Advance Financial Accounting
2012 (November)
Commerce (Speciality)
Course: 301: Advance Financial Accounting)
Full Marks: 80
Pass Marks: 32
The figures in the margin indicate full marks for the questions.
1. (a) Choose the correct
answer: 1x3=3
(i) Banking Companies are governed by the
Banking Regulations Act, 1947/1948/1949.
(ii) The valuation balance sheet is prepared
by the general insurance companies/the life insurance companies/ both general
and life insurance companies.
(iii) Accounting for price level changes is
popularly known as Inflation Accounting/Deflation Accounting.
(b) Fill in the blanks: 1x3=3
(i) In case of
cum-interest, interest is _________ in the quoted price.
(ii) The
Provincial Insolvency Act was enacted in the year ________________.
(iii) In case
of Banking Companies Accounts, Contingent liabilities are shown under schedule
__________.
(c) Write “True” or “False”: 1x2=2
(i) The investments which are made permanently
for a regular income outside the business are known as trade investments.
(ii) Rebate in bills discounted is treated as
a liability, if it is given in the trial balance.
2. Write brief answers (within
150 words): 4x4=16
(a) Explain the
procedure of preparation of the valuation balance sheet.
(b) What are
the lists to be prepared under the insolvency act?
(c) Explain
clearly the accounting for price level changes under the CPP method.
(d) Distinguish
cum-dividend and cum-interest from ex-dividend and ex-interest.
3. (a) From the following
information relating to YES Bank Ltd,. Prepare a Profit and Loss Account for
the year ended 31st March. 2012. Prepare under necessary schedules: 12
|
Particulars
|
Amount (In’000)
|
|
Interest/Discount
on advances /bills
Income from
investments
Interest
from RBI
Commission,
Exchange and brokerage
Profit on
sale of investments
Depreciation
on bank property
Director’s
fees, allowance and expenses
Auditor’s
fees and expenses
Legal
Charges
Postage and
Telegram
Interest on
deposits
Interest to
RBI
Payments to
employees
Rent, Taxes
and lighting
Printing
and stationery
Advertisement
and Publicity
Repairs and
maintenance
Insurance
Other
Expenditure
Balance of
Profit and Loss Account B/F
|
1,58,140
59,050
21,215
14,535
570
1,460
35
205
110
1,560
1,57,020
16,810
48,585
4,775
1,065
435
455
4,575
4,420
7,620
|
Following adjustments are to be
made:
(i) Provide for
Income tax (Including surcharge) @51.75%
(ii) Every year
the bank transfers 20% of profit to statutory reserve and 5% of profit to
revenue reserve
(iii) Dividends
amounting to Rs. 10,00,000 for the year ended 31st march, 20123 are
proposed by the board of directors
Or
(b) Explain the following in
respect to the Banking companies accounts: 4x3=12
(i) Books
maintained by a bank
(ii) Cash
Credit and overdraft
(iii) Rebate on
bills discounted
4. (a) The revenue account of
life insurance corporation shows the life fund at Rs.40,94,250 as on 31st
march, 2012 before taking into consideration the under mentioned items:
Consideration
for annuities granted: 21,750
Agents
allowance: 15,750
Reinsurance
premium: 26,250
Bonus in
reduction of premium: 15,000
Outstanding
premium: 35, 250
Pass necessary journal entries
regarding the above transactions and show the correct position of the life fund
at the end of the year, 2011-12 11
Or
(b) What is the life insurance
revenue account? How do you prepare it? 4+7=11
5. (a) Assets of Mr. K. Deka of
Guwahati on 30th june, 2011 as shown by his books were Rs.28,000 and
his liabilities were Rs.22,000. He filed his petition in the insolvency court
and estimated his deficiency to be Rs. 15,000. After making the above estimate,
he found that the following items were not passed through his books of
accounts:
Interest @ 6%
on his capital. a contingent liability of Rs.1,250 on bills discounted by him
for Rs. 5,000. Amount due as wages – Rs.300; salary – Rs.200; Rent – Rs.100 and
Taxes – Rs.150.
Prepare a
statement of affairs and the deficiency account. 12
Or
(b) Who are preferential creditors
under the provincial insolvency act? Distinguish between statement of affairs
and balance sheet. 4+8=12
6. (a) On 1.1.2010, 6% 200
debentures of Rs.100 each of B Ltd. were held as investment by A Ltd. at a cost
of Rs.18,200. Interest is payable on 31st December.
On 1.4.2010,
Rs.4,000 of such debentures were purchased by A Ltd. @ Rs.98 each and on
1.1.2010, Rs.6,000 debentures were sold at Rs.96 ex-interest. On 1.12.2010, Rs.
8,000 debentures were sold @ Rs.99 cum-interest. On 31.12.2010, A Ltd. sold Rs.
10,000 debentures @ Rs.95 each.
Prepare
investment account for 6% debentures of B. Ltd. in the books of A Ltd. Ignore
income tax. 10
Or
(b) Define the following: 5+5=10
(i) Jobbers and
Brokers
(ii) Contango
and Backwardation
7. (a) State the accounting
principles to be followed while preparing inflation adjusted profit & loss
account and inflation adjusted balance sheet. 11
Or
(b) Define Inflation Accounting.
What are the limitations of Inflation Accounting? 4+7=11
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