: 1

Roll No..........................

Time allowed : 3 hours Maximum marks : 100

Total number of questions : 8 Total number of printed pages : 12

NOTE : All working notes should be shown distinctly.

(Answer Question No.1 which is compulsory
and any two of the rest from this part.)

1. Attempt any four of the following :
(i) Explain ‘events occurring after the balance sheet date’
as per Accounting Standard-4 (Revised).
(ii) Who are responsible for the maintenance of books of
account under the Companies Act, 1956 ?
(iii) What are the obligations of merchant bankers with
regard to disclosure required to be made to the
Securities and Exchange Board of India ?
(iv) Write a note on ‘accounting application’ using Data
Base Management System (DBMS).
(v) Enumerate the distinguishing features of ‘pooling of
interest method’ and ‘purchase method’ of accounting
for amalgamation.
(5 marks each)

2. (a) The life assurance fund of Super Life Assurance
Company had a balance of Rs.3.80 crore on 31st March,
2005. The actuarial valuation carried out on the same
date revealed a net liability of Rs.2.60 crore. During
the previous three years, an interim bonus of Rs.30
lakh was paid to the policyholders.
The company now proposes to carry forward Rs.50
lakh, the balance being divided between the
policyholders and shareholders as per the applicable
statutory provisions.

1/2006/CACMA P. T. O.

’000) Issued and paid-up capital : 3. 2005 : Liabilities (Rs.065 1/2006/CACMA Contd..200 Sundry debtors 590 Cash and bank balance 575 6.00.222 : 2 : You are required to show the following : (i) Valuation balance sheet.560 6.000 General reserve 100 Securities premium 5 10% Debentures 1. .10 each 3.000 Equity shares of Rs. as on 31st March. (5 marks) (b) Following is the balance sheet of Danny Ltd.065 Assets Land and building 630 Plant and machinery 2.350 Furniture and fittings 350 Investments 370 Stock 1.. (ii) Net profit for the three-year period.400 Sundry creditors 1. and (iii) Distribution of profit.

100 each. O. the shareholders of the company have approved the scheme of buy-back of equity shares as under : (i) 15% of the equity shares would be bought-back at Rs.100 each. redeemable at par. (ii) Balance in the general reserve and securities premium account may be utilised to the fullest extent for this purpose. 9% debentures of Rs. Pass the journal entries to record the above transactions and prepare the balance sheet of the company immediately after the buy-back of shares. (iii) Issue 12% redeemable preference shares of Rs. 3.000. (iv) Issue at 10% discount. (ii) Issue at 10% premium.000. 4. redeemable at par.100 each.000. redeemable at premium of 5%. 10% debentures of Rs. 8% debentures of Rs. Also give journal entry in case of (iv) above at the time of redemption of debentures. : 3 : 222 On 1st April. 2005. 2. (5 marks) 1/2006/CACMA P. (Note: Narrations need not be given). (iii) Issue at par. T. redeemable at premium of 5%. 2.100 each.000. (10 marks) 3. (a) Journalise the following transactions : (i) Issue at 10% discount.10 each as per the requirements. 9% debentures of Rs.11 per share. .

000 35.00.500 Cash and bank balances 4.50.6. were Rs. after charging debenture interest.000 1.000 Stock 7.00.4. 2003-04 and 2004-05.000 Sundry creditors 4. 2005 : Liabilities Rs. fully paid-up 3.500 Assets Goodwill 1.78.000 Equity shares of Rs. fully paid-up 13.78.000 Free-hold property 7.98.. Rs.00. 3. 6% Preference shares of Rs.. 1/2006/CACMA Contd.000 Profit and loss account Plant and machinery less depreciation 7.000 and Rs.000 respectively.500 35.10 each.100 each.500 The following are additional information : (i) The profit after tax for the three financial years 2002-03.000 Debtors (net) 7.80.000 8% Debentures 6.000.222 : 4 : (b) Following is the summarised balance sheet of Royal Ltd. as on 31st March.00. . (ii) The normal rate of return is 10% on the net assets attributed.30.00.90.

500 against the company is to be provided and adjusted against profit for the financial year ended on 31st March. : 5 : 222 (iii) The value of freehold property is to be ascertained on the basis of 8% return. 9% mortgage debentures of Rs. offered to the public 5. (ix) Capital employed may be taken as on 31st March. (viii) Goodwill may be calculated at 3 times adjusted average profits of the 3 years. The current rental value is Rs. (10 marks) 4.800. 2005. T.00. (5 marks) 1/2006/CACMA P.000 debentures which were allotted.1. (v) 10% of profits for the financial year 2003-04 referred to above arose from a transaction of non-recurring nature.500 on sundry debtors was made in the financial year 2004-05 which is no longer required. O.31.000. profit for the year 2004-05 is to be adjusted for this item. (a) Abrol Ltd. (vii) A claim of Rs. . You are required to ascertain the value of goodwill of the company.16. (iv) The rate of tax applicable is 40%. Show the balance sheet of the company. Applications were received from public for 4.100 each at Rs. 2005. (vi) A provision of Rs.105 and 80% of the issue was underwritten by Smart Bulls for maximum commission allowed by law.

000 Investments 1.10 each.60.222 : 6 : (b) Jai Ltd.000. fully paid-up 9.000 1.55. for Rs.30..000 30.000 25. .50.00.000 General reserves 1.000 3.55.000 2.000 Bills payable 40.000 on 1st July.000 3.000 40.000 12.. (ii) Profit earned by Hind Ltd.000 Cash at bank 90.000 Assets Machinery 7..) Equity shares of Rs. for the year ended 31st March.000 20.000 Additional information: (i) General reserve appearing in the balance sheet of Hind Ltd.000 — Stock 1.000 Profit and loss account 80.65. 2004. (Rs. 1/2006/CACMA Contd.000 Bills receivable 25.00. has remained unchanged since 31st March.000 20.000 Debtors 60.000 70.20.50. acquired 15.000 50.000 35.) (Rs..65.000 shares in Hind Ltd.000 40.1.00. 2005 were as follows : Liabilities Jai Ltd. 2005 amounted to Rs.30.000 12.00. Hind Ltd. 2004.000 Furniture 1. The balance sheet of the two companies as on 31st March.000 Creditors 50.

There was no unsold stock with Hind Ltd. goods costing Rs. (5 marks) (ii) The following details are available from the books of Ruby Engineering Works Ltd. 2005.000 were those which were accepted in favour of Jai Ltd. 2005.) 5. sold to Hind Ltd.’s acceptance. 2005. Rs. Jai Ltd. creditors of Hind Ltd.000 for Rs. include Rs. (iv) Out of Hind Ltd. Per Unit) 30 Normal usage (Units Per Month) 100 Maximum usage (Units Per Month) 150 Minimum usage (Units Per Month) 50 Re-order period (Weeks) 4–6 1/2006/CACMA P. You are required to draw a consolidated balance sheet as on 31st March. . on 31st March. : 7 : 222 (iii) On 1st February. on account of these goods.10. However.000 due to Jai Ltd. T. for the year ended 31st March. O.) 200 Annual carrying cost (Rs.000 Cost of placing an order (Rs.5 which is compulsory and any two of the rest from this part.7.4. Attempt any four of the following : (i) Mention the various tools and techniques of ‘management accounting’.8.000. (10 marks) PART—B (Answer Question No. 2005 : Monthly demand (Units) 2.

000 100% varying Labour costs 1.222 : 8 : Based on the above details. (5 marks) (v) A firm had Rs.000 units.000 100% varying Power 12.50.) Material costs 2.00.000 100% varying Inspection 5.000 units and 6.00.000 75% varying Stores 10.500 80% varying Repairs and maintenance 20.000 25% varying Selling overheads 30.2. The consumer price index on that date 1/2006/CACMA Contd. the individual expenses vary as indicated under ‘B’ below : Particulars ‘A’ ‘B’ (Rs. and – Maximum level. (5 marks) (iv) Mention any four centres (except investment centre) classified under responsibility accounting..000 50% varying Find out the unit cost of product under each individual expenses at budgeted production levels of 4. Explain investment centre in detail. – Re-order level.000 100% fixed Administrative overheads 50.50. 2004. .000 units is given under ‘A’ below. (5 marks) (iii) The cost of a product at capacity level of 5.000 as cash at bank on 1st April.. Assume 52 weeks in a year. – Minimum level.000 20% varying Depreciation 1. calculate –– – Re-order quantity. For a variation in capacity above or below this level.

2005 : Material 12.000 Production report shows following results : Units completed 1.000 Units in process on 31st July.000 230 Payments 15th September Cost 2.000 Cost of materials used during the month 51. During the year ended 31st March. 2005.000 225 20th March Cost 1. 2005 (All materials used.45.00.000 Cost records : Rs.000 210 15th January Sales 3.000 Total cost to be accounted for 1.60. Index 1st June Sales 1.000 New units started in process 1.200 Cost of labour for the month 30.000 Cost of overheads during the month 30. . 2005 (All materials used. O.000 2.15. 2005 : Units in process as on 30th June.00.000 Overheads 2.000 16. The year end index was 240. 25% completed for labour and overheads) 40. (5 marks) 6.50. T. 33 31 % completed for labour and overheads) 60.40. the receipts and payments were as stated below : Receipts Rs. The following information is available regarding process ‘Q’ for the month of July.05. : 9 : 222 was 200. Work-in-process as on 30th June.000 240 Ascertain the profit or loss on account of price changes.27.000 Labour 2.000 215 1st December Cost 2.200 1/2006/CACMA P.

Cr..85. (ii) Direct wages absorbed : Rs. .65.000 1.000 To Purchases 3..20.000 To Direct wages 1. 1/2006/CACMA Contd.000 17. 2005 stood as under : Dr.000 To Administrative and By Gross profit b/d 1.000.600 To Net profit 80. Rs.80.000 17.000 selling expenses 89. (15 marks) To Opening stock 10. (a) The audited profit and loss account of Rex Ltd.222 : 10 : Presuming that average method of inventory costing is used.000 By Closing stock 3.000 The following additional information are available from the cost records of the company : (i) Balance stock : Rs.70. for the year ended 31st March.400 1.000 By Sales To Factory overheads 90. prepare — (i) Statement of equivalent production.70. (iv) Process account for process ‘Q’. (iii) Statement of apportionment of cost.3. (ii) Statement showing cost for each element.000 To Gross profit c/d 1. (iii) Factory overheads absorbed : Rs. Rs.

prepare a statement showing reconciliation of cost and financial accounts.000 3.40 Total debt to owner’s equity = 0.000 2.2005 (Rs. (5 marks) (b) The following are the balance sheets in condensed form of Modern Ltd.00.) (Rs. 8% Debentures 4.000 4. From the above information. (a) Distinguish between ‘standard costing’ and ‘budgetary control’.50.2004 31.000 27.75.000 Reserve for contingencies 3.000 Outstanding expenses 65. : Liabilities and Capital As on As on 31.00.000 1/2006/CACMA P.15.000 60. : 11 : 222 (iv) Administrative and selling expenses absorbed @ 7% of sale value.50.000 3.60 Fixed assets to owners’ equity = 0.) Sundry creditors 5.1 lakh provides the following ratios : Short term debt to total debt = 0. (5 marks) (b) A firm having owner’s equity of Rs.000 Profit and loss account 80.15.60 Total assets turnover = 2 times Inventory turnover = 8 times From the above information. T.000 Depreciation fund 2.000 Equity share capital 11.000 1.000 11.000 draw a balance sheet of the firm.50. (10 marks) 8. O.3. .

000 Land and buildings 7..2004 31. 2005 in accordance with Accounting Standard-3 (Revised).000 27.96 for a debenture of Rs.80.000 10..000.75.000 Sundry debtors 3.50.2005 (Rs.60.000 investments were sold at book value.000 was purchased.000 26. (ii) New machinery for Rs.) (Rs.60.1. (iii) Rs.000 4. 8% debentures were redeemed through open market purchase @ Rs. (iv) Rs. You are required to prepare a cash flow statement for the year ended 31st March.000 Prepaid expenses 5.000 The following information are also available : (i) 10% Dividend in cash.50.000 Machinery 2.60.222 : 12 : Assets As on As on 31.000 5.00.50. but old machinery costing Rs.000 3.15.000 was sold for Rs. (10 marks) ——o—— 1/2006/CACMA Contd.35.1. .10.) Cash and bank balances 4. Accumulated depreciation thereon was Rs.000 Temporary investments 2.000 Stock in trade