aac 2011 problem

8/4/2019 AAC 2011 Problem

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1. You are required to prepare the profit & Loss Account for 2009-10 and the Balance Sheet as on31

stMarch 2010 from the following trail balance of XYZ Ltd. (14)

Trail Balance of XYZ Ltd as on 31st March 2010.

Particulars Debit(Rs.) Credit(Rs.)

Cash in Hand 5,400

Cash in Bank 26,300

Accounts Receivable 1,45,000Free hold Land 1,00,000

Building 3,20,000

Machinery 1,63,000

Office Equipment 37,000Patents 75,000

Accounts Payable 63,000

Capital 6,20,000Drawings 52,450

Opening Stock- Raw Material 20,100

- Work in Progress 10,400

- Finished Goods 27,100Purchases- Raw Material 3,81,500

- Consumables 25,250

Sales 9,87,800Return Inward 6,800

Return Outward 5,000

Wages 84,800

Fuel and Power 47,300Carriage on -Sales 20,400

- Purchases 32,000

Salaries- Office 65,000- Factory 85,000

General Expenses 30,000

Insurance -Factory 4,000-Office 2,000

Rent (office) 90,000

17,65,800 17,65,800

The following adjustments are also to be taken in to account.

1. Inventory of raw material in hand on 31st March 2010 is Rs. 21,300 work in progress is

Rs. 14,300 and finished goods Rs 32,400.

2. Machinery is to be depreciated @ 10% and Office equipment @ 15%. Patents are to beamortized @ 20%.



3. Salaries are outstanding Rs. 10,000 for Factory and Rs. 5,000 for office.

4. Insurance includes a premium of Rs. 1,700 on a policy expiring on 30th

Sept. 2010,

relating to office.

5. Wages wrongly include Rs. 10,000 paid to the technician on 01/10/2009 for installation

of a machine.

6. Bad debts to be written off are Rs. 7,250.

7. Purchases of raw-materials include Rs. 50,000 spent for procuring packing materials.

8. Rent received in advance Rs. 10,000.

9. Charge provision for bad debts at 5% and provision for discount on debtors @ 2%.



2. Success India Ltd, with an authorized capital of Rs. 2,00,000 divided into 20,000 Equity

Shares of Rs. 10 each, issues the entire amount of the shares payable as follows:

Rs. 3 on applicationRs. 6 on allotment (including premium Rs. 2)

Rs. 3 on call.

All share money is received in full with the exception of the allotment money on 200 shares andthe call money on 500 shares (including the 200 shares on which the allotment money has notbeen paid).

The above 500 shares are duly forfeited and 400 of these (including the 200 shares on whichallotment money has not been paid) are re-issued at Rs. 7 per share payable by the purchaser.

Pass Journal entries and show the Balance Sheet.

3.Superpower Ltd. invited applications for 10,000 of its Equity Shares of Rs. 10 each payable

Rs. 5 on application, Rs. 3 on allotment, and Rs. 2 on call.

Applications were received for 15,000 shares and it was decided to deal with the same as

follows:

a) To refuse allotment to applicants for 1,000 shares.b) To give full allotment to applicants for 2,000 shares.

c) To allot the remaining shares pro-rata among other applicants.

d) To utilize the surplus received on application in part payment of amount due on

allotment.

A holder of 100 shares (to whom full allotment was made) and another holder of 150 shares (to

whom pro-rata allotment was made) failed to pay the allotment money due. On call there was a

further default on 200 shares.All these shares were forfeited. Subsequently the first lot of 250 (100 + 150) shares were re-

issued as fully paid at Rs. 8 per share.

Give journal entries and prepare Balance Sheet.

4. Handsome and Beautiful. Co. Ltd. issued 10,000 shares of Rs. 100 each at premium of Rs.

20 per share. The entire issue was underwritten as follows:

A 5,000 shares (Firm underwriting 1,000 shares)

B 3,000 shares (Firm underwriting 500 shares)` C 2,000 shares (Firm underwriting 500 shares)

Shares applied for were 9,000 shares, the following being the marked forms (including firm

underwriting):



A 3,500 shares

B 1,400 shares` C 1,600 shares

Calculate the liability of the each underwriter and also calculate the commission paid to each of

them (assuming maximum commission allowed by the law is paid).

5. Following is the Balance Sheet of Important India Ltd as at 31/03/2010:

The following resolutions were duly passed:

i) A resolution converting the preference shares into preference shares of Re. 1 each.

ii)

A resolution declaring issue of 3 bonus shares for every 5 shares held.

Showjournal entries and prepare the Balance Sheet.

6. The is the summarized is the summarized Balance Sheet of Be Brave India Ltd. as on

31/03/2010

Liabilities Rs. Assets Rs.

Share Capital10,000 Eq. Sh. of Rs. 100 each 10,00,000 Sundry Assets 24,10,000

5,000 Eq. Sh. of Rs. 40 each 2,00,000

2,000 10% Pref. Sh. of Rs. 10 each 20,000

Reserve and SurplusSecurities Premium Account 3,00,000

Capital Redemption ReserveAccount 1,80,000

Capital Reserve Account 3,80,000

General Reserve Account 1,50,000

Profit and Loss Account 1,80,000

24,10,000 24,10,000

Liabilities Rs. Assets Rs.

Share Capital Fixed Assets 9,00,000

5,000 Eq. Sh. of Rs. 100 each 5,00,000 Investments 2,00,000

3,000 8% Pref. Sh. of Rs. 100 each, Rs.

80 per share called up and paid up

2,40,000 Current Assets

4,000 9% Pref. Sh. of Rs. 100 each,

fully paid up

4,00,000 Stock 1,00,000

Reserve and Surplus Sundry Debtors 2,00,000Securities Premium Account 60,000 Cash at Bank 3,00,000

Capital Reserve Account 1,00,000

General Reserve Account 1,00,000

Profit and Loss Account 2,00,000



On 01/04/2010, the company redeemed the Pref. Sh. at a premium of 10%. In order to pay off the

Pref. Share-holders, the company sold the investments realizing Rs. 2,10,000 and also issued2,000 7% Pref. Sh. of Rs. 100 each which were fully subscribed in cash.

On the same date the company issued fully paid bonus shares in the ratio of 1 for every 2 shares

held.

Show journal entries and prepare the Balance Sheet.

7. Following are the Balance Sheets of Dedication Wanted Ltd for the year 2007 and 2008.

(Rs. in '000)

Liabilities200

7200

8 Assets200

7200

8

Equity Share Capital 200 320 Goodwill 100 80

8% Redeemable Preference

Shares 150 90 Land & Building 200 170

General Reserve 40 - Plant & Machinery 80 200

Capital Redemption Reserve 70

Profit & Loss Account 30 48 Sundry Debtors 150 250

10% Debentures 100 90 Inventories 87 59

Sundry Creditors 55 83 Bills Receivable 20 30

Bills Payable 20 16 Cash & Bank 25 18

Proposed Dividend 42 50

Preliminary

Expenses 15 10

Provision for Tax 40 50

677 817 677 817

Additional Information:

i) An interim dividend of Rs. 20,000 has been paid in 2008

ii) Debentures and Preference Shares were redeemed at the end of the year 2008.

Redeemable Preference Shares were redeemed at a premium of 5%. Premium

was paid of P/L account. Before redemption interest was paid on debentures. CRR

was created out of General Reserve and Profit and Loss account

iii) During the year assets of another company were purchased for a consideration of

Rs. 40,000 payable in shares. The assets purchased were:

Stock Rs. 20,000, Machinery Rs. 20,000.iv) A part of the plant was sold for Rs. 20,000 (W.D.V. Rs. 25,000). Depreciation for the

year 2008 on Plant & Machinery Rs. 20,000 was provided.

Current LiabilitiesSundry Creditors 1,00,000

17,00,000 17,00,000



v) Depreciate Land and Building by Rs. 10,000. Land costing Rs. 20,000 was sold for

Rs. 50,000.

vi) Bonus Shares of Rs. 10,000 were issued to the existing shareholders during the year.

Prepare a Cash Flow Statement for the year 2008.

aac 2011 problem

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