Roll N

Total No. of Questions-6 Total No. of Printed Pages - 16

TimeAllowed-3 Hours Maximum Marks- 100

DSG
Answer to questions are to be given only in English except in the case of candidates who
have opted for Hindi Medium. If a candidate who has not opted for Hindi Medium,
his/her answers in Hindi will not be valued.

Question No. 1 is compulsory.

Candidate are also required to answer any four questions from the remaining five

questions.

Working notes should form part of the answer.

Marks

1. Answer the following questions 5x4

=20
(a) Suraj Limitedprovides you the following information:
It received a Government Grant @40% towards the acquisition of

Machinery worth 25 Crores.

(i) It received a Capital Subsidy of 150 Lakhs from Government
for setting up a Plant costing 300 Lakhs in a notified backward

region.
(ii) It received 50 Lakhs from Government for setting up a project

for supply of arsenic free water in a notified area.

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ihtreceived ? 5 Lakhs from the Local Authority for providing

free or cnarge to its employees and their

Corona Vaccine

families.
pertormance award of 7 500 Lakhs from
It also received
a
(v)
condition of major renovation in the Power
Government with a
Limited incurred 90% of amount
Plant within 3 years. Suraj
expenditure and balance for Revenue
towards Capital
Expenditure.

State, how you will treat

the above in the books of Suraj Limited.

leading distributor of petrol. A detail inventory of

(b) SM Enterprises is a

closed at the end of each

petrol in hand is taken when the books are

following information is
month. For the end month of June 2021
available:

Sales for the month of June 2021 was 30,40,000.

(i)
ii) General overheads cost 4,00,000.

(iii) Inventory at beginning 10,000 litres @7 92 per litre.

(iv) Purchases June 1 2021, 20,000 litres@7 90 per litre, June 30
2021, 10,000 litres@795 perlitre.
(v) Closing inventory 13,000 litres.

You arerequired to compute the following by FIFO method as per AS 2:

(i) Value of Inventory on 30th June, 2021.

ii) Amount of cost of goods sold for June, 2021.

ii) Profiv/Loss for the month of June, 2021.

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 (3)
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(C) XYZ Limited Marks
provided you the following information for the year
ended 31st March.
2022
(1 The
carrying amount of a property at the end of the year
amounted to 2,16,000 (cost/value 2,50,000 and accumulated
depreciation 7 34,000).
On this date the property was revalued
and was deemed to have a fair value of ?
1,90,000. The balance
on the revaluation surplus relating to a
previous revaluation gain
for this property was 7 20,000.
You arerequired to calculate the revaluation loss as per AS-10
(Revised) and give its treatment in the books of accounts.
(ii) An asset that originally cost 76,000 and had accumulated
depreciation of 62,000 was disposed of during the year for
74,000 cash.
You are required to explain how the disposal should be
accounted for in the financial statements per AS-10
as
(Revised).
(d) Zebra Limited began construction of a new plant on 1st April, 2021 and
obtained a special loan of 7 20,00,000 to finance the construction of
the plant. The rate of interest on loan was 10%.

The expenditure that was incurred on the construction of plant was as

follows

1st April, 2021 10,00,000

1st August, 2021 24,00,000
1st January, 2022 4,00,000
The company's other outstanding non-specific loan was ? 46,00,000 at
an interest rate of 12%.

The construction ofthe plant completed on 31st March, 2022.

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You are required to:
Calculate the amount of interest to be capitalized as per the
(a)
provisions of AS 16 "Borrowing Cost".
(b) Pass a journal entry for capitalizing the cost and the borrowing
cost in respect of the plant.

2. (a) The following particulars relate to hire purchase transactions: 10

() Mita purchased three bikes from Nita on hire purchase basis, the
cash price ofeach bike being 1,00,000

(i) Mita charged depreciation@ 20% on written down value

method.

(ii) Two bikes were seized by the Nita when second instalment was

not paid at the end of the second year. Nita valued the two bikes
at cash price less 30% depreciation charged under it written down

valued method.

? 5,000 repairs of the bikes and then sold them for

iv) Nita spent on

a total amount of 7 85,000.

You are required to compute

) Agreed value of two bikes taken back by Nita.

i) Book value of the bike left with Mita.

(ii) Profit or loss to Mita on two bikes taken back by Nita.

Nita.
(iv) Profit or loss of bikes repossessed, when sold by

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 (5)
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(b) Surya Limited, which operates a wholesale warehouse, had a fire in the
10
premises on January 31*, 2022 which destroyed most of the building,
although stock of the value of ? 3.96 lakhs was salvaged.

The company has an insurance policy covering the stock for 600
Lakhs, and loss of profits including standing charges for 250 Lakhs
with a six-month period of indemnity.

The company's last annual accounts for the year ended December 31*,
2021 showedthe following position
Particulars Particulars
(in Lakhs) (in Lakhs)
To Opening Stock 412.50 By Sales 2000.00
To Purchases 1812.50 By Closing Stock 525.00
To Gross Profit c/d 300.00

2525.00 2525.00
To Variable Expenses 80.00 By Gross Profit b/d 300.00
To Standing Charges 167.50
To Net Profit 52.50
300.00 300.00

The company's record show that the turnover for January 2022 of
100 Lakhs had been the same as for the corresponding month in the
previous year, payments made in January 2022 to trade creditors were
106.68 Lakhs and at the end of that month the balance owing to trade
creditors had increased by 3.32 Lakhs.

The company's business was disrupted until the end of April 2022,
during which period the turnover fell by R 180.00 Lakhs compared
with the same period in the previous year.

You are required to compute the claim to be lodged with the Insurance
Company for Loss of Stock and Loss of Profit.

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3. (a) Stevie and Alicia are in partnership sharing profts and losses equally. 12
They maintain their books on Single Entry System.

The following balances are available from their books as on 31.3.2021

and31.3.2022
Particulars 31.3.202131.3.2022

Building 3,00,000 3,00,000

Equipment 4,80,000 5,44,000
Furniture 50,000 50,000
Debtors ? 2,00,000
Creditors 1,30,000
Stock ? 1,40,000
Bank loan 90,000 70,000
Cash 1,20,000
The transactions during the year ended 31.3.2022 were the following:

Collection from Debtors

7,60,000
Payment to Creditors
5,00,000
Expenses Paid
80,000
Drawings by Stevie
60,000
Discount allowed 11,000
Discount received
9,600
Other information:
() On 1.4.2021, an equipment of book value
40,000 was sold for
30,000. On 1.10.2021, some more
i) Cash sales amounted to 10% of total sales.
equipment were purchased.
(ii) Credit sales amounted to 9,00,000.
(iv) Credit purchases were 80% of total
purchases.
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 (7)
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(v)Cash Purchases amounted to R 1,30,000.
(vi) The firm sells goods at cost plus 25%.
(vii) Outstandingexpenses were 6,000 as on 31.3.2022.
(vii) Capital of Stevie as on 31.3.2021 was 7 30,000 more than the
capital of Alicia, equipment and furniture to be depreciated at
10% p.a. and building@ 2% p.a. (apply depreciation of new
equipment for % year)
You are required to prepare:
Trading and Profit and Loss Account for the year ended
31.3.2022 and;
(ii) The Balance Sheet as on that date.

PQR Limited has three departments L, M and N. The following 8

(b)
information is provided for the year ended 31.3.2022
L M N

Opening stock 10,000 16,000 38,000

Opening reserve for unrealized Profit 4,000 6,000
Materials Consumed 32,000 40,000
Direct labour 18,000 20,000
Closing stock 10,000 40,000 10,000

Sales 1,60,000
Area occupied (sq. mtr.) 5,000 3,000 2,000
No. ofemployees 60 40 20
The following informations are provided:
Stocks of each department are valued at cost to the department
concerned.
cost plus 20% and stocks of M
Stocks of L are transferred to M at
a gross profit of 20% on
sales.
are transferred to N at
salaries and staff welfare 7 36,000
Other common expenses are
and Rent 7 12,000.
and
You are required to prepare Departmental Trading, Profit
31.3.2022.
Loss Account for the year ending
P.T.O.
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Fire Enterprises 20
formed to take over a running business of
4 Cool Limited was in
effect from 1st April, 2021. The company was incorporated
with business was
2021 and the certificate of commencement of
1st August,
entries relating to the transfer of the
received on 1st October 2021. No
which were continued until 31st March,
business were entered in the books
extracted from the books as on
2022. The following Trial Balance was
31st March, 2022.
Particulars Dr Cr.)
19,20,000
Sales
Cost of Goods sold 15,54,000
Rent 80,000
42,000
Salaries
Travelling Expenses 16,800
9,600
Depreciation
Carriage outward 800
Printing &Stationary 4,800
Advertisement 16,000
Miscellaneous Expenses 25,200
Directors' fees 1,200
Managing Director's Remuneration 8,200
3,200
Baddebts
Commission & Brokerage to selling Agents 16,000
Audit fees 6,000
Interest on Debentures 3,000
Interest to Vendors 4,200
Selling &Distribution Expenses 24,000
Preliminary Expenses 3,000
Underwriting Commission 1,800
Fixed Assets 7,30,000
Current Assets 87,600
Cool Limited's Capital as on 1s April, 2021 5,56,000
Current Liabilities 61,400
Debentures 1,00,000
| Total 26,37,400 26,37,400
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Additional Information

to the date of the certificate

of
arose evenly up
(a) Total Sales for the year
(a) increase of two-
they spurted to record
an
commencement
where-after

third during the rest of the year.

The unit cost of goods sold

b) The Company deals in one type of product.
compared to the pre-
was reduced by 10% since 1st August, 2021 as

incorporation period.
1st November,
(c) Rent of old office building was increased by 20% since
from 1st July, 2021 for
2021. It had to also occupy additional space

which rent was 6,000 p.m.

The Salaries tripled from 1st July, 2021.

(d) were

(e) Travelling Expenses include 4,800 towards sales promotion.

() Depreciation includes 600 for new assets acquired in August 2021.

(g) Purchase consideration was discharged by the company on

30h September, 2021 by issuing 60,00 Equity sharesof 10 each.

You are required to prepare the Profit & Loss Statement in a columnar form

for the year ended 31st March, 2022 showing the allocation of profits pre-

the basis of
incorporation and post-incorporation periods indicating
apportionment.

P.T.O.
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 (10)
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5. (a) Given below is the extracts of Balance Marks
Sheet of Daisy Limited as at
31st March, 2021. 10
10-

Particulars
15% 650 Redeemable Preference Shares of ?
100 52,000
each, 80 per share paid up
22,500 Equity Shares of R 10 each, 7
9.50 per share
paid up 2,13,750
2,13,750
Revaluation Reserve
Capital Reserve (realized in cash) 45,000
500
General Reserve
Securities Premium 40,000
500
Profit&Loss Account
Current Liabilities 40,500
Fixed Assets 1,07,750
Non-Current Investments 3,71,500
[Face value 7 50,000]
Bank Balance 1,00,000
The
28,500
following information are provided:
On 1st
April, 2021, the Board of
call of 20 on Directors decided to make a final
Redeemable Preference Shares and
same at a to redeem the
premium of 10% on 1st June, 2021.
The investments of the face value of
market price which was 20,000 are sold at the
150% of the face
value.
It is decided issue sufficient number
to
of Equity Shares of 7
each at a 10
premium of 25% after leaving a balance
bank account. of 50,000 in

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 (11)
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Marks
t was also decided to
convert the partly
paid-up Equity shares
into fully paid up without requiring the shareholders to pay for
the same.

On 1st July, 2021 the Board decided to issue

fully paid bonus
shares to the equity shareholders in the ratio of one
for five.
You are required to pass the necessary journal entries for the above.
(b) Walkaway Footwears has its head office at Nagpur and Branch at
10
Patna. It invoiced goods to its
branch at 20% less than the list
price
which is cost plus 100%, with instruction that cash sales were
to be
made at invoice price and credit sales at catalogue price (i.e. list price).
The following information was available at the branch for the year
ended 31st March, 2022.

(Figures in <)

Stock on 1 April, 2021 (invoice price) 12,000

Debtors on 1s April, 2021 10,000
Goods received from head office (invoice price) 1,32,000

Sales: Cash 46,000

Credit 1.00,000 1,46,000

Cash received from debtors 85,000

Expenses at branch 17,500

Debtors on 31st March, 2022 25,000

Stock on 31st March, 2022 (invoice price) 17,600

Remittances to head office 1,20,000

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You are required to prepare Branch Stock Account, Branch

Adjustment Account, Branch Profit & Loss Account and Branch

Debtor Account for the year ended 31 March, 2022.

6. Answer any four ofthe following: 4x5

6.
=20
(a) The following information is provided by Exe Limited for 31st March,
2022

Particulars

Net Profit before Income Tax and

Managerial
Remuneration, but after Depreciation and Provision for
Repairs 9,40,000
Depreciation provided in the Books 4,05,000
Provision for repairs for Machinery during the year 35,000
Depreciation Allowable under Schedule II 3,40,000
Actual Expenditure incurred on Repairs during the year 25,000
Provision for Income Tax
1,50,000
You are required to calculate the
Managerial Remuneration for Exe
Limited as on 31st March, 2022 in the following situations:

(i) There is only one Whole Time Director.

(ii) There are two Whole Time Directors.

(ii) There are two Whole Time Directors, a part time Director and a

Manager.
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 (13)
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b) Followng is the extract of the Balance Sheet of Sujata Foods Limited

as at 31st March, 2021:

Particulars
Authorised Capital
1,00,000 12% Preference shares of 7 10 each 10,00,000
5,00,000 Equity shares of 10 each 50,00,000
60,00,000
Issued and Subscribed capital
8,000 12% Preference shares of 7 10 each fully paid 80,000
90,000 Equityshares of 10 each, ?8 paid up 7,20,000

Reserves and Surplus

General Reserve 1,20,000
Capital Redemption Reserve 75,000
Securities Premium( Collected in cash) 25,000
Profit and Loss Account 2,00,000
Revaluation Reserve 80,000
On 1st April 2021, the company has made final call @T 2 each on
90,000 equity shares. The call money was received by 15th April,
2021. Thereafter,
the company decided to capitalize its reserves by
way of bonus at the rate of one share for every four shares held, it also
decided that there should be minimum reduction in free
reserves
On 1st June 2021, the Company issued Rights shares at the rate of two
shares for every five shares held on that date at issue price of ? 12
per
share. All the rights shares were accepted by the existing shareholders
and the money was duly received by 20th June, 2021.
YOu are required to pass necessary journal entries in the books of the

Sujata Foods Limited for bonus issue and rights issue.

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(c)State whetherthe following statements are "True' or "False'. Also give

reason for your answer.

) Certain fundamental accounting assumptions underline the

preparation and presentation of financial statements. They are
usually specifically stated because their acceptance and use are
not assumed.

(11) If fundamental accounting assumptions are not followed in

presentation and preparation of financial statements, a specific
disclosure is not required.
ii) All significant accounting policies adopted in the preparation and
presentation of financial statements should form part of the
financial statements.

(iv) Any change in an accounting policy, which has a material effect

should be disclosed. Where the amount
by which any item in the
financial statements is affected
by such change is not
ascertainable, wholly or in part, the facts need not to be indicated.

(d) The following information is provided

by Alpha Limited, for the year
ended 31st March, 2022.

(i) Net profit before taking into account income tax and income
from law suits but after taking into account the following items
was 40 1lakhs.

(i) Depreciation on Fixed Assets 10 lakhs.

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(iii) Discount on issue of Debentures written off 7 Marks
60,000.
(iv) Interest on Debentures paid 7,00,000.
(v) Book value of
investments 7 6 lakhs
(Sale of Investments for
6,40,000).
(vi) Interest received on
investments 7 1,20,000.
(vii) Compensation received 7
1,80,000 by the company in a suit filed.
(viii) Income tax paid 7
21,00,000
(ix) Current assets and
current liabilities in the
end of the beginning and at the
year were as detailed below :

As on As on
31.3.20211 31.3.2022
Stock
Sundry Debtors 24,00,00026,36,000
4,16,000 4,26,200
Cash in hand 3,92,600
Bills Receivable
70,600
1,00,000 80,000
Bills Payable
90,000 80,000
Sundry Creditors 3,32,000 3,42,600
Outstanding Expenses 1,50,000 1,63,600
You are
required to prepare Cash Flow Statement from
Activities in
Operative
accordance with AS-3 (revised)
using the indirect
method for the year ended 31st
March, 2022
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P.T.O.
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Marks
(e) On 1 April 2021 Ms. Jayshree has 5,000 equity shares of Rama
Limited (a listed company) of face value of 10 each. Ms. Jayshree
has purchased the above shares at ? 15 per share and paid a brokerage
of 2% and stamp duty of 1%.

On 15th May, 2021 Ms. Jayshree

purchased another 5,000 shares of
Rama Limited at 18 including
brokerage and stamp duty.
On 26th August, 2021 Rama Limited issued one bonus equity share for
every 1 equity share held by the shareholders.

On 23rd October, 2021 Rama Limited announced a Right Issue which

entitles the holders tosubscribe l equity share for every 2
equity
shares held at 20 per share. Shareholders can exercise
their rights in
full or in part. Ms. Jayshree sold 1/4th of entitlement to Mr. Mike for a
consideration of 10 per share and subscribed the rest
on 1st
November 2021.

Ms. Jayshree also sold 10,000 shares at 7 25 per share on 1st

November, 2021.
The shares of Rama Limited were quoted at 11 per share on
31st March, 2022.

You are required to

prepare Investment account for Ms. Jayshree for
the year ended
31 t March 2022.

DSG