Wk 3

UG–232 BCO–33

B.Com. DEGREE EXAMINATION –

JUNE 2008.
(AY 2004 – 05 onwards)

Third Year

ADVANCED ACCOUNTING

Time : 3 hours Maximum marks : 75

Answer for 5 marks question should not exceed

two pages.

Answer for 10/15 marks questions should not

exceed five pages.

SECTION A — (3 × 5 = 15 marks)

Answer any THREE questions.

1. Discuss in detail the various methods of treating

goodwill at the time of admission of a partner.

¦v¯ TmhõÎø¯ ÷\ºUS®÷£õx |ß©v¨ø£ øP¯õЮ

•øÓPøÍ ÂÁ›.
 Wk 3

2. State the legal provision regarding the

calculation of managerial renumeration.
{¸ÁõP Fv¯zøu PnUQkÁuØPõÚ \mh ÂvPøÍU TÖP.

3. Differentiate between External Reconstruction

and Internal Reconstruction.
APa ^µø©¨¤ØS®, ¦Ó ^µø©¨¤ØS® EÒÍ
÷ÁÖ£õkPÒ ¯õøÁ?

4. What is meant by liquidation of a company?

Describe the different methods of winding up.
{Ö©zvß Pø»¨¦ GßÓõÀ GßÚ? Pø»¨¤ß £» ÁøPPøÍ
ÂÁ›.

5. What are the different methods of recoupment

of short working?
SøÓ EØ£zvø¯ «mS® £À÷ÁÖ •øÓPøÍ ÂÁ›.

SECTION B — (4 × 15 = 60 marks)

Answer any FOUR questions in not exceeding

4 pages each.

6. What is meant by purchase consideration?

Discuss in detail the different methods of
calculating it.
öPõÒ•uÀ ©Ö£¯ß GßÓõÀ GßÚ? AuøÚU PnUQk®
£À÷ÁÖ •øÓPøÍ ÂÁ›.

2 UG–232
 Wk 3

7. A and B are partners, sharing profit and losses

in the ratio of 3 : 1. Their balance sheet at 31 st
December 2005 was as follows :
Liabilities Rs. Assets Rs.
Creditors 37,50 Cash at bank 22,50
0 0
General Reserve 4,000 Bills 3,000
Receivable
Capital : Debtors 16,00
0
A 30,00 Stock 20,00
0 0
B 16,00 Furniture 1,000
0
Buildings 25,00
0
87,50 87,50
0 0

On 1st January 2006, they admit C on the following

terms :

(a) That C pays Rs. 10,000 as his capital for a fifth

share in the future profits and Rs. 20,000 for
goodwill.

(b) That stock and furniture be reduced by 10%

and a provision of 5% be made for doubtful debts.
3 UG–232
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(c) That the value of buildings be appreciated

by 20%.

(d) That the capital accounts of all the partners

be adjusted on the basis of their profit sharing
arrangements and for this purpose current
accounts are to be opened.

Set out journal entries, prepare the

revaluation account, capital accounts and show the
opening balance sheet of the firm as on 1st January
2006.
A©ØÖ® B BQ¯ C¸ TmhõÎPÒ 3:1 GßÓ ÂQuzvÀ
»õ£ |mhzøu ¤›zxU öPõÒQßÓÚº. AÁºPÍx C¸¨¦
{ø»U SÔ¨¦ 31.12.2005 AßÖ EÒÍ£i R÷Ç
öPõkUP¨£mkÒÍx.
ö£õÖ¨¦PÒ ¹. ö\õzxPÒ ¹.
PhÜ¢÷uõº 37,50 Á[Q 22,50
0 0
£õxPõ¨¦ 4,000 ÁµÄUS›¯
©õØÖa^mk 3,000
•uÀ : PhÚõÎPÒ 16,00
0
A 30,00 \µUQ¸¨¦ 20,00
0 0
B 16,00 uÍÁõh® 1,000
0
Pmih® 25,00

4 UG–232
 Wk 3

0
87,50 87,50
0 0

1.1.2006 AßÖ, AÁºPÒ C I ¦v¯ TmhõίõP

÷\ºUQßÓÚº.
(A) ‘C’ ¹. 1000 ‰»uÚ©õPÄ®, ¹. 20,000 |
ß©v¨£õPÄ® GvºPõ» »õ£zvÀ1/5 £[QØPõP
ö\¾zxQÓõº.
(B) \µUQ¸¨¦ ©ØÖ® u»õ ©v¨¤À 10%
SøÓUPÄ®, ÷©¾® 5% I¯UPhß Põ¨¤ØS JxUPÄ®.
(C) Pmih ©v¨ø£ 20% Tmh ÷Ásk®.
(D) GÀ»õ TmhõÎPÎß ‰»uÚ®, »õ£ Âv¨£i \›Pmh
÷Ásk®.
CuØPõÚ |h¨¦PnUS Bµ®¤UP¨£h ÷Ásk®
SÔ¨¦PÒ GÊv, ©Ö©v¨¥k PnUS, •uÀ PnUS
©ØÖ® Bµ®£ C¸¨¦ {ø»U SÔUS u¯õ›UPÄ®.

8. A company offered for public subscription

10,000 shares of Rs. 10 each at Rs. 11 per share.
Money was payable as follows :
Rs. 3 on application.
Rs. 4 on allotment.
Rs. 4 on first and final call.
Applications were received for 12,000 shares and
the directors made pro rata allotment.

5 UG–232
 Wk 3

An applicant for 120 shares, could not pay the

allotment and call moneys. B, a holder of 200
shares, failed to pay the call. All these shares were
later on forfeited.
Out of the forfeited shares, 150 shares (the whole
of A’s shares being included) were issued at Rs. 9
per share.

Pass the journal entries for recording the above

translations.

J¸ {Ö©® ¹. 10 ©v¨¦ÒÍ 10,000 £[SPøÍ ¹. 11 Ãu®

©UPÐUS ÂØP •ßÁ¢ux. £n® RÌPõq©õÖ
ö\¾zu¨£h ÷Ásk®.

Âsn¨£ £n® ¹. 3, JxURk ¹. 4, •uÀ ©ØÖ® CÖv

AøǨ¦ ¹.4.
12,000 £[SPÐUS Âsn¨£® ö£Ó¨£mk,
C¯USÚºPÍõÀ ÂQuõa\õµ Ai¨£øh°À JxURk ö\
´¯¨£mhx.
120 £[SPÐUS Âsn¨£® ö\´u H GßÓ |£µõÀ JxURk
©ØÖ® AøǨ¦ £n® ö\¾zu C¯»ÂÀø». ¤ GßÓ |£º
200 £[SPøÍ øÁzv¸¨£Áº AøǨ¦ £nzøu
ö\¾zuÂÀø». ¤ßÚº C¢u¨ £[SPÒ ¯õÄ® £Ô•uÀ ö\
´¯¨£mhÚ.
£Ô•uÀ ö\´¯¨£mh £[SPÎÀ 150 £[SPÒ
(H–°ß AøÚzx £[SPЮ ÷\º¢xÒÍx) £[S JßÖ

6 UG–232
 Wk 3

¹.9 Ãu® ©ÖöÁαk ö\´¯¨£mhx. ÷©ØPsh |

hÁiUøPø¯U SÔUS® £vÄPøÍ GÊxP.

9. From the following balance sheet you are

required to value the equity share :
Rs. Rs.
2,000 6% preference Assets at book
shares of Rs. 100 2,00,00 value 6,00,00
each 0 0
30,000 equity shares
of Rs. 10 each 3,00,00
0
Liabilities 1,00,00
0
6,00,00 6,00,00
0 0
It has been valued that on 50% of the assets at
book value there is 10% increase and on the
remaining 50% of the assets at book value there is
5% decrease. Further Rs. 5,000 worth liabilities was
not recorded. There is no preference to preference
share holders on capital and profits.
R÷Ç öPõkUP¨£mkÒÍ C¸¨¦ {ø»U SÔ¨¤¼¸¢x
\õuõµn £[Qß ©v¨ø£ PõsP.
¹. ¹.
2,000 6% •ßÝ›ø© £[S £µ® ö\õzxUPÒ
¹. 100 Ãu® 2,00,00 Hmiß ©v¨¤À 6,00,00
0 0
30,000 \õuõµn £[S ¹.
10 Ãu® 3,00,00
0
PhÜ¢÷uõºPÒ 1,00,00
0

7 UG–232
 Wk 3

6,00,00 6,00,00
0 0

ö©õzu ö\õzvÀ, £õv ö\õzx ¦zuP ©v¨¤À 10 \uÃu®

AvP©õPÄ®, «v¨£õv ¦zuP ©v¨¤À 5 \uÃu®
SøÓÁõPÄ® ©v¨¤mkÒÍx. ¹. 5000 ©v¨¦ÒÍ ö£õÖ¨¦
£v¯¨£hõ©À EÒÍx. •ßÝ›ø© £[SPÐUS, ‰»uÚ®
©ØÖ® »õ£ DÄ ö\¾zxÁvÀ G¢u •ßÝ›ø©²®
CÀø» GÚ ³QUPÄ®.

10.Balance sheet of Indian Construction Ltd. as on

December 31, 1998.
Liabilities Rs. Assets Rs.
Authorized Goodwill 10,000
capital : Land and
20,000 equity Buildings 20,500
shares of Rs. 2,00,00 Machinery 50,850
10 each 0
Issued, Preliminary
subscribed expenses 1,500
and paidup Stock 10,275
capital : Book debt 15,000
12,000 equity Cash at bank 1,500
shares of 1,20,00 Profit & Loss a/c
Rs. 10 each 0
Less : Calls Balance as per
in arrears last balance sheet 22,00
(Rs. 3 per Less : Profit for 0
share on 9,000 the year
3,000 1,200
shares)
1,11,00 20,800
0
Sundry

8 UG–232
 Wk 3

creditors 15,425
Provision for
taxes 4,000
1,30,42 1,30,42
5 5

A valuation of machinery reveals that it is over

valued by Rs. 10,000. It is proposed to write down
this asset to its true value, to eliminate the
deficiency in the profit and loss account and to
write off goodwill and preliminary expenses by
adopting the following course :

(a) Forfeit the shares on which call is outstanding.

(b) Reduce the paid-up capital by Rs. 3 per share;

face value remaining the same.

(c) Reissue the forfeited shares at Rs. 5 per

share.

(d) Utilize the provision for taxes if necessary.

All the above were duly put into action. Pass

necessary journal entries and draw up the Balance
Sheet of the company after carrying out the terms
of the scheme.
C¢v¯ß PßìmµU\ß Ãmiß 31.12.1998 AßÖ C¸¨¦
{ø»USÔ¨¦.

9 UG–232
 Wk 3

ö£õÖ¨¦PÒ ¹. ö\õzxPÒ ¹.
A[RP›UP¨£mh |Øö£¯º 10,000
•uÀ 20,000 {»®
\õuõµn¨£[SPÒ ©ØÖ® 20,500
¹. 10 Ãu® Pmih® 50,850
öÁΰh¨£mh 2,00,00 C¯¢vµ®
0
HØÓ ©ØÖ® ÷uõØÖÂUS
ö\¾zv¯ •uÀ ® ö\»Ä 1,500
12,000 \µUS 10,275
\õuõµn¨ £[SPÒ PhÚõÎPÒ 15,000
1,20,00 Á[Q/öµõUP 1,500
¹.10 Ãu® 0 ®
C»õ/|P/S
Pøh]
ö£õÖ¨¦PÒ ¹. ö\õzxPÒ ¹.
PÈ : AøǨ¦ C¸¨¦ {ø»U
{¾øÁ (3000 £ SÔ¨¦¨£i
[SPÒ ¹. 3 Ãu® C¸¨¦ 22,00
9,000 PÈ : C¢u 0
Bsk »õ£®
1,200
1,11,00 20,800
0
£Ø£»
PhÜ¢÷uõº 15,425
Á› JxURk
4,000
1,30,42 1,30,42
5 5

C¯¢vµ® ¹. 10,000 AvP©õP ©v¨¤h¨£mkÒÍx.

CuøÚ Esø© ©v¨¤ØS GÊu •iÄ ö\´¯¨£mhx.
10 UG–232
 Wk 3

÷©¾® »õ£ |mhU PnUQß £ØÓõU SøÓø¯ }

UPÄ®, |Øö£¯º ©ØÖ® ÷uõØÖÂUS® ö\»ÄPøÍ
¤ßÁ¸® ÁÈPÎÀ ÁÇUöPõÈUPÄ® •iÄ ö\´uÚº.
(A) AøǨ¦ {¾øÁ EÒÍ £[SPøÍ £Ô•uÀ ö\´Áx.
(B) ö\¾zu¨£mh •uø» £[S JßÖUS ¹. 3 BP
SøÓ¨£x.
(C) £Ô•uÀ ö\´u £[SPøÍ ¹. 5 Ãu® ©ÖöÁαk ö\´¯.
(D) ÷uøÁ¨£mhõÀ, Á› JxURkPøÍ £¯ß£kzxÁx.
÷uøÁ¯õÚ £vÄPøÍ £v¢x ©ØÖ® C¸¨¦ {ø»USÔ¨ø£
÷©ØPõq® vmh[PøÍ {øÓ÷ÁØÔ¯ ¤ß u¯õ›UP.

11.The following are the balances of Indian Bank

Ltd. for the year ended 31.12.1990.
Rs.
Interest on loans 5,18,000
Interest on fixed deposits 5,50,000
Commission received 16,400
Salaries and allowances 1,08,000
Discount on bills discounted 3,90,000
Interest on cash credits 4,46,000
Interest on current a/c’s 84,000
Rent and Taxes 36,000
Interest on overdrafts 3,08,000
Director’s fees 8,400
Interest on savings a/c’s 1,36,000
Postage and Telegrams 8,600

11 UG–232
 Wk 3

Lockers rent 2,000

Transfer fees 1,400
Depreciation on Bank’s properties 10,000
Sundry charges 3,400

Other information :

(a) Rebate on bills discounted Rs. 98,000.

(b) Bad debts Rs. 80,000.

(c) Provision for Income Tax Rs. 3,00,000.
From the above information, prepare the
profit and loss a/c of the bank for the year ended
13.12.1990.
CsiPõ Á[Q ¼miß 31 i\®£º 2000 •i¯ EÒÍ uPÁÀPÒ
R÷Ç öPõkUP¨£mkÒÍx.

¹.
Phß «x Ámi 5,18,000
{ø»øÁ¨¦ «x Ámi 5,50,000
PÈÄ ö£ØÓx 16,400
\®£Í® ©ØÖ® A»Áßì 1,08,000
©õØÖ ^mk «uõÚ PÈÄ 3,90,000
öµõUP Phß «uõÚ Ámi 4,46,000
|h¨¦ PnUS «x Ámi 84,000
ÁõhøP/Á› 36,000

12 UG–232
 Wk 3

÷©À Áøµ¨£ØÖ «x Ámi 3,08,000

C¯US|ºPÒ Pmhn® 8,400
÷\ª¨¦ PnUS «x Ámi 1,36,000
u£õÀ ©ØÖ® u¢v 8,600
£õxPõ¨¦ ö£mhP ÁõhøP 2,000
©õØÖ Pmhn® 1,400
Á[Q ö\õzxPÒ ÷©À ÷u´©õÚ® 10,000
Cuµ ö\»ÄPÒ 3,400

¤Ó uPÁÀPÒ
(A) PÈÄ ö\´¯¨£mh ©õØÖa^miß ÷©À uÒУi ¹.
98,000
(B) ÁµõUPhß ¹. 8,000
(C) Á¸©õÚ Á› JxUS ¹. 30,000
Á[Q°ß »õ£ |mhUPnUS 31.12.2000 •i¯
u¯õ›UPÄ®.

12.Vivek Travels Ltd. purchased from Volvo Ltd.

three cars costing Rs. 12 lakhs each on hire
purchase system on July 1, 1998. Payment was to
be made
Rs. 9 lakhs down and the remaining in three equal
instalments together with the interest at 5%. Vivek
Travels Ltd. writes of depreciation @ 20% on the
diminishing balance method. It paid the instalments
13 UG–232
 Wk 3

due at the end of the first year but could not pay
the next subsequently, all the three cars were
repossessed by Volvo Ltd. and it spent Rs. 1,74,000
on getting the cars thoroughly overhauled and sold
them for
Rs. 21,00,000. Prepare the necessary ledger
account in the books of both the parties.

Â÷ÁU iµõÁ¼[ì ¼m,3 PõºPøÍ JßÖ ¹. 12 »m\®

Ãu® 1 ãø» 1998 À, ÷ÁõÀÁõ ¼m, C¸¢x Áõ[Q¯x.
¹. 9 »m\® •ß£n©õPÄ®, «vz öuõøPø¯ ‰ßÖ \©
uÁøn¯õP BskUS 5% Ámi²hß ö\¾zu ÷Ásk®. ÷u
´©õÚ® 20% SøÓ¢u ö\À •øÓ°À GÊu¨£kQßÓx.
Â÷ÁU ¼m, Cµshõ® uÁøn ö\¾zu C¯»ÂÀø».
AuÚõÀ ÷ÁõÀÁõ ¼m, GÀ»õ PõºPøͲ® v¸®£
GkzxU öPõshx. ÷©¾® 1,74,000 ö\»Ä ö\´x Aøu
¦x¨¤zx ¹. 21,00,000 US v¸®£ ÂØÓx. C¸ {ÖÁÚ
Hmi¾® ÷£÷µmkU PnUSPÒ u¯õ›UPÄ®.

———————

14 UG–232