Time: 3Hours Marks: 100
NB:
1. Questions No. 1 is compulsory and carries 20 marks.
2. Attempt any five from the rest questions,each carrying 16 marks
from remaining questions.
3. Working notes should form part of your answer.
4.Proper presentation and neatness is essential.
5. Use of simple calculator is allowed
Q.1.
(a) The Balance Sheets of Dinesh Ltd. are as follows: (20)
| Balance sheet as at 31st March, 2005 and 2006. | |||||
|---|---|---|---|---|---|
| Liabilities | 2005 | 2006 | Assets | 2005 | 2006 |
| - | Rs. | Rs. | - | Rs. | Rs. |
| Equity share capital | 3,00,000 | 5,00,000 | Goodwill | 1,10,000 | 90,000 |
| General Reserve | - | 60,000 | Land and Building | 1,60,000 | 1,80,000 |
| Profit and Loss A/c | - | 58,000 | Plant and Machinery | 80,000 | 2,00,000 |
| Debentures | 2,00,000 | - | Stock | 84,000 | 1,06,000 |
| Sundry Creditors | 1,14,000 | 92,000 | Debtors | 1,80,000 | 1,56,000 |
| Bills Payable | 60,000 | 12,000 | Advance Income Tax | - | 40,000 |
| Provision for Income Tax | - | 50,00 | Bills Receivable | 16,000 | 24,000 |
| Proposed Dividend | - | 40,000 | Prepaid Expenses | 12,000 | 8,000 |
| - | - | - | Cash in Hand | 20,000 | 8,000 |
| - | - | - | Profit and Loss A/c | 12,000 | - |
| - | 6,74,000 | 8,12,000 | - | 6,74,000 | 8,12,000 |
Additional Information:
During the year ended 31-03-2006. Depreciation of Rs. 16,000 and Rs. 20,000 have been charged on Land and Building and Plant and Machinery respectively.
An Interim Dividend of Rs. 15,000 was paid during the year ended on 31-03-2006.
During the year Machinery having book-value of Rs. 16,000 was sold for Rs. 14,000.
Prepare cash flow statements by Indirect Method for the year ended 31st March, 2006 as per AS - 3.
Q.2.
Aman and Ram are partners of M/S Aman Ram sharing Profits and Losses in the ratio of 3:2. Their Balance sheet as on 31st March, 2004 was as under: (16)
| Balance sheet as at 31st March, 2005 and 2006. | |||||
|---|---|---|---|---|---|
| Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
| Creditors | - | 15,000 | Bank | - | 14,000 |
| Reserves | - | 10,000 | Cash | - | 3,000 |
| Loan from Sanju | - | 20,000 | Debtors | 29,000 | - |
| Capitals: | - | - | Less: RDD | 1,000 | 28,000 |
| Aman | 30,000 | - | Stock | - | 30,000 |
| Ram | 25,000 | 55,000 | Fixed Assets: | - | - |
| - | - | - | Cost | 35,000 | |
| - | - | - | Less: Depreciation | 10,000 | 25,000 |
| - | - | 1,00,000 | - | - | 1,00,000 |
As they wanted to go in for heavy expansion they decided upon the following, during the year ended 31st March, 2005:
Introduce fresh capital of Rs 20,000; Rs. 5,000 being by Aman and Rs. 20,000 being by Ram.
Admit Sanju as a partner on the following terms:
(a) Aman, Ram and Sanju are to share profits and losses in the ratio of 2:2:1.
(b)Goodwill of the firm is worth Rs. 30,000 but it is privately settled by the partners without bringing it into the books of account of the firm.
(c)Sanju's loan is to be converted into his capital.
(d)Sanju is to bring in a further sum of Rs. 26,000.
M/s Aman purchased on 1st April, 2004 new fixed assets of Rs. 80,000. They sold part of the fixed assets costing Rs. 20,000 on which depreciation provision was Rs. 8,000 for Rs. 10,000. This amount was used to partially finance the purchase of fixed assets. M/s Aman Ram borrowed Rs. 50,000 from Bank of India for the purpose of financing the purchase of fixed assets. Out of this loan Rs. 10,000 was repaid during the year.
Aman, Ram and Sanju withdrew Rs. 16,000, Rs. 15,000 and Rs. 10,000 respectively during the year. You are further informed that the partnership firm tax of Rs. 2,000 was paid during the year. Balance Sheet of the firm as on 31st March, 2005 was as under:
| Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
| Creditors | - | 30,000 | Bank | - | 6,000 |
| Loan from Bank of India | - | 40,000 | Cash | - | 6,000 |
| Capitals: | - | - | Debtors | 60,000 | - |
| Aman | 39,000 | - | Less: RDD | 3,000 | 57,000 |
| Ram | 48,000 | - | Stock | - | 50,000 |
| Sanju | 43,000 | 1,30,000 | Fixed Assets: | - | - |
| - | - | - | Cost | 95,000 | - |
| - | - | - | Less: Depreciation | 14,000 | 81,000 |
| - | - | 2,00,000 | - | - | 2,00,000 |
Prepare a statement showing flow of fund during the year ended 31st March. 2005 along with statement of changes in working capital, together with item wise changes in working capital.
Q.3.
While preparing the financial statements for the year ended 31-3-2005 of XYZ Ltd., it was discovered that a substantial portion of the records were missing. However, the accountant was able to gather the following data: (16)
| Liabilities | Rs. | Rs. | Assets | Rs. | Rs. |
| Paid-up Share Capital | - | - | Land | - | 3,60,000 |
| 60,000 Equity shares of Rs. 10 | - | 6,00,000 | Plant and Machinery: | - | - |
| each) | - | - | Cost | 9,00,000 | - |
| Reserves and Surplus: | - | - | (-) Depreciation | 3,60,000 | 5,40,000 |
| Balance on 1-4-04 | 1,80,000 | - | Current Assets: | - | - |
| + Transfer during the year | 1,20,000 | 3,00,000 | Stock | ? | - |
| 10% Loan | - | 6,00,000 | Debtors | ? | - |
| Current Liabilities: | - | - | Cash and Bank | ? | - |
| Proposed Dividend | ? | - | - | - | - |
| Provision for Tax | ? | - | - | - | - |
| Creditors | ? | 6,00,000 | - | - | - |
| - | Total | ? | - | Total | ? |
The following other information is available:
| Current Ratio | 2:1 |
| Cash and Bank | 30% of Total Current Assets |
| Debtors Turnover (Sales/Debtors) | 12 Times |
| Stock Turnover (Cost of Goods Sold/Stock) | 12 Times |
| Creditors Turnover (Cost of goods Sold/Creditors) | 12 Times |
| Gross Profit Ratio on Sales | 25% |
| Proposed Dividend | 20% |
You are required to complete the Balance Sheet as on 31-03-2005 with available information, working notes shall form part of your answer.
Q.4.
From the following Balance Sheet, prepare Vertical balance sheet which is suitable for analysis and calculate TrendPercentages taking 2003 as base year and comment on it. (16)
| Balance Sheets as at 31st December | |||
|---|---|---|---|
| Particular | 2005 Rs. | 2004 Rs. | 2003 Rs. |
| Share Capital | 50,000 | 50,000 | 50,000 |
| Reserve and Surplus | 5,000 | 10,000 | 10,000 |
| Secured Loan | 3,00 | 5,000 | 5,000 |
| Unsecured Loan | 2,000 | - | 6,000 |
| Current liabilities | 5,000 | 5,000 | 4,000 |
| - | 65,000 | 70,000 | 75,000 |
| Particular | 2005 Rs. | 2004 Rs. | 2003 Rs. |
| Fixed Assets (Net) | 40,000 | 45,000 | 50,000 |
| Investment | 5,000 | 7,500 | 10,000 |
| Stock | 7,000 | 6,000 | 5,000 |
| Debtors | 10,000 | 9,000 | 7,000 |
| Cash | 3,000 | 2,500 | 3,000 |
| - | 65,000 | 70,000 | 75,000 |
Q.5.
From the information giver, below prepare Balance sheet in a vertical form, suitable for analysis and calculate the following ratios: (16)
1. Capital Gearing Ratio.
2. ProDrietory Ratio.
3. Current Ratio.
4. Liquid Ratio.
5. Stock of Working Capital.
| Particulars | (Rs.) | Particulars | (Rs.) |
| Cash at Bank | 12,500 | Land and Building | 2,00,000 |
| Expenses paid in Advance | 15,500 | Stock | 68,250 |
| Creditors | 1,01,500 | Debtors | 1,30,750 |
| Bills Receivable | 5,250 | Plant and Machinery | 1,36,000 |
| 12% Debentures | 62,500 | Loan from Director | 1,00,000 |
| Equity Share Capital | 2,50,000 | (Repayable after three years) | - |
| P & L A/c (Cr.) | 54,250 | - | - |
Q.6.
The following are the Balancesheets of Hayat Ltd. for the year ending 31st March, 2004 and 2005. (16)
| Liabilities | 31-3-04 Rs. | 31-3-05 Rs. | Assets | 31-3-04 Rs. | 31-3-05 Rs. | |
| Equity share capital | 4,00,000 | 4,00,000 | Fixed assets | less depreciation | 4,80,000 | 9,20,000 |
| Preference share capital | 2,00,000 | 2,00,000 | Stock | 80,000 | 40,000 | |
| Reserves | 40,000 | 60,000 | Debtors | 2,00,000 | 1,50,000 | |
| Profit and loss account | 30,000 | 40,000 | Bills receivable | 40,000 | 60,000 | |
| Bank overdraft | 1,00,000 | 4,60,000 | Prepaid expenses | 20,000 | 24,000 | |
| Creditors | 80,000 | 1,00,000 | Cash at bank | 1,00,000 | 1,66,000 | |
| Provision for taxation | 40,000 | 50,000 | - | - | - | |
| Proposed Dividend | 30,000 | 50,000 | - | - | - | |
| - | 9,20,000 | 13,60,000 | - | 9,20,000 | 13,60,000 |
From the above prepare Vertical Balance Sheet suitable for analysis and do Horizontal comparison showing absolute Increase/Decrease and Percentage.
Q.7.
(a) On the morning of 31st December, 2005, the business had stock costing Rs. 50,000, Debtors Rs. 1,70,000, creditors Rs. 1,90,000 and cash at Bank Rs. 50,000. On that day the business has the following transactions: (16)
Purchased goods for cash Rs. 5,000 and credit Rs. 20,000.
Sale of Goods for cash Rs. 25,000 (cost of Goods Sold Rs. 20,000).
Collection from Debtors Rs. 45,000.
Paid Rent for Jan. and Feb. 2006 in advance Rs. 20,000.
Payments to creditors Rs. 1,00,000.
All receipts and payments are by cheques.
You are required to compute on the morning and evening of 31st December, 2005,
(i) Current Ratio.
(ii)Acid Test Ratio.
(b) Stock Turnover of X Ltd. is 8 times. (4)
Sales for the year are Rs. 5,00,000 and Gross Profit Ratio is 25% on cost.
Closing Stock is Rs. 10,000 more than Opening Stock
Find out closing stock.
Q.8.
A company plans to manufacture and sell 400 units of domestic appliances per month at price of Rs. 600 each forthe calendar year 2007. The ratio of cost of selling price are as follows: (16)
| particulars | % of selling price |
| Raw material | 30 |
| Packing material | 20 |
| Direct lab our | 15 |
| Direct expenses | 5 |
Fixed overhead are estimated at Rs. 4,32,000 per annum.
Stock were maintained as per following.
| Raw material | 30 days |
| Packing material | 15 days |
| Work in progress | 7 days |
| Finished goods | 200 Units |
Following additional information is given:
Credit sales represent 80% and customers enjoy 30 working days credit. Balance 20% are cash sales.
Creditors allow 21 working days credit for payment.
Lag in payment in overhead and expenses is 15 working days.
Cash requirements to be 12% of net working capital excluding cash.
Working days in a year are taken as 300.
Prepare working capital requirement for the year 2007.
Q.9.
Write short notes on any four: (16)
(a) Classification Assets.
(b) Drawbacks of comparative statements in Interpretation of final accounts.
(c) Selection of Accounting Software.
(d) MIS.
(e) Explain "Fund" and "Flow of Funds".
(f) Consequences of Inadequate working capital.
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