVAT Credit is admissible. Freight incurred amounted to Rs. 1,40,160. Normal transit Loss is 2%. The Company actually received 15,500 kg. and consumed 13,600 kg. of material. Compute cost of inventory under AS-2 and amount of abnormal loss c) An item of machinery was purchased on 1.4.2008 for Rs. 2,00,000. The WDV depreciation rate applicable to the machinery was 15%. The written down value of the machinery as on 31.3.2010 was Rs. 1,44,500. On 1.4.2010, the enterprise, decided to change the method from written down value (WDV) to straight line method (SLM). The enterprise decided to write off the book value of Rs. 1,44,500, over the remaining useful life of machinery i.e. 5 years. Out of the total useful life 7 years, 2 years have already elapsed. Comment whether the accounting treatment is correct. If not, give the correct accounting treatment with reasons. d) On 31st October, 2009, Bharat Construction Co. Ltd. undertook a contract to construct a flyover for Rs.215 crores. On 31st March, 2010 the company found that its Work certified for Rs.100 Crores and work to be certified for Rs. 35 crores. Prudent estimate of additional cost for completion was Rs. 90 Crores. What amount should be charged to Revenue in the financial accounts for the year ended 31st March, 2010 as per provisions of Accounting Standard 7. IPCC _Nov 2015_ Guess Question Papers 11

Ph: 98851 25025/26 www.mastermindsindia.com 2) Answer the following: 16M The Balance Sheet of A & Co. Ltd. as on 31-12-2005 is as follows: 1 2 3 1 2 a b a a b a a b c d (i) (ii) Note to Accounts: Name of the Company : A & Co. Ltd Balance Sheet as at : 31-12-2005 Particulars Notes No. Rs. 1 2 3 EQUITY AND LIABILITIES: Shareholder s funds Share capital Reserves and Surplus IPCC _Nov 2015_ Guess Question Papers 12 1 2 11,50,000 (4,35,000) Non-current liabilities Long tem borrowings 3 4,75,000 Current liabilities Trade Payable-(Creditors) Other Current Liabilities 4 ASSETS: Non current assets Fixed assets Tangible assets Intangible assets Current Assets Current investments (At cost) Inventories (Stock) Trade receivables (Debtors) Other current assets- (Deferred Advertising ) TOTAL TOTAL 5 6 3,00,000 2,17,500 17,07,500 4,75,000 1,67,500 55,000 4,25,000 4,85,000 1,00,000 17,07,500 Particulars Rs. 1. Share capital 4,000 6% Cumulative Preference Shares of Rs.100 each 4,00,000 75,000 Equity shares of Rs.10 each 7,50,000 2. Reserves and Surplus Profit and Loss A/c (4,35,000) 3. Long tem borrowings 6% Debentures 3,75,000 (Secured on Freehold Property) Directors Loans 1,00,000 4. Other Current Liabilities Bank Overdraft 1,95,000 Accrued interest(on debentures) 22,500 5. Tangible Assets Free hold property 4,25,000 Plant 50,000 6. Intangible Assets Goodwill 1,30,000 Patent 37,500 The court approved a Scheme of re organization to take effect on 1-1-2006, whereby: 1. The Preference Share to be written down to Rs.75 each and Equity Shares to Rs.2 each. 2. Of the Preference Share dividends which are in arrears for four years, three fourth to be waived and Equity Shares of Rs.2 each to be allotted for the remaining quarter.

No.1 for CA/CWA & MEC/CEC MASTER MINDS 3. Accrued interest on debentures to be paid in cash. 4. Debentures holders agreed to take over freehold property, book value Rs.1,00,000 at a valuation of Rs.1,20,000 in part repayment of their holdings and, to provide additional cash of Rs.1,30,000 secured by a floating charge on company s assets at an interest rate of 8% p.a. 5. Patents, Goodwill and Deferred Advertising to be written off. 6. Stock to be written off by Rs.65,000. 7. Amount of Rs.68,500 to be provided for bad debts. 8. Remaining freehold property to be re-valued at Rs.3,87,500. 9. Trade Investments be sold for Rs.1,40,000 10. Directors to accept settlement of their loans as to 90% thereof by allotment of equity shares of Rs.2 each and as to 5% in cash, and balance 5% being waived. 11. There were capital commitments totaling Rs.2,50,000. These contracts are to be cancelled on payment of 5% of the contract price as a penalty. 12. Ignore taxation and cost of the scheme. You are requested to show Journal entries reflecting the above transactions (including cash transactions) and prepare the Balance Sheet of the company after completion of the Scheme. 3) Answer the following: a) The Sport writers Club gives the following Receipts and Payments Account for the year ended March 31, 2008: 10M Dr. Receipts and Payments A/c Cr. Receipts Rs. Payments Rs. To Balance b/d To Subscriptions To Miscellaneous Income To Interest on Fixed deposit 4,820 28,600 700 2,000 36,120 Figures of other assets and liabilities are furnished as follows: As at March 31 By Salaries By Rent and Electricity By Library books By Magazines and news papers By sundry expenses By Sports equipments By Balance c/d 12,000 7,220 1,000 2,172 10,278 1,000 2,450 36,120 Particulars 2007 2008 Salaries outstanding Outstanding rent & electricity Outstanding for magazines and newspapers Fixed deposit (10%) with bank Interest accrued thereon Subscription receivables Prepaid expenses Furniture Sports equipments Library books 710 864 226 20,000 500 1,263 417 9,600 7,200 5,000 170 973 340 20,000 500 1,575 620 The closing values of furniture and sports equipments are to be determined after charging depreciation at 10% and 20% p.a. respectively inclusive of the additions, if any, during the year. The Club s library books are revalued at the end of every year and the value at the end of March 31, 2008 was Rs.5,250. From the above information you are required to prepare: (i) The Club s Balance Sheet as at March 31, 2007; IPCC _Nov 2015_ Guess Question Papers 13

Ph: 98851 25025/26 www.mastermindsindia.com (ii) The Club s Income and Expenditure Account for the year ended March 31, 2008. (iii) The Club s Closing Balance Sheet as at March 31, 2008. b) Raj Ltd. gives you the following information for the year ended 31 st March, 2011: 6M (i) Sales for the year Rs.48,00,000. The Company sold goods for cash only. (ii) Cost of goods sold was 75% of sales. (iii) Closing inventory was higher than opening inventory by Rs.50,000. a. Trade creditors on 31.3.2011 exceed the outstanding on 31.3.2010 by Rs.1,00,000. b. Tax paid during the year amounts to Rs.1,50,000. c. Amounts paid to Trade creditors during the year Rs.35,50,000. d. Administrative and Selling expenses paid Rs.3,60,000. e. One new machinery was acquired in December, 2010 for Rs.6,00,000. f. Dividend paid during the year Rs.1,20,000. g. Cash in hand and at Bank on 31.3.2011 Rs.70,000. h. Cash in hand and at Bank on 1.4.2010 Rs.50,000. Prepare Cash Flow Statement for the year ended 31.3.2011 as per the prescribed Accounting standard. 4) Answer the following: a) X Transport Ltd. purchased from Delhi Motors 3 Tempos costing Rs. 50,000 each on the hire purchase system on 1-1-2010. Payment was to be made Rs. 30,000 down and the remainder in 3 equal annual instalments payable on 31-12-2010, 31-12-2011 and 31-12-2012 together with interest @ 9%. X Transport Ltd. write off depreciation at the rate of 20% on the diminishing balance. It paid the instalment due at the end of the first year i.e. 31-12-2010 but could not pay the next on 31-12-2011. Delhi Motors agreed to leave one Tempo with the purchaser on 1-1-2012 adjusting the value of the other 2 Tempos against the amount due on 31-12-2011. The Tempos were valued on the basis of 30% depreciation annually. Show the necessary accounts in the books of X Transport Ltd. for the years 2010, 2011 and 2012. 8M b) AVL is an unemployed science graduate with typewriting qualification. Being unable to get employment for more than Rs.500 p.m. he decided to start his own typewriting institute. He approached U.B.C. Bank which sanctioned him a loan of Rs.20,000 on 1.1.2010. His father gifted him Rs.5,000 on 1.1.2010. He purchased 6 typewriters worth Rs.24,000. Unable to understand the accounts properly, he seeks your help in preparing a Profit and Loss Account and Balance Sheet relating to the year ending 31.12.2010. His pass book reveals the following: 8M S. No. Particulars Rs. a. Expenses of the institute 8,400 b. Salary to self 4,000 c. Monthly fees collected 32,700 d. Examination fees collected 4,200 The following are the additional details available: 1. During the year AVL purchased a second-hand cycle costing Rs.400 from a student who owed monthly fees of Rs.100. The balance was paid. The cycle is used for the institute only. 2. AVL helped a friend by encashing a cheque for Rs.1,000 which was dishonoured. The friend has so far repaid only Rs.400. 3. AVL has taken 600 per month for personal expenses in addition to his salary. 4. AVL runs the institute from his house for which a rent of Rs.600 p.m. is paid. 50% may reasonably be allocated for his own living 5. The following are outstanding as at end of 31.12.2010 IPCC _Nov 2015_ Guess Question Papers 14

No.1 for CA/CWA & MEC/CEC MASTER MINDS S. No. Particulars Rs. a. Fees receivable 2,200 b. Expenses payable 1,000 c. Salary of self for Nov. and Dec. d. Stock of stationery on hand 200 6. Provide depreciation 20% on typewriters and cycle 7. The loan from bank is repayable at Rs.500 p.m. from the beginning of July onwards. Interest is payable at 12% per annum in addition to installments for principal Assume that all transactions are routed through bank and no cash is handled. 5) Answer the following: 16M A, B and C are in partnership sharing profits & losses in the ratio 3:2:1 respectively. The Balance Sheet of the partnership firm as on 31.12.1997 is as under: Liabilities Rs. Assets Rs. Capital A/cs: A 85,000 B 65,000 C 35,000 Current A/cs: A 3,714 B (2,509) C 4,678 Loan C Sundry Creditors Bank Overdraft 1,85,000 5,883 28,000 19,036 4,200 2,42,119 Premises. Plant Vehicles Fixtures Stock Debtors Cash 90,000 37,000 15,000 2,000 62,379 34,980 760 2,42,119 C decides to retire from the business as on the above date and D is admitted as a partner on that date. The following matters are agreed: 1. Assets revalued as: Premises - Rs.1,20,000; Plant - Rs.35,000; Stock - Rs.54,179. 2. A provision of Rs.3,000 is to be created against debtors. 3. Goodwill is to be recorded in the books on the day C retires at Rs.42,000. The partners in the new firm do not wish to maintain a Goodwill A/c so that amount is to be written-off against the New partners Capital A/cs. 4. A & B are to share profit in the same ratio as before, D is to have the same share of profits as B. 5. C is to take a car at its book value of Rs.3,900 in part payment, and the balance of all he is owed by the firm in cash except Rs.20,000 which he is willing to leave as a Loan A/c. 6. The partners in the new firm are to start on an equal footing so far as Capital and Current A/cs are concerned. D is to contribute cash to bring his Capital & Current A/cs to the same amount as the original partner from the old firm who has the lower investment in the business. The original partner in the old firm who has the higher investment will draw out cash so that his Capital & Current A/c balances equal those of his new partners. Revaluation profit (or) loss is to be adjusted in the Partners Current A/c. Prepare necessary Ledger Accounts to record the above transactions and to prepare the Balance Sheet of the new firm as at 1.1.98. IPCC _Nov 2015_ Guess Question Papers 15

Ph: 98851 25025/26 www.mastermindsindia.com 6) Answer the following: a) Prepare the General Ledger Adjustment Accounts as will appear in the Debtors and Creditors Ledger from the information given below: 10M Debtor s Ledger Creditor s Ledger Transaction for the year ended 31.3.99 Total Sales Cash Sales Total Purchases Credit Purchases Creditors paid off (in full settlement of Rs.40,000) Received from Debtors (in full settlement of Rs.59,000) Returns from debtors Returns to Creditors Bills Accepted for Creditors Bills Payable matured Bills Accepted by Customers Bills Receivables Dishonoured Bills Receivables Discounted Bills Receivables Endorsed to Creditors Endorsed Bills Dishonoured Bad Debts Written off (After deducting bad debts recovered Rs.300) Provision for Doubtful Debts Transfer from Debtors Ledger to Creditors Ledger Transfer from Creditors Ledger to Debtors Ledger Balances on 31.3.99 Debtors Ledger (Cr.) Creditors Ledger (Dr.) Particulars Dr. Cr. 47,200 240 280 26,300 IPCC _Nov 2015_ Guess Question Papers 16 420 1,20,000 8,100 89,500 67,000 30,500 58,200 2,600 1,800 5,500 8,000 20,100 1,500 5,000 4,000 1,000 2,200 550 1,100 1,900 b) On 1 st April, 2009, XY Ltd. has 15,000 equity shares of ABC Ltd. at a book value of Rs.15 per share (face value Rs.10 per share). On 1 st June, 2009, XY Ltd. acquired 5,000 equity shares of ABC Ltd. for Rs.1,00,000 on cum right basis. ABC Ltd. announced a bonus and right issue. 1. Bonus was declared, at the rate of one equity share for every five shares held, on 1 st July 2009. 2. Right shares are to be issued to the existing shareholders on 1 st September 2009. The company will issue one right share for every 6 shares at 20% premium. No dividend was payable on these shares. 3. Dividend for the year ended 31.3.2009 were declared by ABC Ltd. @ 20%, which was received by XY Ltd. on 31 st October 2009. XY Ltd. (i) Took up half the right issue. (ii) Sold the remaining rights for Rs. 8 per share. (iii) Sold half of its share holdings on 1st January 2010 at Rs.16.50 per share. Brokerage being 1%. You are required to prepare Investment account of XY Ltd. for the year ended 31 st March 2010 assuming the shares are being valued at average cost. 6M 7) Answer any four out of the following: (4 x 4 = 16) a) BHARAT Ltd. provides you the following information: Year Dividend Paid up capital 2001-2002 9% Rs.1,00,000 2002-2003 8% Rs.1,00,000 2003-2004 10% Rs.1,00,000 2004-2005 7% Rs.1,00,000 2005-2006 6% Rs.1,00,000 380

No.1 for CA/CWA & MEC/CEC MASTER MINDS Equity share capital Rs. 1,00,000 Reserve as on 01.04.2006 Rs.50,000 Loss after charging depreciation for the year 2006-2007 Rs.6,000 Depreciation for year 2006-2007 Rs.6,000 Required: X Ltd. desires to declare divided for the loss year 2006-2007. Can it do so? If yes, at what rate, it may declare dividend? b) Mr.Black accepted the following bills drawn by Mr. White. Date of Bill Period Amount (Rs.) 09.03.2010 16.03.2010 07.04.2010 18.05.2010 4 months 3 months 5 months 3 months 4,000 5,000 6,000 5,000 He wants to pay all the bills on a single date. Interest chargeable is @ 18% p.a. and Mr. Black wants to save Rs.150 on account of interest payment. Find out the date of on which he has to effect the payment to save interest of Rs.150. Base date to be taken shall be the earliest due date. c) What are the advantages of customised accounting packages? d) Arjun Ltd. sells equipments through its dealers. One of the Conditions at the time of sale is payment of consideration in 14 days and in the event of delay interest chargeable @ 15 % per annum. The company has not realized interest from the dealers in the past. However, for the year ended 31.3.2006, it wants to recognize interest due on the balances due from dealers. The amount is ascertained at Rs. 9 Lakhs. Decide whether the income by way of interest from dealers is eligible for recognition as per AS-9. e) ABC. Ltd is constructing a fixed asset. Following are the expenses incurred on the construction: Rs. Materials 10,00,000 Direct Expenses 2,50,000 Total direct labour 5,00,000 (1/10 th of the labour time was chargeable to the construction) Total office & administrative expenses 8,00,000 (5% is chargeable to the construction) Depreciation on the assets used for the construction of this asset 10,000 Calculate the cost of fixed assets. THE END IPCC _Nov 2015_ Guess Question Papers 17

Ph: 98851 25025/26 www.mastermindsindia.com IPCC GROUP I, PAPER: 1 ACCOUNTING GUESS PAPER 3, FOR NOV 2015 EXAMS Total No.of Questions 7 Time Allowed 3 Hours Total No. of printed pages 9 Maximum Marks 100 Instructions to candidates:- 1) Questions No. 1 is compulsory. 2) Candidates are also required to answer any five questions from the remaining six questions. 3) Working notes should form part of the answer. 4) "Wherever necessary, suitable assumptions should be made and indicated in answer by the Candidates." MARKS 1) Answer the following: (4x5 = 20) a) On the basis of the following information prepare a Cash Flow Statement for the year ended 31st March, 2013: (i) Total sales for the year were Rs. 199 crore out of which cash sales amounted to Rs. 131 crore. (ii) Cash collections from credit customers during the year, totalled Rs. 67 crore. (iii) Cash paid to suppliers of goods and services and to the employees of the enterprise amounted to Rs. 159 crore. (iv) Fully paid preference shares of the face value of Rs. 16 crore were redeemed and equity shares of the face value of Rs. 16 crore were allotted as fully paid up at a premium of 25%. (v) Rs. 13 crore were paid by way of income tax. (vi) Machine of the book value of Rs. 21 crore was sold at a loss of Rs. 30 lakhs and a new machine was installed at a total cost of Rs. 40 crore. (vii) Debenture interest amounting Rs. 1 crore was paid. (viii) Dividends totalling Rs. 10 crore was paid on equity and preference shares. Corporate dividend tax @ 17% was also paid. (ix) On 31st March, 2012 balance with bank and cash on hand totalled Rs. 9 crore. b) M/s Omega & Co. (a partnership firm), had a turnover of Rs. 1.25 crores (excluding other income) and borrowings of Rs. 0.95 crores in the previous year. It wants to avail the exemptions available in application of Accounting Standards to non-corporate entities for the year ended 31.3.2013. Advise the management of M/s Omega & Co in respect of the exemptions of provisions of ASs, as per the directive issued by the ICAI. c) Gear Ltd is engaged in manufacturing supply of gear boxes to Indian Automobile Ltd. As per terms of supply, full price of the goods are not released by Indian Automobile Ltd. But 10 % thereof is retained and paid after one year, if there is satisfactory performance of the parts supplied. Gear Ltd. Accounts for only 90% of the invoice value as sale at the time of supply and balance 10% is accounted as sale in the year of receipt of payment. d) Fire Ltd. purchased equipment for its power plant from Urja Ltd. during the year 2006-07 at a cost of Rs.100 lakhs out of this they paid only 90% and 10% was to be paid after one year on satisfactory performance of the equipment. During the financial year 2007-08, Urja Ltd. waived of the balance 10% amount which was credited to profit and loss account by Fire Ltd. as discount received. 2) Answer the following: 16M K Ltd. and L Ltd. amalgamate to form a new company LK Ltd. The financial position of these two companies on the date of amalgamation was as under: IPCC _ Nov 2015_ Guess Question Papers 18

No.1 for CA/CWA & MEC/CEC MASTER MINDS 1 2 3 1 2 a b a a a a b c d (i) (ii) Note to Accounts: Name of the Companies : k Ltd and L Ltd. Balance Sheet as at: Particulars Notes No. K ( Rs.) L Ltd ( Rs.) 1 2 3 4 EQUITY AND LIABILITIES: Shareholder s funds Share capital Reserves and Surplus Non-current liabilities Long term borrowings 5% Debentures Secured loan Current liabilities Trade Payable (Creditors) TOTAL ASSETS Non-current assets Fixed assets Tangible assets In tangible assets Current Assets Inventories (Stock) Trade receivables (Debtors) Cash and cash equivalents Other current assets TOTAL Particulars 1. Share capital Equity Shares of Rs.100 each 7% Preference Share of Rs.100 each 2. Reserves and Surplus General Reserve Profit and Loss A/c 3. Tangible Assets Land & Building Plant & Machinery Furniture & Fittings 4. In Tangible Assets Goodwill 5. Cash and cash equivalents Cash at Bank Cash in hand 6. Other current assets Preliminary Exp. The terms of amalgamation are as under: (A) a. The assumption of liabilities of both the Companies IPCC _Nov 2015_ Guess Question Papers 19 5 6 1 2 3 4 12,00,000 4,31,375 2,00,000-1,00,000 19,31,375 11,30000 80,000 2,25,000 2,75,000 1,61,375 60,000 19,31,375 K Ltd ( Rs.) 8,00,000 4,00,000-4,31,375 4,50,000 6,20,000 60,000 80,000 1,20,000 41,375 60,000 6,00,000 1,97,175-2,00,000 2,10,000 12,07,175 8,20,000-1,40,000 1,75,000 72,175-12,07,175 L Ltd ( Rs.) 3,00,000 3,00,000 1,00,000 97,175 3,00,000 5,00,000 20,000-55,000 17,175 - b. Issue of 5 Preference shares of Rs.20 each in LK Ltd @ Rs.18 paid up at premium of Rs.4 per share for each preference share held in both the Companies.

Ph: 98851 25025/26 www.mastermindsindia.com c. Issue of 6 Equity shares of Rs.20 each in LK Ltd. @ Rs.18 paid up at a premium of Rs.4 per share for each equity share held in both the Companies. In addition necessary cash should be paid to the Equity Shareholders of both the Companies as is required to adjust the rights of shareholders of both the companies in accordance with the intrinsic value of the shares of both the companies. d. Issue of such amount of fully paid 6% debentures in LK Ltd. as is sufficient to discharge the 5% debentures in K Ltd at a discount of 5% after takeover. (B) a. The assets and liabilities are to be taken at book values stock and debtors for which provisions at 2% and 2 ½ % respectively to be raised. b. The sundry debtors of K Ltd. included Rs.20,000 due from L Ltd. (C) The LK Ltd is to issue 15,000 new equity shares of Rs.20 each, Rs.18 paid up at premium of Rs.4 per shares so as to have sufficient working capital. Prepare ledger accounts in the books of K Ltd. and L Ltd. to close their books. 3) Answer the following: a) 8M (i) On 1.1.2011 Shaan Ltd. purchased a machine on hire purchase basis. The terms of agreement provided for 40% as cash down payment and the balance in three installments of Rs. 1,63,000 on 31.12.2012, Rs. 1,20,000 on 31.12.2013 and Rs. 1,10,000 on 31.12.2014. The rate of interest charged by the vendor is 10% p.a. compound annually. You are required to calculate the cash Price and periodic interest charged by hire vendor. (ii) On 1.1.2011 Beeta Ltd. purchased a machine from Yama Ltd. on hire purchase basis. The terms of agreement provided for 40% as cash down payment and the balance in three installment of Rs. 1,30,000 on 31.12.2011, Rs. 1,42,000 on 31.12.2013 and Rs. 1,10,000 on 31.12.2014. The rate of interest charged by the vendor is 10% p.a. compounded annually. You are required to calculate the cash price when 2 nd installment is payable after two years. b) The following is the Balance Sheet of a concern on 31 st March, 2010: 8M Liabilities Rs. Assets Rs. 10,00,000 1,40,000 60,000 Capital Creditors (Trade) Profit & Loss A/c 12,00,000 Fixed Assets Stock Debtors Cash & Bank 4,00,000 3,00,000 1,50,000 3,50,000 12,00,000 The management estimates the purchases and sales for the year ended 31 st March, 2011 as under: Particulars Upto 28.2.2011 ( Rs.) March 2011 ( Rs.) Purchases 14,10,000 1,10,000 Sales 19,20,000 2,00,000 It was decided to invest Rs.1,00,000 in purchases of fixed assets, which are depreciated @ 10% on cost. The time lag for payment to Trade Creditors for purchase and receipt from Sales is one month. The business earns a gross profit of 30% on turnover. The expenses against gross profit amount to 10% of the turnover. The amount of depreciation is not included in these expenses. Draft a Balance Sheet as at 31 st March, 2011 assuming that creditors are all Trade Creditors for purchases and debtors for sales and there is no other item of current assets and liabilities apart from stock and cash and bank balances. 4) Answer the following: 16M Q, R are three doctors who are running a Polyclinic. Their capital on 31 st March, 2009 was Rs.1,00,000 each. They agreed to admit X, Y and Z as partners w.e.f. 1st April 2009. The terms for sharing profits & losses were as follows: IPCC _ Nov 2015_ Guess Question Papers 20

No.1 for CA/CWA & MEC/CEC MASTER MINDS (a) 70% of the visiting fee is to go to the specialist concerned. (b) 50% of the chamber fee will be payable to the individual specialist. (c) 40% of operation fee and fee for pathological reports, X-rays and ECG will accrue in favour of the doctor concerned. (d) Balance of profit or loss is shared equally. (e) All the partners are entitled for 6% interest on capital employed. They further agreed that: i. X, Y and Z brought in Rs.20,000 each as goodwill. Goodwill is shared by the existing partners equally. ii. X, Y and Z brought in Rs.50,000 each as capital. Each of the original partners also contributed Rs.50,000 by way of capital. The receipts for the year after admission of new partners were: Name of Doctors P Q R X Y Z Particulars General Physician Gynecologist Cardiologist Child Specialist Pathologist Radiologist Visiting Fees ( Rs.) 1,50,000 25,000-1,00,000 - - Chambers Fees ( Rs.) 2,00,000 1,75,000 1,00,000 1,50,000-40,000 Fees for reports, operation etc. ( Rs.) - 1,00,000 75,000-1,00,000 2,00,000 Total 2,75,000 6,65,000 4,75,000 Expenses for the year were as follows: Particulars Medicines, injections and other consumables Printing and stationery Telephone expenses Rent Power and light Nurses salary Attendants wages Total Depreciation: X-Ray machines ECG equipments Furniture Surgical equipments Total Depreciation Rs. 1,00,000 5,000 5,000 42,000 10,000 20,000 20,000 2,02,000 15,000 5,000 5,000 5,000 30,000 You are requested to: i. Pass necessary journal entries on admission of partners. ii. Prepare the Profit and Loss Account of the polyclinic for the year ended 31 st March, 2010. iii. Prepare capital accounts of all the partners at the end of the financial year 2009-10. Also show the distribution of profit among partners. 5) Answer the following: a) Smart Investments made the following investments in the year 2013-14: 8M 12% State Government Bonds having face value Rs. 100 IPCC _Nov 2015_ Guess Question Papers 21

Ph: 98851 25025/26 www.mastermindsindia.com Interest on the bonds is received on 30th June and 31st Dec. each year. Prepare Investment Accounts in the books of Smart Investments. Assume that the average cost method is followed. b) The following is the Trial Balance of Subhash Limited as on 31.3.2012: 8M (Figures in 000) Land at cost Plant & Machinery at cost Debtors Stock (31.3.2012) Bank Adjusted Purchases Factory Expenses Administration Expenses Selling Expenses Debenture Interest Interim Dividend Paid Debit Rs. Credit Rs. 110 385 48 43 10 160 30 15 15 10 9 835 Equity Capital (Shares of Rs 10 each) 10% Debentures General Reserve Profit & Loss A/c Securities Premium Sales Creditors Provision for Depreciation Suspense account Additional Information: (a) On 31.3.2012, the company issued bonus shares to the shareholders on 1 : 3 basis. No entry relating to this has yet been made. (b) The authorised share capital of the company is 25,000 shares of Rs.10 each. (c) The company on the advice of independent valuer wish to revalue the land at Rs.1,80,000. (d) Proposed final dividend 10%. IPCC _ Nov 2015_ Guess Question Papers 22 150 100 65 36 20 350 26 86 2 835