National Management College – Perundurai
CA Intermediate
Paper-5 Advanced Accounting
Date: 23.09.2023 Total Marks : 100
Time: 3 Marks
Answer all the questions
1)
Given below are the interests on advances of a commercial bank (₹ in lakhs)
Performing Assets NPA
Interest Interest Interest Interest
Earned received earned received
Term Loans 120 80 75 5
Cash credits and overdrafts 750 650 150 12
Bills purchased and discounted 150 150 100 20
Find out the income to be recognized for the year ended 31st March, 20X1.
B.
From the following information, find out the amount of provisions to be shown in the profit and Loss Account of AG bank.
₹ in lakhs
Assets
Standard 5000
Sub-standard 4000
Doubt ful : for one year 800
: for three years 600
: for more than three year 200
Loss Assets 1000
Commission on government business 82
Profit on sale of land and building 27
Loss on exchange transactions 52
Interest paid on deposit 27,20
Auditors’ fees and allowances 1,20
C.
The following is an extract from Trial Balance of overseas Bank as at 31st March,20X1
₹ ₹ Bills discounted 12,64,000
Rebate on bills discounted not due
on March 31st, 20X0 22,160 Discount received 1,05,708
An analysis of the bills discounted is as follows:
Amount Due Date20X1 Rate of Discount
₹ %
(i) 1,40,000 June 5 14
(ii) 4,36,000 June 12 14
(iii) 2,82,000 June 25 14
(iv) 4,06,000 June 6 16
Calculate Rebate on Bills Discounted as on 31-3-20X1 and show necessary journal entries.
D
Templeton Finance Ltd. Is a non – banking finance company. It provides the following information:
|
Leased out assets Investment: In shares of subsidiaries and group companies In debentures of subsidiaries and group companies Cash and bank balances Deferred expenditure Paid-up equity capital Free reserves Loans Deposits |
₹ in crores
800
100 100 200 200 100 500 400 400 |
You are required to compute ‘Net owned Fund’ of Templeton Finance Ltd. As per Non-Banking Financial Company – Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank ) Directions,2016
| Commission on government business
Profit on sale of land and building Loss on exchange transactions Interest paid on deposit Auditors’ fees and allowances Director’s fees and allowances Advertisements Salaries, allowances and bonus to employees Payment to Provident fund Printing and stationery Repairs and maintenance Postage, telegrams, telephones |
82
27 52 27,20 1,20 2,50 1,80 12,40 2,80 1,40 50 80 |
Other Information:
(i) Interest on NPA is as follows
Earned (₹’000) Collected(₹’000)
Cash credit 8,20 4,00 Overdraft 450 1,00
Term Loans 750 2,50
(ii) Classification of Non Performing Advances (,000 ₹) Standard 30,00
Sub-standard 11,20
Doubtful assets not covered by security 2,00
Doubtful assets covered by security for one year 50
Loss Assets 2,00
(iii) Investments 27,50
Bank should not keep more than 25% of its investment as ‘held-for-maturity’ investment. The market value of its rest 75% investment is ₹ 19,75,000 as on 31-3-20X1.
5Mark
3) (A)
Peoples Financiers Ltd. Is an NBFC Providing Hire purchase Solutions for acquiring consumer durables
| Asset Funded | Interest Overdue but recognized in
Profit & loss |
Net Book Value
of Assets outstanding |
|
| Period Overdue | Interest Amount | ||
| (₹ in crore) | (₹ in crore) | ||
| LCD Televisions
Washing Machines Refrigerators Air Conditioners |
Upto 12 months
For 24 months For 30 months For 45 months |
480,00
102.00 50.50 26.75 |
20,123.00
2,410.00 1,280.00 647.00 |
You are required to calculate the amount of provision to be made.
2)(A)
A commercial bank has the following capital funds and assets. Segregate the capital funds into Tier I and Tier II capitals. Find out the risk-adjusted asset and risk weighted assets ratio-
Capital Funds: (Figures in Lakhs)
Equity Share Capital 4,80,00
Statutory Reserve 2,80,00
Capital Reserve (of which ₹ 280 lakhs were due 12,10
to revaluation of assets and the balance due to sale)
Assets:
Cash Balance with RBI 4,80
Balance with other Bank 12,50
Claims on Banks 28,50
Other Investments 782,50
Loans and Advances:
(i) Guaranteed by government 128,20
(ii) Guaranteed by public sector 702,10
undertakings of Government of India
(iii) Others 52,02,50
Premise, furniture and fixtures 182,00
Others Assets 201.20
Off-Balance Sheet Items:
Acceptances, endorsements and letters of credit 37,02,50
2) (B) 10 Mark
From the following information, prepare profit and Loss A/c of KC Bank for the year ended 31st March, 20X1:
Items ₹ 000
Interest on cash credit 18,20
Interest on overdraft 7,50
Interest on term loans 15,40
Income on investments 8,40
Interest on balance with RBI 1,50
Commission on remittances and transfer 75
Commission on letters of credit 1,18
3)(B)
A Ltd acquired 1,600 ordinary shares of ₹ 100 each of B Ltd on 1st July, 20X1. On 31st December, 20X1, the balance sheets of the two companies were as given below:
Balance Sheet of A Ltd. And its subsidiary, B Ltd.
as at 31st December, 20X1
| Particulars | Note
No |
A Ltd
(₹) |
B Ltd.
(₹) |
| I Equity and Liabilites
(1) Shareholder’s Funds (a) Share Capital (b) Reserves and Surplus (2) Current Liabilities (a) Trade payable (b) Short term borrowings
Total II Assets
(1) Non-current assets (d)Property, Plant and Equipment (b) Non-current Investments (2) Current assets (a) Inventories (b) Trade receivables (c) Cash & Cash equivalents
Total
|
1 2
3
4 5
6 |
5,00,000 2,97,200
47,100 80,000
|
2,00,000 1,82,000
17,400
|
| 9,24,300
|
3,99,400 | ||
|
3,90,000 3,40,000
1,20,000 59,800 14,500 |
3,15,000 —
36,400 40,000 8,000 |
||
| 9,24,300 | 3,99,400 |
Notes to Accounts
| A Ltd.
₹ |
B. Ltd
₹ |
||
|
1.
2.
3.
4.
5.
6. |
Share Capital
5,000 shares of ₹ 100 each, fully paid up 2,000 shares of ₹ 100 each, fully paid up
Total Reserves and Surplus General Reserves Profit & loss
Total
Short term borrowings Bank overdraft Property plant and equipment Land and building Plant & Machinery
Total Non-current Investments Investment in B Ltd (at cost) Cash & Cash equivalents cash
|
5,00,000 —
5,00,000
2,40,000 57,200
|
— 2,00,000
2,00,000
1,00,000 82,000
|
|
2,97,200 |
1,82,000 |
||
|
80,000
1,50,000 2,40,000
3,90,000
3,40,000
14,500 |
—
1,80,000 1,35,000
3,15,000
—
8,000 |
The profit & Loss Accounts of B Ltd. Showed a credit balance of ₹ 30,000 on 1 st January, 20X1 out of which a dividend of 10% was paid on 1 st August, 20X1; A Ltd. Credited the dividend received to its profit & Loss Account. The plant & Machinery which stood at ₹ 1,50,000 on 1 st January, 20X1 was considered as worth ₹ 1,80,000 on 1 st July, 20X1; this figure is to be considered while consolidating the Balance Sheets. The rate of depreciation on plant & machinery is 10% (computed on the basis of useful lives).
Prepare consolidated Balance Sheet as at 31st December, 20X1.
(A) 10 Mark
X Co. Ltd. Went into voluntary liquidation on 1 st April, 1992. The following balance are extracted from its books on that date:
| ₹ ₹ |
Capital Machinery 90,000
24,000 equity shares Leasehold Properties 1,20,000
of ₹ 10 each 2,40,000 Stock 3,000
Debentures (Secured Debtors 1,50,000
by floating charge) 1,50,000 Investments 18,000
Bank overdraft 54,000 Cash in hand 3,000
Creditors 60,000 Profit & Loss A/c 1,20,000
5,04,000 5,04,000
The following assets are valued as under:
| ₹ | |
| Machinery
Leasehold Properties Investments Stock Debtors |
1,80,000
2,18,000 12,000 6,000 1,40,000 |
The bank overdraft is secured by deposit of title deeds of leasehold properties: There were preferential creditors ₹ 3,000 which were not included in creditors ₹ 60,000
Prepare a statement of affairs to be submitted to the meeting of members/creditors
4) (b)
Bad Luck Ltd. Went into voluntary liquidation on 31 st December, 1992 when is Balance Sheet was as under:
| Liabilities ₹ Assets ₹ |
Share Capital: Freehold Property 5,80,000 6,000 5% Cumulative pref. Plant & Machinery 2,89,000 Shares of ₹ 100 each Motor Vehicles 57,500 Fully paid 6,00,000 Stock 1,86,000 50,000 Equity Shares of Debtors 74,000 ₹ 10 each fully called P & L A/c 2,14,000 (less calls-in-arrear)
Amounting to ₹ 25,000 4,75,000 Share Premium A/c 50,000 5% Debentures 1,00,000 Interest on Debentures 2,500 Bank Overdraft 58.000 Creditors 1,15,000
| 14,00,500 14,00,500 |
The Preference dividends are in arrear from 1 st January, 1989
The company’s articles provide for the repayment to the Preference Shareholders of their capital together with a premium thereon of ₹ 12.50 per share and any arrears of dividend. These sums to be paid in priority to the equity shareholders.
The bank overdraft was guaranteed by the directors who were called upon and duly implemented their guarantee.
The Liquidator realized the assets as follows: Freehold Property ₹ 7,00,000, plant & Machinery ₹ 2,40,000; Motor Vehicles ₹ 59,000; Stock ₹1,50,000; Debtors ₹60,000. He duly collected the call-in-arrear.
Creditors were paid less discount of 5 per cent. The Debentures and accrued interest were repaid on 31 st March, 1993.
Liquidation costs were ₹ 3,750 and the liquidator’s remuncration was 21/2% on the amounts realized.
Prepare the Liquidator’s Statement of Account
5) (A)
Super Express Ltd. And fast Express Ltd. Were in company business. They decided to from a new company named Super Fast Express Ltd. The balance sheets of both the companies were as under:
Super Express Ltd.
Balance Sheet as at 31 st December, 2002
| Liabilities | ₹ | Assets | ₹ |
| 20,000 Equity Share
of ₹ 100 each Provident Fund Sunday Creditors Insurance Reserve
|
20,00,000 1,00,000 60,000 1,00,000 |
Building
Machinery Stock Sunday Debtors Cash at Bank Cash in Hand |
10,00,000
4,00,000 3,00,000 2,40,000 2,20,000 1,00,000 |
| 22,60,000 | 22,60,000 |
Fast Express Ltd.
Balance Sheet as at 31 st December, 2002
| Liabilities | ₹ | Assets | ₹ |
| 10,000 Equity Shares
Of ₹ 100 each Employees Profit sharing Account Sundry Creditors Reserve Account Surplus |
10,00,000
60,000 40,000 1,00,000 1,00,000 |
Goodwill
Building Machinery Stock Sundry Debtors Cash at Bank Cash in hand |
1,00,000
6,00,000 5,00,000 40,000 40,000 10,000 10,000 |
| 13,00,000 | 13,00,000 |
The assets and liabilities of both the companies were taken over by the new company their book values. The companies were allocated equity shares of ₹ 100 each in lieu of purchase consideration.
Prepare opening balance sheet of Super Fast Express Ltd.
5)(B)
Following is the summarized Balance Sheet of Ravi Limited as on 31 st March, 2014.
Balance Sheet as on 31 st March 2014
| Liabilities | Amount
₹ |
Assets | Amount
₹ |
| Authorised and Issued equity share capital:
30,000 shares of ₹ 100 each fully paid 20,000 7% cumulative preference shares of ₹ 100 each fully paid General Reserve Loan from Director Trade Payable Outstanding expenses Proposed dividend
|
30,00,000 20,00,000
6,00,000 4,40,000 24,60,000 3,20,000 3,00,000
|
Patent
Plant & machinery Building
Trade receivables Inventory Cash Bank Balance Profit and Loss account
|
4,00,000
30,00,000 5,50,000
23,50,000 16,30,000 1,20,000 2,30,000
8,40,000
|
|
91,20,000
|
91,20,000 |
Note: The arrears of preference dividend amount to ₹ 2,80,000.
The company had suffered losses since last 3 years due to bad market conditions and hope for a better position in the future.
