AFA QP (2) (1)

MCOSC-1.
1A/C
Sl.No. : Total No. of Pages : 4
I Semester M.Com. Degree Examination, May/June - 2023
(CBCS, SLM Scheme)
COMMERCE
Course - I : Advanced Financial Accounting
Time : 3 Hours Max. Marks : 80

SECTION - A
Answer any Four questions. Each question carries Five marks. [4×5=20]
Q1) List out the differences between departmental accounts and branch accounts.
Q2) What is goodwill? List out the circumstances for valuation of goodwill.
Q3) Write a note on purchase consideration.
Q4) Briefly explain the provisions for the calculation of managerial remuneration.
Q5) Distinguish between gross liability and net liability of underwriters.
Q6) Write a short note on voluntary winding up of a company.
SECTION - B
Answer any three questions. Each question carries 10 marks. [3×10=30]
Q7) Explain the general instructions to be followed for preparing balance sheet and
statement of profit and loss of a company as per Co. Act, 2013.
Q8) What is meant by bonus issue? Explain its related provisions as per Companies
Act, 2013.
OA-386 -1- P.T.O.

MCOSC-1.1A/C
Q9) Following is the Balance sheet of Maruthi Ltd. as on 31-3-2021.
Liabilities ` Assets `
Share Capital: Goodwill 20,000
25,000 equity shares of ` 10 each 2,50,000 Machinery 1,70,000
General Reserve 50,000 Buildings 60,000
P&L Account 50,000 Investments 25,000
Sundry Creditors 50,000 Stock 40,000
Sundry Debtors 60,000
Bank 15,000
Preliminary Expenses 10,000
4,00,000 4,00,000
On 31-3-2021, Goodwill is valued at ` 35,000 and buildings at ` 80,000. Machinery
is to be depreciated by ` 10,000, stock is worth of ` 45,000 and debtors are
expected to realize ` 50,000.
The net profit earned by the company amounted to ` 30,000 in 2019, ` 20,000 in
2020 and ` 25,000 in 2021, Every year 20% of profit earned was transferred to
General Reserve. A return of 10% on the investments is considered to be fair in the
industry.
Compute the value of company’s share by:
a) Net Assets method.
b) Yield method (Ignore Tax).
c) Fair value method.
Q10)Nithin Ltd. issued 2,50,000 shares of ` 10 each which was underwritten as follows.
Mr. A - 75,000 shares (Firm underwriting 8000 shares)
Mr. B - 62,500 shares (Firm underwriting 12000 shares)
Mr. C - 62,500, shares (Firm underwriting Nil)
Mr. D - 50,000 shares (Firm underwriting 30000 shares)
The total applications excluding firm underwriting but including marked
applications were for 90,000 shares.
The marked applications were as under:
Mr. A - 20,000 shares; Mr. B - 18,000 shares; Mr. C - 12,000 shares and Mr.
D - 24,000 shares calculate the net liability of each underwriter treating:
a) Firm underwriting as marked applications and.
b) Firm underwriting as unmarked applications.
OA-386 -2-
MCOSC-1.1A/C
Q11)The directors of Televista Limited, Trivandrum, wants to ascertain the net profits of
TV, Tape recorders and transistors department separately, for the quarter ended
March 31, 2020 on the basis of an adequate system of departmental accounting in
use, it is estimated that the normal rate of gross profit for the departments
concerned are 40% 30% and 20% respectively on turnover. Indirect expenses are
charged in proportion to the departmental turnover.
The following are the figures for each department.
TV Tape recorders Transistors
Stock on Jan 1, 2020 60,000 70,000 30,000
Purchase of March 31, 2020 70,000 75,000 47,000
Sales to March 31, 2020 1,20,000 1,00,000 60,000
Direct Expenses 20,200 14,500 7,100
Total indirect expenses for the period (including those relating to other
departments) were ` 42,000 on a total sales of ` 8,40,000.
Prepare the Departmental Trading and Profit and loss account to ascertain
gross profit and net profit after making reserve for stock at 10% in respect of
each department.
SECTION - C
Answer any two questions. Each question carries 15 marks. [2×15=30]
Q12)What is internal reconstruction? Explain the various forms and legal provisions of
internal reconstruction.
Q13)What do you mean by underwriting? Explain the liability of underwriters under
various methods.
Q14)Following is the trial balance of Shakti Company Ltd. on 31-3-2021.
Dr. ` Cr. `
Stock on 1-4-2020 75,000 Sales 3,50,000
Purchases 2,45,000 Profit & loss A/c
Wages 50,000 on 31-3-2021 15,030
Discount 7,000 Share Capital in shares
Salaries 7,500 of `10 each 1,00,000
Rent 4,950 Sundry Creditors 17,500
Sundry Expenses 17,050 Reserve Fund 15,500
Dividend paid 9,000 Discount 5,000
Debtors 37,500
Machinery 29,000
Cash 10,200
Bank 6,000
Loan to an employee 3,250
Bad debts 1,580
5,03,030 5,03,030
OA-386 -3-
MCOSC-1.1A/C
Adjustments:
a) Stock on 31-3-2021 was ` 82,000.
b) Depreciate Machinery at 10%.
c) 6 months insurance was unexpired at `750 p.a.
d) Rent of ` 950 was due.
e) Provide reserve for doubtful debts at 5%.
f) Make provisions for income tax to the extent of ` 15,000.
Prepare below mentioned Final Account from the above particulars as per compa-
nies Act, 2013.
i) Statement of Profit and Loss.
ii) Balance sheet.
Q15)Kannan Ltd., was liquidated on 31-12-2021.

Balance Sheet as on 31-12-2021
` `
Share capital 1,00,000 Land and Buildings 60,000
8% Debenture 1,00,000 Plant and Machinery 60,000
Mortgage Loan Stock 60,000
(Secured on Land Debtors 70,000
and Buildings) 50,000 Cash in hand 5,000
Sundry Creditors 80,000 Profit and loss A/c 75,000
3,30,000 3,30,000
Assets realised as follows:
a) Land and Building - ` 55,000.
b) Stock - ` 20,000.
c) Plant and Machinery - ` 25,000.
d) Half of the debtors were bad.
e) Liquidator was entitled to a commission of 3% on amount realised other than
cash and 2% on the amount paid to unsecured creditors.
f) Preferential creditors amounted to `10,000 (included in sundry creditors).
g) Liquidation expenses amounted to ` 970.
Prepare liquidator Final Statement of Accounts.
  
OA-386 -4-

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MCOSC-1.

Time : 3 Hours Max. Marks : 80

Q3) Write a note on purchase consideration.

Q5) Distinguish between gross liability and net liability of underwriters.

Q6) Write a short note on voluntary winding up of a company.

Answer any three questions. Each question carries 10 marks. [3×10=30]

OA-386 -1- P.T.O.

Q15)Kannan Ltd., was liquidated on 31-12-2021.

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