2006 Tamil Nadu State Madurai Kamaraj University M.Com Accounting and Finance Advance Accounting Question paper
Question Paper : Advance Accounting (M.Com)
A. Give the proforma of Statement of Affairs and Deficiency Ale of an insolvent individual.
B. What are pre-incorporation profits? Describe the procedure for calculation of pre-incorporation
profits.
C. State the features of Double ale system. What are the differences between (a) double ale system
and double entry system (b) double ale system and single ale system?
D. What is a share and a debenture? Explain. What are their types? Difference between a share and a debenture.
E. Write notes on: (a) Rebate on bills discounted (b) Short workings (
PART II
F. On 31.12.2002 the Balance Sheet of a limited company disclosed the following:
Liabilities Rs. Assets Rs.
Issued capital of Fixed Assets 5,00,000
Rs. 10 each fully paid 4,00,000 Current Assets 2,00,000
Reserves 90,000 Goodwill 40,000
Profit & Loss alc 20,000 ________
7,40,000
_________
5% Debentures 1,00,000
Current Liabilities 1,30,000
7,40,000
On 31.12.2002 the fixed assets were independently valued at Rs. 3,50,000 and the goodwill at Rs.
50,000. The net profits for the three years were: 2000 -Rs. 51,600, 2001 -Rs. 52,000, and 2002 -Rs.
51,650 of which 20 percent was placed to reserve, this proportion being considered reasonable in the
industry in which the company is engaged and where a fair investment return may be taken at 10%.
Compute the value of the company's shares by (a) the asset method and (b) yield method.
G. On 31st March was as follows: Liabilities 2001, the Balance Sheets of H Ltd was as follows as:
Liabilities Rs Assests Rs
Share capital 5000 12%
Cumulative pref. shares of Rs 10
each fully paid
5,00,000 Good will 4,00,000
150000 equity shares of Rs.10
each fully paid
15,00,000 Plant & Machinery 7,00,000
10 % Debentures 3,00,000 Stock 4,90,000
Creditors 2,00,000 Bank 5,000
Preference Dividend in arrear for
3 years
Patents 1,50,000
Furniture &fixtures 2,00,000
Debtors 2,55,000
Preliminary expenses 8,000
Discount issue on the Debentures 12,000
25,00,000
Profit & Loss a/c 2,80,000
25,00,000
The following scheme of external reconstruction was agreed upon:
(a) A new company to be formed called J Ltd. with an authorized capital of Rs. 32,50,000 in equity
shares of Rs. 10 each.
(b) One equity share Rs. 5 paid in the new company to be allotted for each equity share in the old
company.
(c) Two equity shares Rs. 5 paid up in the new company to be allotted for each preference share in
the old company.
(d) Arrears cancelled. of preference dividends to be
(e) Debenture holders to receive 30,000 equity shares in the new company creditors as fully paid.
(f) Creditors to be taken over by the new company.
(g) The remaining unissued shares to be taken up and paid for in fully by the directors.
(h) The new company to take over the old company's assets except patents. Subject to writing down
plant and machinery by Rs. 2,90,000 and stock by Rs. 60,000.
(i) Patents were realised by H Ltd. for Rs. 10,000.
Show important ledger accounts in the books of H Ltd. and open the books of J Ltd. by means of
journal entries and give the initial balance sheet of J Ltd. Expenses of J Ltd. came to Rs. 10,000.
H. The following is the trial balance on June 30, 2000 of the Modern Manufacturing Company Ltd.
Rs.
Stock on 30th June 1999 7,500
Sales 35,000
Purchases 24,500
Productive wages 5,000
Discounts (Dr.) 700
Discount (Cr.) 500
Salaries 750
Rent 495
General expenses 1,705
Profit & Loss a/c 30th June 1999 (Cr.) 1,503
Dividend paid August 1999 500
Interim dividend paid February 2000 400
Capital 10000 Re. 1 share fully paid 10,000
Marine premium less reinsurances 21,60,000
Management expenses (fire) 2,90,000
Expenses (Marine) 8,00,000
Commission earned on reinsurance ceded (fire) 60,000
Commission earned on reinsurance ceded (marine) 1,20,000
In addition to usual reserves, additional reserve in case of fire insurance is to be increased by 5% of
net premiums.
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