T1-CAC&MA-EP-J12

BRIGHT ACADEMY OF EXCELLENCE Company Accounts & Cost & Management Accounting
CS Inter Test No.1 Answer the following Time 1 hour Max. Marks: 50

Q 1.A) State True or False with reasons if any (7 marks) a) The valuation of inventory is higher of purchase cost or net realizable. b) EPS is financial ratio which gives the information regarding earnings available to each equity share. c) The impairment of assets is also applicable to inventories, assets arising from construction contracts and financial investments and deferred tax. d) As per table A applicability, the calls must be made on uniform basis on all shares within the same class. e) As per table A, the interest on Call in arrears to be not more than 5% f) At each balance sheet date reporting should be made for foreign currency monetary items using the opening rate, unless otherwise specified. g) The profit if any on adjustment of sale of lien on shares to be retained by the company Q 1 B) Discuss the scope of Accounting Standards (3 marks)

Q 2.A) On 1st January 2009, Java Ltd issued 10,000 equity shares of Rs.10 payable as follows: (6 marks) On application Rs.3.00, on allotment Rs.2.00, on First call Rs.2.00 (payable after 2 months from the date of allotment) and Final Call Rs.3.00 (payable after 2 months from the date of 1st call) The applications and allotments were made on 10,000 shares. The calls were duly made on 1st March 2009 and 1st May 2009 respectively. One shareholder X who holds 2000 shares paid the first call money along with final call and another share holder Y holding 1500 shares paid the final call money along with first call. The call in arrears to be calculated at 5% and Calls-in advance to be calculated at 6%. Show the calculations/workings and pass the necessary Journal entries for the Interest. Q 2 B) Fill in the blanks (4 marks)

i) ASB stand for----------------ii) ASrecommends that listed companies and other industrial commercial and business enterprises will have to provide to their shareholders and public in general, as the case may be, cash flow statement along with the balance sheet and income statement iii) As per AS 7, the objective of this accounting standard is to prescribe the accounting treatment of revenue and costs associated with ---------------------iv)As per AS 21, consolidated financial statements normally include ---------------------Q 3) M/s R limited purchased the Business of M/s M Limited for Rs.5,70,000 payable in fully paid shares. M/s R Limited allotted equity shares of Rs.10 each fully paid in consideration of business takeover to M/s M Ltd. Show the necessary Journal entries in the books of R Limited for the following situations. (6 marks) a) Such shares are issued at par, b) Such shares are issued at premium of 25% c) Such shares are issued at a discount of 10%

3 B) What do you mean forfeiture of shares and what is its impact on the shareholders (4 marks) Q4) Give the Journal entries for the following (10 marks)

i) A Ltd forfeited 500 shares of Rs.10 each fully called up for non payment of final call money of Rs.4/- per share. These were subsequently reissued for Rs.8/- per share ii) S Ltd forfeited 300 shares of Rs.10 each, Rs. 7 per share being called up on which the share holder paid application and allotment money of Rs.5 per share, but did not pay the first call money of Rs.2/-per share. Of these shares 200 shares were subsequently reissued as fully paid up for Rs 8 per share. iii)B Ltd forfeited 100 shares of Rs.10 each, Rs.8 per share being called up, which were issued at a discount of 10% for non-payment of call money of Rs.3 per share. Of these forfeited shares 75 shares were subsequently re-issued by the company at Rs.5 per share, Rs. 8 paid-up. Q 5) M/s Om limited issued prospectus offering 2,00,000 equity shares of Rs.10 each on the following terms: On application Rs.1/-, On allotment Rs.3/-(including premium of Rs.2), on first call (three months after allotment) Rs.4/- and on final call (three months after first call) Rs.4/Subscriptions were received for 3,17,000 shares on 23rd April 2008 and allotment were made on 30th April 2008, as under: i) Allotment in full (two applicants paid in full Shares allotted on allotment in respect of 4000 shares each ) 38,000 ii) Applicants of shares who applied for 240,000 shares 1,60,000 iii) Applicants of 8000 shares applied for 2,000 Balance share applications for the remaining were rejected, and money refunded. All the monies were received on due dates exception to the final call on100 shares. These were forfeited on 1st November 2008 and reissued to Mr. A on the same date for payment of Rs.9.00 per share. The company adopted Table A as its articles. Show the necessary journal entries and cash book, assuming the company paid interest the interest due on 30th October 2008 (10 marks)