{"id":15837,"date":"2023-03-10T15:49:41","date_gmt":"2023-03-10T10:19:41","guid":{"rendered":"https:\/\/gstguntur.com\/?p=15837"},"modified":"2023-03-10T15:51:25","modified_gmt":"2023-03-10T10:21:25","slug":"ca-inter-accounts-paper-nov-2020","status":"publish","type":"post","link":"https:\/\/gstguntur.com\/ca-inter-accounts-paper-nov-2020\/","title":{"rendered":"CA Inter Accounts Question Paper Nov 2020"},"content":{"rendered":"

CA Inter Accounts Question Paper Nov 2020 \u2013 CA Inter Accounts Study Material<\/a>\u00a0is designed strictly as per the latest syllabus and exam pattern.<\/p>\n

CA Inter Nov 2020 Accounts Question Paper<\/h2>\n

Question 1.
\n(a) A Ltd. had following assets. Calculate depreciation for the year ending 31st March, 2020 for each asset as per AS 10 (Revised) (5 Marks)<\/p>\n

    \n
  1. Machinery purchased for \u20b9 10 lakhson 1st April, 2015 and residual value after useful life of 5 years, based on 2015 prices is \u20b9 10 lakhs.<\/li>\n
  2. Land for \u20b9 50 lakhs.<\/li>\n
  3. A Machinery is constructed for \u20b9 5,00,000 for its own use (useful life is 10 years). Construction is completed on 1st April, 2019, but the company does not begin using the machine until 31st March, 2020.<\/li>\n
  4. Machinery purchased on 1st April, 2017 for \u20b9 50,000 with useful life of 5 years and residual value is NIL. On 1st April, 2019, management decided to use this asset for further 2 years only.<\/li>\n<\/ol>\n

    Answer:<\/p>\n\n\n\n\n\n\n\n\n
    Asset<\/td>\nWorkings<\/td>\nDepreciation<\/td>\n<\/tr>\n
    Machinery<\/td>\nCost on 1st April, 2015 = 10 Lacs
    \nBook Value on 31st March, 2020 is below the residual value.Thus, as per AS 10, there will be no depreciation for the year ending 31st March, 2020.<\/td>\n    		Nil<\/td>\n<\/tr>\n
    Land<\/td>\nNot a depreciable asset<\/td>\nNil<\/td>\n<\/tr>\n
    Machinery<\/td>\nDepreciation begins when asset is ready for use.
    \nThus, even if the company has not started using the asset, it does not make any difference.<\/td>\n    		50,000<\/td>\n<\/tr>\n
    Machinery<\/td>\nCost on 1st April, 2017 = 50,000
    \nBook Value as on 1st April, 2019 = 40,000<\/td>\n    		20,000<\/td>\n<\/tr>\n
    <\/td>\nSince there has been a change in the useful life, the unamortised deprecia\u00adble amount will be written off over the remaining useful life i.e. 2 years<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    \"CA<\/p>\n

    (b) On 1st April, 2016, Mac Ltd. received a Government Grant of \u20b9 60 lakhs for acquisition of machinery costing \u20b9 300 lakhs. The grant was credited to the cost of the asset. The estimated useful life of the machinery is 10 years. The machinery is depreciated @ 10% on WDV basis. The company had to refund the grant in June 2019 due to non-compliance of certain conditions.<\/p>\n

    How the refund of the grant is dealt with in the books of Mac Ltd. assuming that the company did not charge any depreciation for the year 2019-20.
    \nPass necessary Journal Entries for the year 2019-20. (5 Marks)
    \nAnswer:
    \nWhat AS-12 states:
    \nAccording to para 21 of AS 12, the amount refundable in respect of a grant related to a specific fixed asset should be recorded by increasing the book value of the asset or by reducing deferred income balance, as appropriate, by the amount refundable.<\/p>\n

    Where the book value is increased, depreciation on the revised book value should be provided prospectively over the residual useful life of the asset.<\/p>\n

    Analysis and conclusion:
    \nJournal Entry:
    \n(For refund of grant)
    \nGiven – The Grant was credited to Machinery Account:<\/p>\n\n\n\n\n
    Particulars<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
    Machinery A\/c Dr.<\/p>\n

    To Bank A\/c (Being grant refunded)<\/td>\n

    		60 lakhs<\/td>\n60 lakhs<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Balance of Machinery after three years but before refund:
    \nMachinery was initially recorded in the books = \u20b9 300 lakhs – \u20b9 60 lakhs = \u20b9 240 lakhs
    \nValue of machinery after three years but before refund of grant = \u20b9 240 lakhs \u00d7 0.9 \u00d7 0.9 \u00d7 0.9
    \n= \u20b9 174.96 lakhs
    \nBalance of machinery after refund of grant:
    \n= (\u20b9 174.96 lakhs + \u20b9 60 lakhs) = \u20b9 234.96 lakhs<\/p>\n

    \"CA<\/p>\n

    (c) A Limited invested in the shares of XYZ Ltd. on 1st December, 2019 at a cost of \u20b9 50,000. Out of these shares \u20b9 25,000 shares were purchased with an intention to hold for 6 months and \u20b9 25,000 shares were purchased with an intention to hold as long-term Investment.<\/p>\n

    A Limited also earlier purchased Gold of \u20b9 1,00,000 and Silver of \u20b9 30,00,000 on 1st April, 2019. Market value as on 31st March, 2020 of above investments are as follows :
    \nShares – \u20b9 47,500 (Decline in the value of shares is temporary.)
    \nGold – \u20b9 1,80,000
    \nSilver – \u20b9 30,55,000
    \nHow above investments will be shown in the books of account of M\/s. A Limited for the year ending 31st March, 2020 as per the provision of AS 13 (Revised)? (5 Marks)
    \nAnswer:
    \nWhat AS-13 states:
    \nAs per AS 13, for investment in shares – if the investment is purchased, with an-intention to hold for short-term period (less than one year), then it will be classified as current investment and to be carried at lower of cost and fair value.<\/p>\n

    If equity shares are acquired with an intention to hold for long term period (more than one year), then should be considered as long-term investment to be shown at cost in the Balance Sheet of the company. However, provision for diminution should be made to recognize a decline, if other than temporary, in the value of the investments.<\/p>\n

    Analysis and conclusion:
    \nIn case of shares:
    \n25,000 shares will be valued at lower of cost (\u20b9 25,000) and market value (\u20b9 23,750) as on 31 March 2020, i.e., \u20b9 23,750.<\/p>\n

    Rest of the 25,000 shares will be valued at cost as it is a long-term investment.<\/p>\n

    Gold and Silver are generally purchased with an intention to hold it for long term period until and otherwise given. Hence the investment in gold and silver (purchases on 1st April 2019 shall continue to be shown at cost as on 31st March 2020 i.e. \u20b9 1,00,000 and \u20b9 30,00,000 respectively, though their realizable values have been increased. If held as short term then it should be valued at lower of cost or fair value (Market price).<\/p>\n

    \"CA<\/p>\n

    (d) On 15th April, 2019 RBM Ltd. obtained a Term Loan from the Bank for \u20b9 320 lakhs to be utilized as under:<\/p>\n\n\n\n\n\n\n\n\n\n
    <\/td>\n\u20b9 (in lakhs)<\/td>\n<\/tr>\n
    Construction for factory shed<\/td>\n240<\/td>\n<\/tr>\n
    Purchase of Machinery<\/td>\n30<\/td>\n<\/tr>\n
    Working capital<\/td>\n24<\/td>\n<\/tr>\n
    Purchase of Vehicles<\/td>\n12<\/td>\n<\/tr>\n
    Advance for tools\/cranes etc.<\/td>\n8<\/td>\n<\/tr>\n
    Purchase of technical know-how<\/td>\n6<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    In March, 2020 construction of shed was completed and machinery was installed. Total interest charged by the bank for the year ending 31 st March, 2020 was \u20b9 40 lakhs.<\/p>\n

    In the context of provisions of AS 16 ‘Borrowing Costs\u2019, show the treatment of interest and also explain the nature of Assets. (5 Marks)
    \nAnswer:
    \nWhat AS-16 states:
    \nAccording to AS 16, borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset should be capitalised as part of the cost of that asset. The amount of borrowing costs eligible for capitalisation should be determined in accordance with this Standard. Other borrowing costs should be recognised as an expense in the period in which they are incurred.<\/p>\n

    Analysis and conclusion:
    \nAmount of borrowing costs capitalized and expensed off should be calculated as follows:
    \n\"CA<\/p>\n

    Note:
    \nIt has been assumed that construction of factory shed will normally take more than a year (substantial period of time), hence considered as qualifying asset.<\/p>\n

    \"CA<\/p>\n

    Question 2.
    \n(a) Vijay & Co. of Jaipur has a branch in Patna to which goods are sent @ 20% above cost. The branch makes both cash & credit sales. Branch expenses are paid direct from Head office and the branch has to remit all cash received into the bank account of Head office. Branch doesn\u2019t maintain any books of account, but sends monthly returns to the head office.<\/p>\n

    Following further details are given for the year ended 31st March, 2020:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
    <\/td>\nAmount (\u20b9)<\/td>\n<\/tr>\n
    Goods received from Head office at Invoice Price<\/td>\n8,40,000<\/td>\n<\/tr>\n
    Goods returned to Head office at Invoice Price<\/td>\n60,000<\/td>\n<\/tr>\n
    Cash sales for the year 2019-20<\/td>\n1,85,000<\/td>\n<\/tr>\n
    Credit Sales for the year 2019-20<\/td>\n6,25,000<\/td>\n<\/tr>\n
    Stock at Branch as on 1-04-2019 at Invoice price<\/td>\n72,000<\/td>\n<\/tr>\n
    S. Debtors at Patna branch as on 1-04-2019<\/td>\n96,000<\/td>\n<\/tr>\n
    Cash received from Debtors<\/td>\n4,38,000<\/td>\n<\/tr>\n
    Discount allowed to Debtors<\/td>\n7,500<\/td>\n<\/tr>\n
    Goods returned by customers at Patna Branch<\/td>\n14,000<\/td>\n<\/tr>\n
    Bad debts written off<\/td>\n5,500<\/td>\n<\/tr>\n
    Amount recovered from Bad debts previously written off as Bad.<\/td>\n1,000<\/td>\n<\/tr>\n
    Rent, Rates & Taxes at Branch<\/td>\n24,000<\/td>\n<\/tr>\n
    Salaries & wages at Branch<\/td>\n72,000<\/td>\n<\/tr>\n
    Office Expenses (at Branch)<\/td>\n9,200<\/td>\n<\/tr>\n
    Stock at Branch as on 31-03-2020 at cost price<\/td>\n1,25,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    Prepare necessary ledger accounts in the books of Head office by following Stock and Debtors method and ascertain Branch profit. (10 Marks)<\/p>\n

    \"CA<\/p>\n

    (b) M\/s Rohan & Sons runs a business of Electrical goods on wholesale basis. The books of account are closed on 31st March every year. The Balance Sheet as on 31st March, 2019 is as follows :<\/p>\n\n\n\n\n\n\n\n\n
    Liabilities<\/td>\n\u20b9<\/td>\nAssets<\/td>\n\u20b9<\/td>\n<\/tr>\n
    Capital<\/td>\n12,50,000<\/td>\nFixed Assets<\/td>\n6,50,000<\/td>\n<\/tr>\n
    Trade Creditors<\/td>\n1,90,000<\/td>\nClosing stock<\/td>\n3,75,000<\/td>\n<\/tr>\n
    Profit & Loss A\/c<\/td>\n1,45,000<\/td>\nTrade Debtors<\/td>\n3,65,000<\/td>\n<\/tr>\n
    <\/td>\n<\/td>\nCash & Bank<\/td>\n1,95,000<\/td>\n<\/tr>\n
    <\/td>\n15,85,000<\/td>\n<\/td>\n15,85,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    The management estimates the purchase & sales for the year ended 31st March, 2020 as under:<\/p>\n\n\n\n\n\n
    Particulars<\/td>\nUpto 31-1-2020 (\u20b9)<\/td>\nFebruary 2020 (\u20b9)<\/td>\nMarch 2020 (\u20b9)<\/td>\n<\/tr>\n
    Purchases<\/td>\n16,20,000<\/td>\n1,40,000<\/td>\n1,25,000<\/td>\n<\/tr>\n
    Sales<\/td>\n20,75,000<\/td>\n2,10,000<\/td>\n1,75,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

    All Sales and Purchases are on credit basis. It was decided to invest \u20b9 1,50,000 in purchase of Fixed assets, which are depreciated @ 10% on book value. A Fixed Asset of book value as on 01.04.2019, \u20b9 60,000 was sold for \u20b9 56,000 on 31st March, 2020.<\/p>\n

    The time lag for payment to Trade Creditors for purchases is one month and receipt from Trade debtors for sales is two months. The business earns a gross profit of 25% on turnover. The expenses against gross profit amounts to 15% of the turnover. The amount of depreciation is not included in these expenses.<\/p>\n

    Prepare Trading & profit & Loss Account for the year ending 31st March, 2020 and draft a Balance Sheet as at 31st March, 2020 assuming that creditors are all Trade creditors for purchases and debtors are all Trade debtors for sales and there is no other current assets and liabilities apart from stock and cash and bank balances.<\/p>\n

    Also, prepare Cash & Bank account and Fixed Assets account for the year ending 31 st March, 2020. (10 Marks)
    \nAnswer:
    \nTrading and Profit and Loss A\/c
    \nFor the year ending 31st March, 2020
    \n\"CA<\/p>\n

    Balance Sheet
    \nAs on 31st March, 2020
    \n\"CA<\/p>\n

    Debtors A\/c
    \n\"CA<\/p>\n

    Creditors A\/c
    \n\"CA<\/p>\n

    Cash and Bank A\/c
    \n\"CA<\/p>\n

    Fixed Assets A\/c
    \n\"CA<\/p>\n

    Working Note – Profit on sale of Fixed Asset:
    \nBook value as on 1st April, 2019 = 60,000
    \nThus,
    \nBook value as on 31st March, 2020 = 60,000 – 10% = 54,000.
    \nSold at = 56,000
    \nTherefore,
    \nProfit on sale = 56,000 – 54,000 = 2,000.<\/p>\n

    \"CA<\/p>\n

    Question 3.
    \n(a) On 1st April, 2019 Mr. H had 30,000 equity shares of ABC Ltd. at a book value of \u20b9 18 per share (Nominal value \u20b9 10 per share). On 10th June, 2019, H purchased another 10,000 equity shares of the ABC Ltd. at \u20b9 16 per : share through a broker who charged 1.5% brokerage.<\/p>\n

    The directors of ABC Ltd. announced a bonus and a right issue. The terms of the issues were as follows :<\/p>\n

      \n
    1. Bonus shares were declared at the rate of one equity share for every four shares held on 15th July, 2019.<\/li>\n
    2. Right shares were to be issued to the existing equity shareholders on 31 st August, 2019. The company decides to issue one right share for every five equity share held at 20% premium and the due date for payment will be 30th September, 2019. Shareholders were entitled to transfer their rights in full or in part.<\/li>\n
    3. No dividend was payable on these issues.<\/li>\n<\/ol>\n

      Mr. H subscribed 60% of the rights entitlements and sold the remaining rights for consideration of \u20b9 5 per share.<\/p>\n

      Dividends for the year ending 31 st March, 2019 was declared by ABC Ltd. at the rate of 20% and received by Mr. H on 31st October, 2019.<\/p>\n

      On 15th January, 2020 Mr. H sold half of his shareholdings at \u20b9 17.50 per share and brokerage was charged @1%.<\/p>\n

      You are required to prepare Investment account in the books of Mr. H for the year ending 31st March, 2020, assuming the shares are valued at average cost. (10 Marks)
      \nAnswer:
      \n\"CA
      \nGross profit rate is = 1,72,000\/8,60,000 \u00d7 100 = 20%<\/p>\n

      Step 2:
      \nMemorandum Trading A\/c:
      \nWe need to prepare a ‘Memorandum Trading A\/c’ to ascertain the stock on date of fire.
      \nIt will be prepared for the period from 1.4.2019 to 30.09.2019 to compute the value of stock on 31.09.2019.<\/p>\n

      Memorandum Trading A\/c
      \nfor the period 1st April, 2019 to 30th September, 2019
      \n\"CA
      \n# (6,02,000 – 52,000)<\/p>\n

      # # For financial statement purposes, this would form part of closing stock (since there is no actual sale). However, this has been shown separately for computation of claim for loss of stock since the goods were physically with the consignee and thus, there was no loss of such stock.<\/p>\n

      \"CA<\/p>\n

      Working Note:
      \nComputation of Adjusted Purchases:<\/p>\n\n\n\n\n\n\n
      Particulars<\/td>\n\u20b9<\/td>\n<\/tr>\n
      Purchases<\/p>\n

      Less: Purchase of machinery<\/p>\n

      Less: Withdrawn by partners [52,000 – 20%]<\/td>\n

      		4,48,000<\/p>\n

      (41,600)<\/p>\n

      (58,000)<\/td>\n<\/tr>\n

      Free samples Adjusted purchases<\/td>\n(8,500)<\/td>\n<\/tr>\n
      3,39,900<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

      Step 3:
      \nComputation of loss of stock:<\/p>\n\n\n\n\n\n
      Particulars<\/td>\n\u20b9<\/td>\n<\/tr>\n
      Book value of stock as on 30.09.2019<\/p>\n

      Less: Stock salvaged<\/p>\n

      Loss of stock<\/td>\n

      		1,88,100<\/p>\n

      (35,000)<\/td>\n<\/tr>\n

      1,53,100<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

      Step 4:
      \nComputation of Amount of claim:
      \n= Loss of stock \u00d7 Policy value\/Value of stock on the date of fire
      \n= 1,53,100 \u00d7 1,88,100\/1,20,000 = \u20b9 97,671<\/p>\n

      \"CA<\/p>\n

      Question 4.
      \n(a) The following figures have been extracted from the books of Manan Limited for the year ended on 31-3-2020. You are required to prepare the Cash Flow statement as per AS 3 using indirect method. (10 Marks)<\/p>\n

        \n
      1. Net profit before taking into account income tax and income from law suits but after taking into account the following items was \u20b9 30 lakhs :
        \n(a) Depreciation on Property, Plant & Equipment \u20b9 7.50 lakhs.
        \n(b) Discount on issue of Debentures written off \u20b9 45,000.
        \n(c) Interest on Debentures paid \u20b9 5,25,000.
        \n(d) Book value of investments \u20b9 4.50 lakhs (Sale of Investments for \u20b9 4,80,000).
        \n(e) Interest received on investments \u20b9 90,000.<\/li>\n
      2. Compensation received \u20b9 1,35,000 by the company in a suit filed.<\/li>\n
      3. Income-tax paid during the year \u20b9 15,75,000.<\/li>\n
      4. 22,500,10% preference shares of \u20b9 100 each were redeemed on 2-04-2019 at a premium of 5%.<\/li>\n
      5. Further the company issued 75,000 equity shares of \u20b9 10 each at a premium of 20% on 30-3-2020 (Out of 75,000 equity shares, 25,000 equity shares were issued to a supplier of machinery)<\/li>\n
      6. Dividend for FY 2018-19 on preference shares were paid at the time of redemption.<\/li>\n
      7. Dividend on Equity shares paid on 31-1-2020 for the year 2018-2019 \u20b9 7.50 lakhs (including dividend distribution tax) and interim dividend paid \u20b9 2.50 lakhs for the year 2019-20.<\/li>\n
      8. Land was purchased on 2-4-2019 for \u20b9 3,00,000 for which the company issued 22,000 equity shares of \u20b9 10 each at a premium of 20% to the land owner and balance in cash as consideration.<\/li>\n
      9. Current assets and current liabilities in the beginning and at the end of the years were as detailed below :<\/span><\/li>\n<\/ol>\n\n\n\n\n\n\n\n\n\n
        <\/td>\nAs on 1-4-2019<\/td>\nAs on 31-3-2020<\/td>\n<\/tr>\n
        <\/td>\n<\/td>\n\u20b9<\/td>\n<\/tr>\n
        Inventory<\/td>\n18,00,000<\/td>\n19,77,000<\/td>\n<\/tr>\n
        Trade receivables<\/td>\n3,87,000<\/td>\n3,79,650<\/td>\n<\/tr>\n
        Cash in hand<\/td>\n3,94,450<\/td>\n16,950<\/td>\n<\/tr>\n
        Trade payables<\/td>\n3,16,500<\/td>\n3,16,950<\/td>\n<\/tr>\n
        Outstanding expenses<\/td>\n1,12,500<\/td>\n1,22,700<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

        Answer:
        \nCash Flow Statement
        \nfor the year ended 31st March, 2019
        \n\"CA
        \nNote:
        \nPurchase of land in exchange of equity shares (issued at 20% premium) has not been considered in the cash flow statement as it does not involve any cash transaction.<\/p>\n

        \"CA<\/p>\n

        (b) Sumit Ltd. (an unlisted company other than AIFI, Banking company, NBFC and HFC) had 8,000, 9% debentures of \u20b9 100 each outstanding as on 1st April, 2019, redeemable on 31st March, 2020.
        \nOn 1st April, 2019, the following balance appeared in the books of account:<\/p>\n

          \n
        • \u00a0Investment in 1,000,1% secured Govt, bonds of \u20b9 100 each, \u20b9 1,00,000.<\/li>\n
        • Debenture Redemption Reserve is \u20b9 50,000.<\/li>\n<\/ul>\n

          Interest on investments is received yearly at the end of financial year.<\/p>\n

          1,000 own debentures were purchased on 30th March, 2020 at an average price of \u20b9 96.50 and cancelled on the same date.<\/p>\n

          On 31st March, 2020, the investments were realized at par and the debentures were redeemed. You are required to write up the following accounts for the year ended 31st March, 2020: (10 Marks)<\/p>\n

            \n
          1. 12% Debentures Account.<\/li>\n
          2. Debenture Redemption Reserve Account.<\/li>\n
          3. DRR Investment Account.<\/li>\n
          4. Own Debentures Account.<\/li>\n<\/ol>\n

            Answer:
            \nDebenture Redemption Reserve A\/c
            \n\"CA<\/p>\n

            Working Note:
            \nCalculation of DRR before redemption = 10% of \u20b9 80,00,000 = 8,00,000
            \nAvailable balance = \u20b9 50,000
            \nDRR required = 8,00,000 – 50,000 = \u20b9 7,50,000.<\/p>\n

            Debenture A\/c
            \n\"CA<\/p>\n

            7% Secured Bonds of Govt.
            \n(DRR Investment) A\/c
            \n\"CA<\/p>\n

            \"CA<\/p>\n

            Question 5.
            \n(a) On 1st April, 2017, Mr. Nilesh acquired a Tractor on Hire purchase from Raj Ltd. The terms of contract were as follows :<\/p>\n

              \n
            1. The Cash price of the Tractor was \u20b9 11,50,000.<\/li>\n
            2. \u20b9 2,50,000 were to be paid as down payment on the date of purchase.<\/li>\n
            3. The Balance was to be paid in annual instalments \u20b9 3,00,000 plus interest at the end of the year.<\/li>\n
            4. Interest chargeable on the outstanding balance was 8% p.a<\/li>\n
            5. Depreciation @ 10% p.a is to be written off using straight line method.<\/li>\n<\/ol>\n

              Mr. Nilesh adopted the Interest Suspense method for recording his Hire purchase transaction.
              \nYou are required to:
              \nPrepare the Tractor account, Interest Suspense account and Raj Ltd.\u2019 s account in the books of Mr. Nilesh. (8 Marks)<\/p>\n

              \"CA<\/p>\n

              (b) The Books of Arpit Ltd. shows the following Balances as on 31st December, 2019:<\/p>\n\n\n\n\n\n\n\n\n
              <\/td>\nAmount (\u20b9)<\/td>\n<\/tr>\n
              6,00,000 Equity shares of \u20b9 10 each fully paid up<\/td>\n60,00,000<\/td>\n<\/tr>\n
              30,000,10% Preference shares of \u20b9 100 each, \u20b9 80 paid up<\/td>\n24,00,000<\/td>\n<\/tr>\n
              Securities Premium<\/td>\n6,00,000<\/td>\n<\/tr>\n
              Capital Redemption Reserve<\/td>\n18,00,000<\/td>\n<\/tr>\n
              General Reserve<\/td>\n35,00,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

              Under the terms of issue, the Preference Shares are redeemable on 31 st March, 2020 at a premium of 10%. In order to finance the redemption, the Board of Directors decided to make a fresh issue of 1,50,000 Equity shares of \u20b9 10 each at a premium of 20%, \u20b9 2 being payable on application, \u20b9 7 (including premium) on allotment and the balance on 1st January, 2021. The issue was fully subscribed and allotment made on 1st March, 2020. The money due on allotment was received by 20th March, 2020.<\/p>\n

              The preference shares were redeemed after fulfilling the necessary conditions of Section 55 of the Companies Act, 2013.<\/p>\n

              You are required to pass the necessary Journal Entries and also show how the relevant items will appeal in the Balance Sheet of the company after the redemption carried out on 31st March, 2020. (12 Marks)
              \nAnswer:
              \nStep 1:
              \nEquation to Identify the amount of CRR Transfer:
              \nPreference Share Capital (Face Value of PSC)
              \n= Capital Redemption Reserve (CRR) + Proceeds of Fresh Issue (Without premium)
              \n30,00,000 = 19,50,000 (Balancing figure) + 10,50,000 (Working note)
              \n30,00,000 = 19,50,000 + 10,50,000<\/p>\n

              Working Note:
              \nAmount received (excluding premium) on fresh issue of shares till the date of redemption should be considered for calculation of proceeds of fresh issue of shares.<\/p>\n

              Thus, proceeds of fresh issue of shares are \u20b9 10,50,000 (\u20b9 3,00,000 application money plus \u20b9 7,50,000 received on allotment towards share capital).<\/p>\n

              \"CA<\/p>\n

              Step 2:
              \nJournal Entries:
              \n\"CA
              \n\"CA<\/p>\n

              Balance Sheet (Extract)
              \n\"CA<\/p>\n

              Notes to Accounts:
              \n\"CA<\/p>\n

              \"CA<\/p>\n

              Question 6.
              \nAnswer any four of the following :<\/p>\n

              (a) Department A sells goods to Department B at a profit of 20% on cost and to Department C at 50% on cost. Department B sells goods to Department A and Department C at a profit of 15% and 10% on sales respectively. Department C sells goods to Department A and Department B at a profit of 10% and 5% on cost respectively.<\/p>\n

              Stock lying at different departments at the end of the year are as follows:<\/p>\n\n\n\n\n\n\n\n
              <\/td>\nDepartment A<\/td>\nDepartment B<\/td>\nDepartment C<\/td>\n<\/tr>\n
              <\/td>\n(\u20b9)<\/td>\n(\u20b9)<\/td>\n(\u20b9)<\/td>\n<\/tr>\n
              Transfer from Department A<\/td>\n<\/td>\n1,14,000<\/td>\n60,000<\/td>\n<\/tr>\n
              Transfer from Department B<\/td>\n55,000<\/td>\n<\/td>\n15,200<\/td>\n<\/tr>\n
              Transfer from Department C<\/td>\n52,800<\/td>\n1,11,300<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

              Calculate Department wise unrealised profit on Stock. (5 Marks)<\/p>\n

              \"CA<\/p>\n

              (b) What are the qualitative characteristics of the Financial Statements which improve the usefulness of the information furnished therein? (5 Marks)<\/p>\n

              (c) Following is the draft Profit & Loss Account of X Ltd. for the year ended 31st March, 2020:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
              <\/td>\nAmount (\u20b9)<\/td>\n<\/td>\nAmount (\u20b9)<\/td>\n<\/tr>\n
              To Administrative Expenses<\/td>\n5,96,400<\/td>\nBy Balance b\/d<\/td>\n7,25,300<\/td>\n<\/tr>\n
              To Advertisement Expenses<\/td>\n1,10,500<\/td>\nBy Balance from Trading A\/c<\/td>\n42,53,650<\/td>\n<\/tr>\n
              To Sales Commission<\/td>\n1,05,550<\/td>\nBy Subsidies received from Government<\/td>\n3,50,000<\/td>\n<\/tr>\n
              To Director\u2019s fees<\/td>\n1,48,900<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              To Interest on Debentures<\/td>\n56,000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              To Managerial Remuneration<\/td>\n3,05,580<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              Tp Depreciation on Fixed Assets<\/td>\n5,78,530<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              To Provision for taxation<\/td>\n12,50,600<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              To General Reserve<\/td>\n5,50,000<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              To Investment Revaluation Reserve<\/td>\n25,800<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              To Balance c\/d<\/td>\n16,01,090<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
              <\/td>\n53,28,950<\/td>\n<\/td>\n53,28,950<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

              Depreciation on Fixed Assets as per. Schedule II of the Companies Act, 2013 was \u20b9 6,51,750. You are required to calculate the maximum limits of the managerial remuneration as per Companies Act, 2013. (5 Marks)
              \nAnswer:
              \nComputation of Net Profit:
              \n\"CA
              \nThus,
              \nMaximum Managerial remuneration = 11% of \u20b9 29,34,550 = \u20b9 3,22,800.<\/p>\n

              \"CA<\/p>\n

              (d) Following is the Balance Sheet of M\/s. S. Traders as on 31st March, 2019:<\/p>\n\n\n\n\n\n\n\n\n\n
              Liabilities<\/td>\n(\u20b9)<\/td>\nAssets<\/td>\n(\u20b9)<\/td>\n<\/tr>\n
              Capital:<\/td>\n1,50,000<\/td>\nFixed Assets<\/td>\n1,05,000<\/td>\n<\/tr>\n
              11% Bank Loan<\/td>\n80,000<\/td>\nClosing stock<\/td>\n76,000<\/td>\n<\/tr>\n
              Trade payables<\/td>\n52,000<\/td>\nDebtors<\/td>\n68,000<\/td>\n<\/tr>\n
              Profit & Loss A\/c<\/td>\n56,000<\/td>\nDeferred Expenditure<\/td>\n24,000<\/td>\n<\/tr>\n
              <\/td>\n<\/td>\nCash & Bank<\/td>\n65,000<\/td>\n<\/tr>\n
              <\/td>\n3,38,000<\/td>\n<\/td>\n3,38,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

              Additional information<\/p>\n

                \n
              1. Remaining life of Fixed Assets is 6 years with even use. The net realizable value of Fixed Assets as on 31st March, 2020 is of 90,000.<\/li>\n
              2. Firm\u2019s Sales & Purchases for the year ending 31st March, 2020 amounted to \u20b9 7,80,000 and \u20b9 6,25,000 respectively.<\/li>\n
              3. The cost & net realizable value of the stock as on 31st March, 2020 was \u20b9 60,000 and \u20b9 66,000 respectively.<\/li>\n
              4. General expenses (including interest on Loan) for the year 2019-20 were \u20b9 53,800.<\/li>\n
              5. Deferred expenditure is normally amortised equally over 5 years starting from the Financial year 2018-19 i.e. \u20b9 6,000 per year.<\/li>\n
              6. Debtors on 31st March, 2020 is \u20b9 65,000 of which \u20b9 5,000 is doubtful. Collection of another \u20b9 10,000 debtors depends on successful re-installation of certain products supplied to the customer.<\/li>\n
              7. Closing Trade payable \u20b9 48,000, which is likely to be settled at 5% discount.<\/li>\n
              8. There is a prepayment penalty of \u20b9 4,000 for Bank loan outstanding.<\/li>\n
              9. Cash & Bank balances as on 31st March, 2020 is \u20b9 1,65,200.<\/li>\n<\/ol>\n

                Prepare Profit & Loss Account and Balance Sheet for the year ended 31st March, 2020 assuming the firm is not a going concern. (5 Marks)
                \nAnswer:
                \nTrading and Profit and Loss A\/c
                \nFor the year ending 31st March, 2020
                \n\"CA<\/p>\n

                Balance Sheet
                \nAs on 31st March, 2020
                \n\"CA<\/p>\n

                \"CA<\/p>\n

                (e) Moon Ltd. was incorporated on 1st August, 2019 to take over the running business of a partnership firm w.e.f. 1st April, 2019. The summarized Profit & Loss Account for the year ended 31 st March, 2020 is as under:<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
                <\/td>\n<\/td>\nAmount<\/td>\n<\/tr>\n
                <\/td>\n<\/td>\n\u20b9<\/td>\n<\/tr>\n
                Gross Profit<\/td>\n<\/td>\n6,30,000<\/td>\n<\/tr>\n
                Less : Salaries<\/td>\n1,56,000<\/td>\n<\/td>\n<\/tr>\n
                <\/td>\n<\/td>\nAmount<\/td>\n<\/tr>\n
                Rent, Rates & Taxes<\/td>\n72,000<\/td>\n<\/td>\n<\/tr>\n
                Commission on sales<\/td>\n40,600<\/td>\n<\/td>\n<\/tr>\n
                Depreciation<\/td>\n60,000<\/td>\n<\/td>\n<\/tr>\n
                Interest on Debentures<\/td>\n36,000<\/td>\n<\/td>\n<\/tr>\n
                Director\u2019s fees<\/td>\n24,000<\/td>\n<\/td>\n<\/tr>\n
                Advertisement<\/td>\n48,000<\/td>\n4,36,600<\/td>\n<\/tr>\n
                Net profit for the year<\/td>\n<\/td>\n1,93,400<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                Moon Ltd. initiated an advertising campaign which resulted in increase of monthly sales by 25% post incorporation.<\/p>\n

                You are required to prepare a statement showing the profit for the year between, pre-incorporation and post-incorporation. Also, explain how profits are to be treated in the accounts ? (5 Marks)
                \nAnswer:
                \nWorking Notes – For computation of Sales and Time ratio:
                \nW. Note I:
                \nLet monthly sales = x
                \nComputation of Sales ratio:<\/p>\n\n\n\n\n
                Particulars<\/td>\n<\/td>\n<\/tr>\n
                Sales for pre-incorporation period (x multiplied by 4 months) Sales for post-incorporation period (1.25 multiplied by 8 months)<\/td>\n4x<\/p>\n

                lOx<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

                \"CA<\/p>\n

                Therefore,
                \nSales Ratio = 4 : 10 i.e. 2 : 5
                \nW. Note II:<\/p>\n

                Computation of Time ratio:
                \n1st April, 2019 to 31st July, 2019: 1st August, 2019 to 31st March, 2020
                \n= 4 months: 8 months = 1 : 2
                \nTherefore,
                \nTime Ratio is 1 : 2<\/p>\n

                Statement showing Computation of Profits for pre-incorporation and post-incorporation periods for the year ended 31st March, 2020
                \n\"CA<\/p>\n","protected":false},"excerpt":{"rendered":"

                CA Inter Accounts Question Paper Nov 2020 \u2013 CA Inter Accounts Study Material\u00a0is designed strictly as per the latest syllabus and exam pattern. CA Inter Nov 2020 Accounts Question Paper Question 1. (a) A Ltd. had following assets. Calculate depreciation for the year ending 31st March, 2020 for each asset as per AS 10 (Revised) …<\/p>\n

                CA Inter Accounts Question Paper Nov 2020<\/span> Read More »<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[167],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/15837"}],"collection":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/comments?post=15837"}],"version-history":[{"count":2,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/15837\/revisions"}],"predecessor-version":[{"id":15899,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/posts\/15837\/revisions\/15899"}],"wp:attachment":[{"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/media?parent=15837"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/categories?post=15837"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gstguntur.com\/wp-json\/wp\/v2\/tags?post=15837"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}