Appendix Scanner CS Executive M-I P-2 Old

7/27/2019 Appendix Scanner CS Executive M-I P-2 Old

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Free of Cost ISBN : 978-93-5034-614-3

SolvedScanner AppendixCS Executive Programme Module - I

(Solution upto Dec. - 2012 and Question of June - 2013 Included)

Paper - 2 : Company Accounts, Cost and Management Accounting

Paper - 2A : Company Accounts

Chapter - 2 : Accounting for Share Capital

2012 - Dec [2] (a)

Amt in` Amt in`

(i) Bank Dr.

Profit & Loss a/c Dr.

To Investment

(Sale of Investment & Loss of ` 5,000/-)

40,000

5,000

45,000

(ii) Equity share capital a/c Dr.

To Calls in A rrears a/c

To Equity Share Forfeited a/c

(Forfeiture of 150 equity Shares for non-

payment of Calls-in-arrears)

1,200

300

900

(iii) Bank

To 14% Debentures a/c

To Securities Premium a/c

(Issue of 500, 14% debentures of ` 100 each at

a premium of 5%)

52,500

50,000

2,500

(iv) (a) Bank Dr.

To Calls in Arrear

(calls in arrears received from holders of 200,

11% preference shares)

4,000

4,000


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Solved Scanner Appendix CS Executive Programme Module - I Paper - 2 2

(b) 11% Preference Share Capita l a/c Dr.

To Calls in A rrears a/c

To 11% Preference Share Forfeited a/c

(Forfeiture of 50, 11% Preference Shares for

non-payment of Cal ls-in-arrears)

5,000

1,000

4,000

(v) (a) Bank Dr.

11% Preference Share Forfeited a/c Dr.

To 11% Preference Share Capital a/c

(Re-issue of forfeited preference shares @ 50

per shares)

2,500

2,500

5,000

(v) (b) Bank Dr.

To Equity Share Capital

To Securities Premium a/c

(Re-issue of Forfeited Preference Shares @ 50

per shares)

1,800

1,200

600

(vi) 11% Preferen ce S hare Forfeited a/c Dr.

Equity Share Forfeited a/c Dr.

To Capital Reserve a/c

(Balances of share forfeited a/c transferred to

capital reserve a/c)

2,500

900

3,400

(vii) General Reserve a/c Dr.

Profit and Loss a/c Dr.

To Capital Redemption Reserve a/c

(Redemption of preference share out of free

reserve)

50,000

50,000

1,00,000

(viii) 11% Preference Share Capital a/c Dr.

To Bank

(Amount due on redemption paid to preference

shareholders)

1,00,000

1,00,000

Chapter - 3 : Issue and Redemption of Debentures

2012 - Dec [3] (b)

(i) Bank Dr. 73,500

Loss on issue of debentures Account Dr. 7,000

To 12% debentures Account 70,000

To premium on issue of debentures account 3,500To premium on redemption of debentures account 7,000

(Issue of ` 70,000, 12% debenture of ` 100

each at a premium of 5% and redeemable

at a premium of 10%)


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(ii) Fortune Limited

Balance Sheet

I. Equities and Liabilities

Reserve and Surplus Amount in`

Securities premium 3,500

Less:Loss on issue of debentures (7,000) (3500)

Non- Current Liabilities

12% debenture 70,000

Debenture redemption premium 7,000

Total 73,500

ASSETS

Current Assets

Balance with Bank 73,500

TOTAL 73,500

2012 - Dec [4] (c)

Cum interest: The price quoted includes the interest for the expired period.

Ex-interest: The price does not include the interest for the expired period.

Chapter - 4 : Underwriting of Issues and Acquisition of Business

2012 - Dec [2] (b)

Statement of Underwriters liability

(Firm underwriting shares are treated as marked)

Particulars Liability of underwriters

X Y Z Total

Gross Liability 30,000 15,000 5,000 50,000

Less : Marked Applications 21,000 12,000 5,000 38,000

Balance 9,000 3,000 Nil 12,000

Less : Unmarked application in the

ratio of gross liability 4,200 2,100 700 7,000

Balance 4,800 900 (700) 5,000

Particulars Liability of underwriters

X Y Z Total

Credit of Z in ration of Gross Liability (467) (233) 700

Underwriters liability 4,333 667 0 5,000

Add : Firm Applications 5,000 2,000 1,000 8,000

Total liability 9,333 2,667 1,000 13,000


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Total Application 45,000

Less : Marked Application 30,000

Firm Underwriting 8,000 38,000

Unmarked Application 7,000

Journal Entries Amt in`

(i) X Dr. 5,59,980

Y Dr. 1,60,020

Z Dr. 60,000

To Share Capital 6,50,000To Securities Premium 1,30,000

(Shares allotted to underwriters in

ratio of their liability)

(ii) Underwriting Commission

Account Dr. 1,25,000

To X 75,000

To Y 37,500

To Z 12,500

(Underwriting commission due to

underwriters. Rate assumed as5% of face value of shares)

(iii) Bank Account Dr. 6,55,000

To X 4,84,980

To Y 1,22,520

To Z 47,500

(Balance payment received from

underwriters)

Entries for commission that underwriting commission is 5% of the value at which

shares are issued and premium is considered in calculation of underwriting

commission, then journal entry would be:(iv) Underwr i ting Commiss ion

Account Dr. 1,50,000

To X 90,000


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(ii) Underwriting Commission

Account

Dr. 1,25,000

To X 75,000

To Y 37,500

To Z 12,500

(Underwriting commission due to

underwriters. Rate assumed as

5% of face value of shares)

(iii) Bank Account Dr. 6,55,000

To X 5,05,020

To Y 1,02,480To Z 47,500

(Balance payment received from

underwriters)

Chapter - 5 : Final Accounts of Joint Stock Companies

2012 - Dec [4] (b)

Please refer 2001- Dec [2] (a) on page no. 177

Chapter - 6 : Consolidation of Accounts

2012 - Dec [3] (a)

Working notes:

1. Minority interest = 20% (as 80% Shares held by H Ltd.)

Pre acquisition period i.e. from 1st April, 2011 to 30 th September, 2011 = 6 MonthsPost acquisition period i.e. from 1st October, 2011 to 31st March, 2012 = 6 Months

Unsold goods in H limited which was purchased from S Ltd. = ` = `5,000

Unrealized profit = ` 5,000* 25/125 = ` 1,000

2. Distribution of Capital Profit

General & reserve = ` 80,000

Profit & Loss (1 - 4 - 2011) = ` 30,000

Pre acquisition profit in current year profit

(` 60,000 - ` 30,000) = ` 15,000

Total = ` 1,25,000

Share of H Limited (80%) = ` 1,25,000 = ` 1,00,000

Share of Minority shareholders = ` 1,25,000 = ` 25,000


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3. Cost of control/capital reserve

Amount paid for 80% share = ` 3,40,000

Less:Paid up value of shares held by H Ltd. = ` 1,60,000

Shares in Capital Profit = ` 1,00,000

Goodwill = ` 80,000

4. Share of H Ltd in revenue profit of S Ltd.

Profit from 01-4-2011 to 31st March, 2012 = ` 60,000 - ` 30,000

= ` 30,000

Profit from 01-10-2012 to 31st March, 2012 =` 30,000

= ` 15,000

Share of H Limited = ` 15,000

= ` 12,000

Share of Minority shareholders = ` 3,000 (` 15,000 - ` 12,000)

5. Minority Interest

Share capital 20% of ` 20,000 = ` 40,000

Share in capital profit = ` 25,000

Share in revenue profit = ` 3,000

Total = ` 68,000

Consolidated Balance Sheet of H Ltd. and its subsidiary S Ltd

as on 31st March, 2012

EQUITY AND LIABILITIESAmount in`

(1) Shareholders funds

(a) Share Capital;

60,000 Equity shares of ` 10 each 6,00,000

(b) Reserve and Surplus

a. General reserve 3,40,000

b. Profit and Loss A/c 1,00,000

Share in S Ltd.s revenue profit 12,000

1,12,000

Less:Unrealized profit 1,000 1,11,000


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(2) Current Liabilit ies

Trade payable

a. H Ltd. 70,000

b. S Ltd 35,000

1,05,000

Less:Mutual Owings 10,000 95,000

Minority Interest 68,000

TOTAL 12,14,000

ASSETS

1. Non-current assets

a. Fixed Asse tsTangible Assets:

Machinery

1. H Ltd. 3,90,000

2. S Ltd. 1,35,000 5,25,000

Furniture

3. H Ltd. 80,000

4. S Ltd. 40,000 1,20,000 6,45,000

Non-Tangible Assets:

Goodwill 80,000

2. Current assets

(a) Stock

i. H Ltd. 1,80,000ii. S Ltd. 1,20,000

3,00,000

Less:unrealized profit 1,000 2,99,000

(b) Trade receivables

i. H Ltd. 50,000

ii. S Ltd. 30,000

80,000

Less:Mutual Owings 10,000 70,000

(c) Balance with bank

i. H Ltd. 70,000

ii. S Ltd. 50,000 1,20,000

TOTAL 12,14,000


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Chapter - 7 : Valuation of Shares and Intangible Assets

2012 - Dec [4] (a)

(i) (A) Value of share as per net assets method

(B) Calculation of net assets `

Goodwill 1,00,000

Freehold property at market value 1,80,000

Plant and machinery 80,000

Stock 3,10,000

Trade receivables 2,13,000

Bank Balance 1,07,000

Cash in hand 1,700

9,91,700Less:Current Liabilities

Proposed divided 34,000

Trade payables 93,700

Income Tax payable 11,500

Provision for tax 82,500 2,21,700

Net Assets 7,70,000

Intrinsic value per share =

= `

= ` 25.67 Ans.

(C) Value of per share as per yield method:Average profit on weighted average basis

year Profit Weight Product

2010 1,38,000 1 1,38,000

2011 1,83,000 2 3,66,000

2012 1,97,000 3 5,91,000

6 10,95,000

Weighted average profit (Before tax) = `

= ` 1,82,500

Less:Income tax @ 50% = ` 91,250

Profit after Tax (PAT) = ` 91,250

Less:transfer to general reserve @ 20% = ` 18,250

Expected profit available for equity Share holders = ` 73,000


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Calculation of expected dividend yield

Expected Yield Rate =

=

= ` 24.33

Calculation of Yield Value per Share

Value Per Shares = Paid up value per share

= ` 10

= ` 16.22 ans.

(ii) Fair value Per Share =

= `

= ` 20.95

Chapter - 8 : Objective Questions

2012 - Dec [1] {C} (a)

(a) (i) This Statement is false: When a company which has already issued shares

wants to raise capital through the further issue of shares. it is under a legal

obligation to first offer the fresh shares to its existing shareholders unless, the

company has resolved otherwise by a special resolutions. So right share arenot issued to promoter for their services.

(ii) This Statement is false: Both underwriting commission i.e. brokerage can be

paid to an individual as underwriting commission is paid to an underwriter in

addition to brokerage for taking the responsibility to get ful l subscription to the

shares and debentures of the company.

(iii) This Statements is True: The company shall create debentures Redemption

Reserve equivalent to at-least 50% of the amount of debentures before

starting the redemption of debentures.

(iv) This Statement is false: Preliminary expenses is an example of fictitious

asset and not of an intangible assets

(v) This Statement is false: interim Dividend thus paid is an appropriation of

profit and not a charge against the profit.

(b) (i) (c) 7 years.

(ii) (c) The amount received on forfeited shares,

(iii) (a) Compulsory,


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( iv) (a) Issue of fresh equity shares

(v) (b) Capital reserve.

(c) (i) Managerial remuneration

(ii) For consideration other than cash.

(iii) Impairment of assets

(iv) International Accounting Standards Board.

(v) Non current assets.

Paper - 2B : Cost and Management Accounts

Chapter - 1 : Introduction to Cost and Management Accounting

2012 - Dec [8] (c)Please refer 2005 - June [7 ] (a) on page no. 421

Chapter - 2 : Material Cost

2012 - Dec [7] (b)

(b)(i) Optimum bearing batch size=

Annual Production = 24,000 bearings

Cost per Production per set up = ` 324

Inventory holding cost per unit per annum = 10 12 = ` 1.20 per unit p.a.

Optimum run size =

= 3600 unit

(ii) Calculation of inventory set up cost and holding cost at two different run size

Run Size 6000 units

Amount in`

3600 units

Amount in`

Annual set up costs 1,296

Annual set up costs 2,160

Annual inventory holding cost 3,600


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Annual inventory holding cost 2,160

4,896 4,320

Extra cost incurred by company on using run size of 6000 per bearing

= ` 4896 - 4320

= ` 576

(iii) Minimum Inventory Holding Cost: ` 2,160 i.e., carrying cost of EOQ.

Chapter - 5 : Method of Costing

2012 - Dec [7] (a)

Answer:

(i) S V Construction Ltd.

Contract Account

For the year ended 30th September, 2012

Particulars ` Particulars `

To Material 3,36,000 By work in Progress

To Wages paid: 3,40,000 Work Certified 7,50,000

Add: Accrued 2,800 3,42,800 Work Uncertified 14,000 7,64,000

To Direct Expenses paid 8,000 By Plant at site 48,000

Add: Accrued 1,200 9,200 By Materials at site 4,000

To Plant Purchased 60,000

To General Materials 32,000

To P&L Account 19,200To Work in Progress (Reserve) 16,800

8,16,000 8,16,000

Working Notes:

Calculation of work certified

Cash received is ` 6,00,000 representing 80% of the work certified, hence the

value of the work certified would be ` 7,50,000 (6,00,000 )

Calculation of Plant at site as on 30-09-2012

Value of Plant Purchased ` 60,000

Annual Depreciation ` 12,000 (Scrap value is given nil and working life

5 yrs)Value as on 30-09-2012 ` 48,000

(ii) Total profit made as on 30-09-2012 is ` 36,000. Since the contract value is ` 12

lakh and value of work certified is ` 7.5 lakhs which is more than of the contract


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price. So 2/3rd of profit made to date as reduced on cash basis shall been taken

to the P&L Account.

Profit to be taken to Profit and Loss Account

= Profit made upto date

= ` 19,200

Chapter - 6 : Budgetary Control

2012 - Dec [6] (b)

Please refer 2011 - Dec [7] (c) on page no. 500

Chapter - 7 : Marginal Costing

2012 - Dec [8] (b)

Since in the given question, machine hours availability is a limiting factor so the priorityof machine will depend on contribution per hour.

Calculation of contribution per machine hour

Particular Machine A () Machine B ()

Selling price per unit 9 9

Less:Marginal cost 5 6

Contribution per unit 4 3

Output per hour 100 units 150 units

Contribution per hour 400 450

Since per hour contribution is higher in case of machine B so machine B is to be used

for the production of Product-X

Chapter - 8 : Analysis & Interpretation of Financial Statements

2012 - Dec [6] (a)

1. Working Note No. 1

Current Ratio = 2

Working Capital = ` 4,00,000

Since Current Ratio =

2 =

2 Current Liabi li ties = Current Assets

As Working Capital = Current Assets - Current Liabilities

`4,00,000 = 2 Current Liabilities - Current Liabilities

` 4,00,000 = Current Liability

Current Assets = 2 Current Liabilities

= 2 ` 4,00,000

= ` 8,00,000


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Capital Block to Current Assets = 3.2

Capital Block = Share Capital + Debentures + Net Profit +

Reserves

Capital Block = Current Assets

= ` 8,00,000

= ` 12,00,000

Total Liabilities = Capital Block + Current Liabilities

= ` 12,00,000 + ` 4,00,000 = ` 16,00,000

Total Assets = Total Liabi lities =`

16,00,000Fixed Assets = Total Assets - Current Assets

= ` 16,00,000 - ` 8,00,000

= ` 8,00,000

Fixed Assets to turnover = 1:3

Hence, Sales = ` 8,00,000 3 = ` 24,00,000


Stock Velocity = 2 months

Inventory Turnover ratio = 12/2

= 6

Gross Profit Ratio = 25% on Sales

Hence, Gross Profit = ` 24,00,000 25% = ` 6,00,000

Cost of Goods Sold = Sales - Gross Profit= ` 18,00,000

Average Stock =

= `

= ` 3,00,000


Creditors Velocity = 2 months

Creditor Velocity in Months = Creditors

2 = Creditors

Since, opening stock is not given; cost of goods sold is taken as purchases and it

is also assumed that purchases made at credit only


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Creditors = `

= ` 3,00,000


Ratio of cash sales to credit sales = 1:2

Total Sales = ` 24,00,000 (refer working note number 3)

So Credit Sales = ` 24,00,000

= ` 16,00,000

Debtors Velocity = 3 months

Debtors Velocity in months = Debtors

3 = Debtors

Debtor = ` 16,00,000

= ` 4,00,000


Net profit is 10% of Turnover

Since sales are ` 24,00,000 net profit is ` 24,00,000 10% = ` 2,40,000

Reserve is 2 % of Turnover

Reserve = ` 24,00,000 2.5% = ` 60,000


Capital Block = Share Capital + Debentures + Net Profit + Reserves

Or ` 12,00,000 = Share Capital + Debentures + ` 24,0000 + ` 60,000

Or Share Capital + Debentures = ` (12,00,000 - 2,40,000 - 60,000)

= ` 9,00,000


Debentures/Share Capital Ratio = 1:2

Hence, Debentures = 9,00,000 1/3 = ` 3,00,000

Share Capital = 9,00,000 2/3 = ` 6,00,000

Balance Sheet of Moon Ltd.

I. EQUITIES AND LIABILITIES `

1. Shareholders Funds

(a) Share Capital 6,00,000

(b) Reserves and Surplus:

I. Reserves 60,000

II. P rofit & Loss Account 2,40,000

2. Non-Current Liabilities

Debentures 3,00,000


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3. Current Liabilit ies

Creditors 3,00,000

Others Liabilities 1,00,000

TOTAL 16,00,000

II. ASSETS `

1. Fixed Assets 8,00,000

2. Current Assets

Stock 3,00,000

Debtors 4,00,000

Cash & Bank Balance 1,00,000

(Balancing Figure)

TOTAL 16,00,000

Chapter - 9 : Cash Flow Statement

2012 - Dec [8] (a)

Working Note No. 1

Plant and Machinery Account

Particulars Amount

()

Particulars Amount

()

To Balance B/d

To Profit and Loss A/c Profit on

sale (` 35,000 - ` 20,000)

5,00,000

15,000

By Depreciation (@ 25% on

opening balance)

By Bank (Sale)

1,25,000

35,000

To Bank (Balancing figure)

(Purchase of machinery)

3,45,000 By Balance C/d 7,00,000

8,60,000 8,60,000

Working Note No.2

Provision for Taxation Account

Particulars Amount () Particulars Amount ()

To Bank A/c

(Tax payment during the current

year)

50,000 By Balance B/d

By Profit & Loss A/c

(Balancing figure)

70,000

80,000

To Balance C/d 1,00,000

1,50,000 1,50,000


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Working Note No. 3

Profit and loss A/c

Particulars Amount () Particulars Amount ()

To Depreciation A/c 1,25,000 By Balance B/d 60,000

To Provision for Taxation A/c 80,000 By Plant and Machinery A/c

(Profit on sale of machinery)

15,000

To Balance C/d 1,00,000 By Operating Profit 2,30,000

3,05,000 3,05,000

Cash Flow Statement of Great Limited

for the year ended 31st March, 2012

Particulars ` `

(i) Cash Flow from Operating Activities :

Net Profit before Extraordinary items and

appropriation of profit

2,30,000

adjustment for :

Transfer to General Reserve 50,000

Proposed dividend 2,00,000

Operating profits before working capital changes 4,80,000

Increase in Stock (-) (2,00,000)

Decrease in Debtors (+) 2,00,000

Decrease in creditors (-) (1,20,000)3,60,000

Income-tax paid (-) 50,000 3,10,000

(ii) Cash Flow from Investing Activities :

Purchase of Fixed Assets (3,45,000)

Expenses on Building (2,00,000)

Increase in investments (1,00,000)

Sale of old machine 35,000 (6,10,000)

(iii) Cash Flow from Financing Activities :

Income in Share Capital (presumed fresh capital) 2,00,000

Issue of Debentures 2,00,000Dividend paid (1,00,000) 3,00,000


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Particulars () ()

Net Increase in cash or cash equivalent (I+II+III) NIL

Cash and cash equivalents at the beginning of the financial

year

2,00,000

Cash and cash equivalents at the end of the financial year 2,00,000


2012 - Dec [5] {C} (a)

(a) (i) This Statement is True.

A statement of cash flow reports the inflows and outflows of cash and its

equivalents only of an organisation during a particular period. Hence it is

prepared on cash basis and not on accrual accounting concepts-

(ii) This Statement is True.

For the determination of cost volume-profit relationship, marginal cost, break

even point analysis, profit volume ratio and key factor are considered. Hence

cost volume profit relationship is more comprehensive term.

(iii) This Statement is False.

Long term budgets are the budgets which are prepared for periods longer than

a year. They are prepared for those activities, the trend in which is difficult to

fore see over longer periods.

(iv) This Statement is True.

Direct costs are not necessarily the same as variable cost direct costs

comprises of di rect material cost ,direct labour and direct expenses, variablecost is made up of direct materials, direct wages, direct expenses and variable

overheads.

(v) This Statement is False.

The ABC analysis is a selective inventory control which aims at concentrating

control mainly on cost basis.

(b) (i) (b) Transfer to costing profit and loss account,

(ii) (b) Attained,

(iii) (c) Absorption costing,

(iv) (c) 12%

(v) (c) Halsey premium plans

(c) (i) Overheads,

(ii) Technique(iii) Conventional Budgeting

(iv) Decreases

(v) LIFO


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Question Paper of December - 2013

Paper - 2A : Company Accounts

Chapter - 2 : Accounting for Share Capital

2013 - June [2] (c) Write a note on buy-back of shares. (4 marks)

2013 - June [3] (b) Shreya Ltd. had an issue of 1,000 12% redeemable preference

shares of ` 100 each, repayable at a premium of 10%. These shares are to be

redeemed now out of the accumulated reserves, which are more than the necessary

sum required for redemption. Show the necessary entries in the books of the company,

assuming that the premium on redemption of shares has to be written off against the

companys securities premium reserve account. (6 marks)

2013 - June [4] (a) A limited company issued a prospectus inviting applications for

30,000 shares of ` 10 each at a premium of ` 2 per share. The amount was payable as

follows:

`

On application 2

On allotment 5 (including premium)

On first call 3

On second and final call 2

Applications were received for 45,000 shares and allotment was made on pro-rata basis

to the applicants of 36,000 shares. Money overpaid on appl ications was employed on

account of sum due on al lotment.

Ramesh, to whom 600 shares were allotted, failed to pay the allotment money and on

his subsequent failure to pay the first call, his shares were forfeited. Mohan, the holderof 900 shares failed to pay the two calls and his shares were forfeited after the second

and final call.

Of the shares forfeited, 1,200 shares were sold to Krishna credited as fu lly paid for ` 9

per share, the whole of Rameshs share being included.

Show journal and cash book entries and prepare the balance sheet. (12 marks)

Chapter - 4 : Underwriting of Issues and Acquisition of Business

2013 - June [2] (b) KBC Ltd. issued 50,000 equity shares. The whole of the issue was

underwritten as follows:

Underwriter K : 40%

Underwriter B : 30%

Underwriter C : 30%

Applications for 40,000 shares were received in all, out of which applications for 10,000shares had the stamp of Underwriter - K; those for 5,000 shares that of Underwriter- B;

and those for 10,000 shares for Underwriter - C.

The remaining applications for 15,000 shares did not bear any stamp.

Determine the liability of the underwriters. (5 marks)


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2013 - June [4] (b) Explain the nature of profit or loss prior to incorporation. How is it

treated in the books of accounts? (3 marks)

Chapter - 6 : Consolidation of Accounts

2013 - June [3] (a) The following are the balance sheets of H Ltd. and its subsidiary

S Ltd. as on 31st March, 2012:

Equity and Liabilities H Ltd. S Ltd.

() ()

Shareholders funds:

Share capital

Shares of ` 100 each fully paid 5,00,000 2,00,000

Reserves and surplus:

General reserve 1,00,000

Profit and loss account 80,000 () 1,00,000

Non-current liabilities:

6% Debentures 1,00,000

Current liabilities:

Trade payables 75,000 45,000

7,55,000 2,45,000

Assets

Non-current assets:

Fixed assets 3,50,000 1,50,000

Non-current investments:

6% Debentures in S Ltd. (acquired at cost) 60,000

1,500 Shares in S Ltd. at ` 80 each 1,20,000

Current assets:

Inventories 90,000 40,000

Trade receivables 60,000 30,000

Cash 75,000 25,000

7,55,000 2,45,000

H Ltd. acquired the shares on 1st August, 2011. The profit and loss account of S Ltd.

showed a debit balance of ` 1,50,000 on 1st April, 2011. During June, 2011 goods of S

Ltd. costing ` 6,000 were destroyed by fire against which insurer paid only ` 2,000.

Trade payables of S Ltd. include ` 20,000 for goods supplied by H Ltd. on which H Ltd.

made a profit of ` 2,000. Half of the goods were still in stock on 31st March, 2012.

Prepare a consolidated balance sheet and show the complete working. (9 marks)


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Chapter - 7 : Valuation of Shares and Intangible Assets

2013 - June [2] (a) Calculate the value of one equity share from the following

information:

(i) 60,000 equity shares of ` 10 each, ` 7 paid-up.

(ii) ` 2,00,000, 10% preference shares of ` 100 each, fully paid-up.

(iii) Expected annual profits before tax ` 4,00,000.

(iv) Tax rate 35%.

(v) Transfer to general reserve 20% of profits every year.

(vi) Normal rate of return 20%. (6 marks)


2013 - June [1] {C} (a) State, with reasons in brief, whether the following statements

are true or false:(i) The existing equity shareholders are necessarily to accept the rights offer. (2)

(ii) Contingent liability in respect of a transaction between holding and wholly owned

subsidiary companies will not appear in the footnote of the consolidated balance

sheet. (6)

(iii) In case of inter-company unrealised profits included in unsold goods, minority

shareholders are not affected in any way. (6)

(iv) In case of inadequacy of profits, dividend can be paid out of capital reserve.

(5)

(v) Redemption of preference shares amounts to reduction in the capital of the

company. (2)

(2 marks each)

(b) Write the most appropriate answer from the given options in respect of the following:(i) Discount allowed on the re-issue of forfeited shares cannot exceed

(a) 10% of paid-up capital

(b) 10% of the capital re-issued

(c) The amount received on forfeited shares

(d) Capital reserve account. (2)

(ii) Sections 349 and 350 of the Companies Act, 1956 contain the provisions relating

to the manner of determination of net profit for the purpose of calculating the

(a) Disposal of net profit

(b) Managerial remuneration

(c) Fair value of assets

(d) Fair value of shares. (5)

(iii) As per Accounting Standard-28, an impairment loss should be recognisedwhenever the recoverable amount of an asset is less than its

(a) Original cost

(b) Opportunity cost


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(c) Carrying amount

(d) None of the above. (1)

(iv) When a company issues debentures at par or at a discount which are

redeemable at a premium, the premium payable on redemption of the

debentures is to be treated as

(a) Revenue loss

(b) Capital loss

(c) Deferred revenue expenditure


(v) Expenses incidental to the creation and floatation of a company are called

(a) Underwriting expenses

(b) Preliminary expenses(c) Trade expenses

(d) Establishment expenses. (4)

(1 mark each)

(c) Re-write the following sentences after filling-in the blank spaces with appropriate

word(s)/figure(s):

(i) Section 81 of the Companies Act, 1956, provides that where a public company

proposes to increase its subscribed capital at any time after the expiry of

__________year(s) of its formation or at any time after the expiry of __________

year(s) from the first allotment of shares whichever is earlier, it should satisfy

certain conditions. (2)

(ii) Preliminary expenses being of capital nature may be written-off against_______.

(4)(iii) Goodwill is an intangible asset, but is not a ________asset. (7)

(iv) Accumulated losses of the subsidiary company upto the date of acquisition of

shares by the holding company are called _________ losses. (6)

(v) International Accounting Standards are issued by the ________. (1)

(1 mark each)

Paper - 2B : Cost and Management Accounts

Chapter - 5 : Method of Costing

2013 - June [7] (b) Distinguish between production account and cost sheet.

(3 marks)

Chapter - 6 : Budgetary Control

2013 - June [8] (a) The following data are available in a manufacturing company for a

year period :


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(` in lakhs)

Fixed expenses :

Wages and salaries 9.50

Rent, rates and taxes 6.60

Depreciation 7.40

Sundry administrative expenses 6.50

Semi-variable expenses (at 50% capacity):

Maintenance and repairs 3.50

Indirect labour 7.90

Sales department salaries, etc. 3.80

Sundry administrative expenses 2.80

Variable expenses (at 50% of capacity)Materials 21.70

Labour 20.40

Other expenses 7.90

98.00

Assume that fixed expenses remain constant for all levels of production, semi-variable

expenses remain constant between 45% and 65% of capacity and increasing by 10%

between 65% and 80% capacity and by 20% between 80% and 100% capaci ty.

Sales at various levels are ! at 50% capacity : ` 100 lakh; at 60% capacity : ` 120 Lakh;

at 75% capacity : ` 150 lakh; at 90% capacity : ` 180 lakh; and at 100% capacity : ` 200

Lakh.

Prepare a flexible budget for the year and forecast the profits at 60%, 75%, 90% and

100% of capacity. (9 marks)Chapter - 7 Marginal Costing

2013 - June [6] (b) Marginal costing rewards sales whereas absorption costing rewards

production. Comment. (3 marks)

2013 - June [8] (b) A company has fixed expenses of ` 90,000 with sales of ` 3,00,000

and a profit of ` 60,000 during the first half year. If in the next half year, the company

suffered a loss of ` 30,000.

Calculate !

(i) P/V ratio, break-even point and margin of safety for the first half year.

(ii) Expected sales volume for next half year assuming that selling price and fixed

expenses remain unchanged.

(i ii ) The break-even point and margin of safety for the whole year. (6 marks)

Chapter - 8 : Analysis & Interpretation of Financial Statements2013 - June [6] (a) From the following particulars relating to Genius Ltd., prepare

balance sheet as on 31st March, 2013:


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Investment in shares 100 120

Preliminary expenses 15 5

Current assets:

Inventories 440 422

Trade receivables 160 134

Prepaid expenses 4 5

Cash in hand 1 2

2,217 2,474

Additional in formation:

(i) Depreciation on freehold building @ 2 % on cost ` 12,00,000; on machinery

and plant @ 10% on cost ` 5,00,000; on furniture and fitting @ 5% on cost

`10,000.

(ii) Dividend received ` 6,000 was used in writing down the book value of

investment in shares.

(iii) Goodwill was written off out of general reserve.

(iv) The proposed dividend for the year ended 31st March, 2012 was paid off and

interim dividend of ` 60,000 was paid out of profit and loss account.

(12 marks)


2013 - June [5] {C} (a) State, with reasons in brie f, whether the following statement are

true or false:

(i) Cost sheet is the same as statement of cost and profit. (5)

(ii) Zero base budgeting is based on incremental approach. (6)

(iii) When a factory operates at full capacity, fixed cost also becomes relevant formake or buy decisions. (7)

(iv) Marginal costing is different from direct costing. (7)

(v) Management accounting is based on double entry system. (1)

(2 marks each)

(b) Write the most appropriate answer from the given options in respect of the

following:

(i) The rate of change of labour force in an organisation during a specified period

is called

(a) Labour efficiency

(b) Labour turnover

(c) Labour productivity

(d) None of the above. (3)(ii) Differential cost analysis is incorporated in the

(a) Cost books

(b) Financial books


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(c) Statutory books


(iii) Marginal costing is a very useful technique to management for

(a) Cost control

(b) Profit planning

(c) Decision making

(d) All of the above. (7)

(iv) When prices of materials have a rising trend, then the suitable method for

issuing the materials will be

(a) FIFO

(b) LIFO

(c) HIFO(d) Standard cost price. (2)

(v) Cash flow statement is required for the financial planning of

(a) Short range

(b) Long range

(c) Medium range

(d) Very long range. (9)

(1 mark each)

(c) Re-write the following sentences after filling-in the blank spaces with appropriate

word(s)/figure(s):

(i) A document which provides for assembly of different costs in respect of a cost

centre or a cost unit is called _______. (5)

( ii ) Economic order quant ity depends on _______ and _______ costs. (2)(iii) In case the amount of overheads recovered from production is more than the

actual overheads, there is said to be _______ of overheads. (4)

(iv) Abnormal idle time cost should be charged to _______. (3)

(v) Bin card shows _______ at any moment of time. (2)

(1 mark each)

Shuchita Prakashan (P) Ltd.25/19, L.I.C. Colony, Tagore Town,

Allahabad - 211002Visit us : www.shuchita.com

Documents

Appendix Scanner CS Executive M-I P-2 Old