Q-1

Rohan Ltd. gives you following information as at 31st March, 2022:

Particulars Rs. Rs.

Equity and Liabilities

Issued & subscribed capital:

Equity shares capital:

60,000 Equity shares of Rs. 10 each fully paid up 6,00,000

12% Redeemable Preference share Capital:

5,000 shares of Rs. 100 each 5,00,000

Less: Calls in arrear (4,000) 4,96,000 10,96,000

(final call of Rs. 20 on 200 shares)

Reserve & surplus

Profit and Loss Account 3,00,000

Securities Premium Account 30,000 3,30,000

Non- current liability

Long term borrowings: 14% Debentures 1,50,000

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Current liabilities

Trade payables 74,000

Assets

Non-current Assets

(i) Property, Plant & Equipment 13,00,000

(ii) Non- current Investment 1,00,000

Current Assets

(i) Inventory 50,000

(ii) Trade Receivables 20,000

(iii) Bank 1,80,000

On April 1, 2022, the Board of Directors decided to redeem the preference shares (excluding
200 shares on which there are calls in arrear) at 10% premium and to sell the investment at
its market price of Rs. 80,000. They also decided to issue sufficient number of equity shares
of Rs. 10 at a premium of Rs. 1 per share and the balance in profit and loss account was to
be maintained at Rs. 1, 00,000. Premium on redemption can’t be set off against securities
premium account as Rohan Ltd. is governed by section 133 of the Companies act, 2013 and
comply with Accounting Standards. You are required to show the journal entries and the
balance sheet of the company immediately after completion of redemption as per Schedule
III. Show working for availability of profits for redemption and determination of bank

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balance at the end. All the above formalities and transactions were completed up to the end
of 15th May, 2022.

(8 Marks)

Q-2

On 1st April, 2022, the following balances appeared in the books of Globe Limited (an
unlisted company other than AIFI, Banking Company, NBFC and HFC):

(i) 50,000 9% Debentures of Rs. 100 each issued at par

(ii) Balance of Debenture Redemption Reserve (DRR) Rs. 5,00,000.

(iii) Debenture Redemption Reserve (DRR) Investment Rs. 5,00,000 represented by 8.75%
Secured Bonds of the Government of India of Rs. 100 each.

Interest on Debentures was paid half- yearly on 30th of September and 31st March every
year. On 31st May, 2022, the company purchased 8,000 Debentures of its own @ 98 (ex-
interest) per debenture and cancelled them on the same date.

On 1st January, 2023, it further acquired another 10,000 own Debentures @ Rs. 101 (cum -
interest) per debenture and cancelled them on the same date.

The funds required for purchasing the aforesaid debentures were partly raised by selling off
the DRR Investment.

On 30th March, 2023, the remaining investments were realized at par and the Debentures
were redeemed on 31st March, 2023.

You are required to prepare the following accounts for the year ended 31 st March, 2023:

(1) 9% Debentures Account.

(2) Debenture Redemption Reserve Account.

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(3) Debenture Redemption Reserve Investment Account.

(4) Interest on Debentures Account.

(8 Marks)

Q-3

Mr. Brown has made following transactions during the financial year 2021-22:

Date Particulars

01.05.2021 Purchased 24,000 12% Bonds of Rs. 100 each at Rs. 84 cum-interest.

Interest is payable on 30th September and 31st March every year.

15.06.2021 Purchased 1,50,000 equity shares of Rs. 10 each in Alpha Limited for Rs. 25
each through a broker, who charged brokerage @ 2%.

10.07.2021 Purchased 60,000 equity shares of Rs. 10 each in Beeta Limited for Rs. 44 each
through a broker, who charged brokerage @2%.

14.10.2021 Alpha Limited made a bonus issue of two shares for every three shares held

31.10.2021 Sold 80,000 shares in Alpha Limited for Rs. 22 each.

01.01.2022 Received 15% interim dividend on equity shares of Alpha Limited.

15.01.2022 Beeta Limited made a right issue of one equity share for every four shares
held at Rs. 5 per share. Mr. Brown exercised his option for 40% of his
entitlements and sold the balance rights in the market at Rs. 2.25 per share.

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01.03.2022 Sold 15,000 12% Bonds at Rs. 90 ex-interest

15.03.2022 Received 18% interim dividend on equity shares of Beeta Limited. Interest on
12% Bonds was duly received on due dates.

Prepare separate investment account for 12% Bonds, Equity Shares of Alpha Limited and
Equity Shares of Beeta Limited in the books of Mr. Brown for the year ended on 31 st March,
2022.

(10 Marks)

Q-4

A fire engulfed the premises of a business of M/s Kite in the morning, of 1st October, 2022.
The entire stock was destroyed except, stock salvaged of Rs. 50,000. Insurance Policy was
for Rs. 5, 00,000 with average clause.

Stock in hand on 31st March, 2022 = Rs. 3,50,000

The following information was obtained from the records saved for the period from 1st April
to 30th September, 2022:

Particulars Rs.

Sales 27,75,000

Purchases 18,75,000

Carriage inward 35,000

Carriage outward 20,000

Wages 40,000

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Salaries 50,000

Additional Information:

(1) Sales upto 30th September, 2022, includes Rs. 75,000 for which goods had not been
dispatched.

(2) On 1st June, 2022, goods worth Rs. 1, 98,000 sold to Hari on approval basis which was
included in sales but no approval has been received in respect of 2/3rd of the goods sold to
him till 30th September, 2022.

(3) Purchases up to 30th September, 2022 did not include Rs. 1, 00,000 for which purchase
invoices had not been received from suppliers, though goods have been received in
godown.

(4) Past records show the gross profit rate of 25% on sales.

You are required to prepare the statement of claim for loss of stock for submission to the
Insurance Company.

(6 Marks)

Q-5

A fire occurred in the premises of M/s Bright on 25 th May, 2022. As a result of fire, sales
were adversely affected up to 30th September, 2022. The firm had taken Loss of profit policy
(with an average clause) for Rs. 3, 50,000 having indemnity period of 5 months. There is an
upward trend of 10% in sales.

The firm incurred an additional expenditure of Rs. 30,000 to maintain the sales.

There was a saving of Rs. 5,000 in the insured standing charges.

Actual turnover from 25th May, 2022 to 30th September, 2022 Rs. 1,75,000

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Turnover from 25th May, 2021 to 30th September, 2021 Rs. 6,00,000

Net profit for last financial year Rs. 2,00,000

Insured standing charges for the last financial year Rs. 1,75,000

Total standing charges for the last financial year Rs. 3,00,000

Turnover for the last financial year Rs. 15,00,000

Turnover for one year from 25th May, 2021 to 24th May, 2022 Rs. 14,00,000

You are required to calculate the loss of profit claim amount, assuming that entire sales
during the interrupted period were due to additional expenses.

(8 Marks)

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