NATIONAL MANAGEMENT COLLEGE – PERUNDURAI
CA INTERMEDIATE – 2022-23-P-5 ADVANCED ACCOUNTING
DATE: 25/07/23 TEST NO 2
TIME ALLOWED – 3HOURS MAXIMUM MARKS – 100
Question No 1 compulsory
Answer any 4 from question No 2,3,4,5,6
QUESTION NO.1 15 Marks
The following is an extract from Trial Balance of overseas Bank as at 31 st March, 20X1
₹ ₹
Bills discounted 12,64,000
Rebate on bills discounted not due
On March 31 st, 20X0 22,160
Discount received 1,05,708
An analysis of the bills discounted is as follows:
Amount Due Date 20X1 Rate of Discount
(i) 1,40,000 June 5 (%)
(ii) 4,36,000 June 12 14 (iii) 2,82,000 June 25 14 (iv) 4,06,000 July 6 16
Calculate Rebate on Bills Discounted as on 31-3-20X1 and show necessary journal entries.
(b) 5 Marks
The following information is available in the books of X Bank Limited as on 31st March, 20X2:
Bills discounted
Rebate on Bills discounted (as on 1.4.20X1) Discount received |
1,37,05,000
2,21,600 10,56,650 |
Details of bills discounted are as follows:
Value of bill (₹) | Due date | Rate of Discount |
18,25,000
50,00,000 28,20,000 40,60,000 |
5.6.20X2
12.6.20X2 25.6.20X2 6.7.20X2 |
12%
12% 14% 16% |
Calculate the rebate on bills discounted as on 31.3.20X2 and give necessary journal entries.
QUESTION NO.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
Balances with other Bank 12,50
Other on Banks 28,50
Other Investments 782,50
Loans and Advances
(i) Guaranteed by government 128,20
(ii) Guaranteed by public sector 702,50
Undertaking of Government of India
(iii) Others 52,02,50
Premises, furniture and fixtures 182,00
Other Assets 201,20
Off-Balance Sheet Iterms:
Acceptances, endorsements and letters of credit 37,02,50
(b) (5 Mark)
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 750 620 150 12 Bills Purchased and discounted 150 150 100 20 Find out the income to be recognized for the year ended 31st March, 20X1.
(c) (5 Marks)
Find out the income to be recognized in the case of SS Bank for the year ended 31 st March, 20X1: (₹ in lakhs)
Performing Assets Non-performing Assets | ||||
Interest
accrued |
Interest
received |
Interest
accrued |
Interest
received |
|
Term loans
Cash credits and |
240
1,500 |
160
1,240 |
150
300 |
10
24 |
Questinos 3 (a) (15 Marks)
X Ltd. Was ordered to be would up on 31st March, 20X2 on which date the following balances were extracted from its books:
₹ | |
Goodwill
Building Plant Fixtures Stock Debtors Cash Profit and loss account (Dr. balance) Share Capital: 10,000 equity Shares of ₹ 100 each 5% Debentures (Secured by floating charge on all assets) Interest payable on these debentures Bank overdraft (secured by hypothecation of stock) Creditors |
1,00,000
3,50,000 5,50,000 23,000 38,000 25,000 500 1,38,500 10,00,000 1,60,000 4,000 25,000 36,000 |
The amounts estimated to be realized are: Goodwill ₹ 1,000; Building ₹ 3,00,000; Plant ₹ 5,25,000; Fixtures ₹ 10,000; Stock ₹ 31,000; Debtors ₹ 20,000.
Creditors included ₹ 6,000 on account of wages of 15 men at ₹ 100 per month for 4 months immediately before the date of winding up: ₹ 9,000 being the salaries of 5 employees at ₹ 300 per month for the previous 6 months; Rent for godown for the last six amounting to ₹ 3,000; Income-tax deducted out of salaries of employees ₹ 1,000 and Directors Fees ₹ 500
There years ago, the debit balance in the Profit and Loss Account was ₹ 77,925 and since that date the accounts of the company have shown the following figures:
Year
31-3-20X1 ₹ |
Year
31-3-20X1 ₹ |
Year
31-3-20X2 ₹ |
|
Gross Profit
Wages and Salaries Debentures interest Bad Debts Depreciation Directors’ Fees Miscellaneous Expenses Total |
65,000
40,500 5,750 8,000 6,700 1,000 10,500 80,990 |
45,000
36,000 6,380 8,000
1,000 7,265 66,245 |
40,000
34,400 5,260 8,000
1,000 7,980 63,340 |
In addition it is estimated that the company would have to pay ₹ 5,000 as compensation to an employee for injuries suffered by him which was contingent liability not accepted by the company.
Prepare the Statement of Affairs and the Deficiency account
(b) (5 Mark)
A liquidator is entitled to receive remuneration at 2% on the assets realized, 3% on the amount distributed to Preferential creditors and 3% on the payment made to unsecured creditors. The assets were realized for ₹ 50,00,000 against which payment was made as follows:
Liquidation ₹ 50,000
Secured Creditors ₹ 20,00,000
Preferential Creditors ₹ 1,50,000
The amount due to Unsecured creditors was ₹ 30,00,000
You are asked to calculate the total Remuneration payable to Liquidator. Calculation shall be made to the nearest multiple of a rupee.
Question no. 4
Bright Finance Ltd. Is a non-banking financial company. It provides you with the following information regarding its outstanding amount, ₹ 200 lakhs of which installments are overdue on 200 accounts for last one month (amount overdue ₹ 40 lakhs), on 24 accounts for two months (amount overdue ₹ 24 lakhs), on 10 accounts for more than 30 months (amount overdue ₹ 20 lakhs) and on accounts for more than two years (amount over due ₹ 20 lakhs-already identified as sub-standard assets) and one account of ₹ 10 lakhs which has been identified as non-recoverable by the management. Out of 10 accounts overdue for more than 30 months, 6 accounts are already identified as sub-standard (amount ₹ 6 lakhs) for more than twelve months.
Classify the assets of the company in line with Non-Banking Financial Company –Systemically Important Non-Deposit taking company and Deposit taking Company (Reserve Bank) Directions, 2016.
(b) (5 Mark)
White closing its books of account on 31 st March, a Non-Banking Finance Company has its advances classified as follows:
₹ in lakhs | |
Standard assets
Sub- standard assets Secured portions of doubtful debts: – upto one year – one year to three years – more than three years |
16,800
1,340
320 90 30 |
Unsecured portions of doubtful debts
Loss asset |
97
48 |
Calculate the amount of provisions, which must be made against the Advances as per the Non-Banking Financial Company – Non Systemically Important Non – Deposit taking Company (Reserve Bank) Directions, 2016.
(c) (5 Mark)
Babu Bhai Financiers Ltd. Is an NBFC Providing Hire Purchase Solutions for acquiring consumer durables. The following information is extracted from its books for the year ended 31st March, 20X1:
Assets 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 Mobile Phones |
Up to 12 months
For 24 Months For 30 Months For 45 Months For 60 Months |
500.00
100.00 50.00 25.00 10.00 |
20,000
2,000 1,250 600 100 |
You are required to calculate the amount of provision to be made.
Question No.5 (5 Mark)
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
Doubtful : for one year 800
: for three years 600
: for more than three years 200
Loss Assets 1000
(b) (5 Marks)
From the following information of AY Limited, compute the provisions to be made in the profit and Loss account:
₹ in lakhs | |
Assets
Standard Substandard Doubtful For one year (secured) For two years and three years (secured) For more than three years (secured by mortgage of plant
Loss Assets |
20,000 16,000
6,000 4,000 2000
1,500 |
(c) (5 Mark)
Templeton Finance Ltd. Is a 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 Templetion Finance Ltd. As per Non-Banking Financial Company – Systemically Important Non – Deposit taking Company and Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016.
Question No.6 (a) 5 Mark
The following is an extract Trial Balance of overseas Bank as at 31 st March, 20X1
₹ ₹
Bills discounted 12,64,000
Rebate on bills discounted not due
On March 31 st , 20X0 22,160
Discount received 1,05,708
An analysis of the bills discounted is as follows:
Amount Due Date 20X Rate of Discount
₹
(i) 1,40,000 June 5 (%)
(ii) 4,36,000 June 12 14
(iii) 2,82,000 June 25 14 (iv) 4,06,000 July 6 16
Calculate Rebate on Bills Discounted as on 31-3-20X1 and show necessary journal entries.
(b) 5 Mark
The following information is available in the books of X Bank Limited as on 31st March,
₹ | |
Bill discounted
Rebate on Bills discounted (as on 1.4.20X1) Discount received |
1,37,05,000
2,21,600 10,56,650 |
Details of bills discounted are as follows:
Value of bill (₹) | Due data | Rate of Discount |
18,25,000
50,00,000 28,20,000 40,60,000 |
5.6.20X2
12.6.20X2 25.6.20X2 6.7.20X2 |
12%
12% 14% 16% |
Calculate the rebate on bills discounted as on 31.3.20X2 and give necessary journal entries.
( c) 5 Mark
From the following details prepare “ Acceptances, Endorsements and other Obligation A/c” as would appear in the General Ledger.
On 1.4.20X1 Acceptances not yet satisfied stood at ₹ 22,30,000. Out of which ₹ 20 lacs were subsequently paid off by clients and bank had to honour the rest. A scrutiny of the Acceptance Register (for transactions during the year) revealed the following:
Client Acceptances/Guarantees Remarks:
₹ | ||
A
B C D E F Total |
10,00,000
12,00,000 5,00,000 8,00,000 5,00,000 2,70,000 42,70,000 |
Bank honoured on 10.6.2oX1
Party paid off on 30.9.20X1 Party failed to pay and bank had to honour on 30.11.20X1 Not satisfied upto 31.3.20X2 -do- -do-
|
(d) 5 Mark
Ina liquidation which commenced on April 2, 20X2 certain creditors could not receive payments out of the realization of assets and out of the contributions from “A” list Contributories. The following are the details of certain transfers, which took place in 20X1 and 20X2.
Shareholders | Number of shares
transferred at the date of ceasing to be member |
Date of ceasing
to be member |
Creditors remaining unpaid and
outstanding |
X
A B C D |
1,500
1,000 1,500 300 200 |
1 st March 20X1
1 st May 20X1 1 st July 20X1 1 st Nov. 20X1 1 st Feb. 20X2 |
4,000
6,000 7,500 8,000 9,500 |
All the share were ₹ 10 each, ₹ 6 paid up ignoring expenses of and remuneration to liquidators, etc., show the amount to be realized from the various persons listed above.