GURU NANAK COLLEGE (AUTONOMOUS), CHENNAI – 42.

APRIL 2023
23A796
ADVANCED CORPORATE ACCOUNTING
20UCOM312
MAX. MARKS : 100
TIME : 3 HRS.
SECTION - A (10 X 3 = 30 MARKS)
(Answer Any TEN Questions)
1. Write the meaning of Accounting Standards.
2. Specify any three objectives of accounting standards.
3. What do you mean by financial reporting?
4. How rebate on bill discounted is dealt in bank final accounts?
5. Specify the reserve for unexpired risk as per IRDA Act.
6. Define the term consideration. List the methods of computation of purchase
consideration.
7. Who is liquidator?
8. The trial balance of ABC bank Ltd. As on 30th June 2020 shows the following
Interest and discount 30,30,400
Rebate on bills discounted(1.7.2019) 4,500
Bills discounted and purchased 2,30,400
The unexpired discount as on 30.6.2020 is estimated to be Rs. 5,250. Calculate the
amount of interest and discount to be credited to Profit & Loss account.
9. From the information given below find out the amount for reserve for unexpired risk
in fire insurance
Premium received during the year ended 31.3.2017 6,00,000
Reinsurance premiums 1,50,000
Bonus in reduction of Premium 25,000
(not yet adjusted in premiums)
10. Calculate net commission to be charged in revenue account
Commission on direct business 1,50,000
Commission on Reinsurance accepted 11,000
Commission on Reinsurance ceded 14,000
11. Calculate purchase consideration from the following
For every four 10% Preference shares of Rs.10 each in A Ltd. 7 Equity shares of
Rs. 10 each in B Ltd. as Rs. 9 paid up. There were 60,000 10% preference shares in
A Ltd. For every three equity shares of Rs. 10 each in A Ltd. 8 equity shares in B Ltd
as Rs. 10 paid up. There were 90,000 equity shares in A Ltd.
12. Compute liquidator's remuneration from the following
Assets realized: 5,30,000 including cash balance Rs. 20,000. Liquidators
remuneration is 2% on assets realized.
SECTION - B (5 X 6 = 30 MARKS)
(Answer Any FIVE Questions)
13. What are the objectives of financial reporting?
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14. Explain any three accounting standards in India.
15. Find out the profit balance carried over to balance sheet
Interest earned 5,00,000
Other incomes 37,000
Interest expended 2,40,000
Operating Expenses 2,05,000
Rebate on bill discounted : 1.4.2016 38,000
: 31.3.2017 42,000
16. While closing books of accounts ABC bank has its advances classified as follows:
Standard assets 13,00,000
Sub-standard assets 1,20,000
Doubtful assets:
Upto one year 60,000
One to three years 30,000
More than three years 20,000
Loss assets 50,000
Calculate the amount of provision to be made by bank.
17. From the following information prepare revenue a/c
Provision for unexpired risk (1.4.2016) 40,000
Premium received 95,000
Reinsurance premium 7,250
Additional Reserve on 1.4.2016 30,000
Profit on sale of investment 17,500
Claims incurred (net) 38,000
Commission 13,000
Operating expenses 27,000
Other incomes 60,000
Additional reserve is to be increased by 10% of net premium.
18. The Balance sheet of M Ltd., and N Ltd., as on 31st March 2014 were as follows:
M Ltd N Ltd M Ltd N Ltd
Liabilities Assets
Rs. Rs. Rs. Rs.
Share capital (Rs.10) 5,00,000 4,00,000 Building 4,00,000 6,00,000
General reserve 2,00,000 --- Machinery 4,50,000 3,80,000
Profit and Loss A/c 50,000 50,000 Cash at bank 1,50,000 ----
10% Debentures 1,00,000 2,50,000
Creditors 1,50,000 2,80,000
10,00,000 9,80,000 10,00,000 9,80,000
M Ltd., takes over N Ltd., on 30th April 2014. You are required to calculate Purchase
consideration under Ratio of Exchange method.
19. N Ltd. went into voluntary liquidation and on that date preferential creditors stood at
20,000, unsecured creditors 50,000, 6% debentures Rs.35,000. The assets realized
Rs.80,000. The expenses of liquidation amounted to Rs.1,000 and the liquidator's
remuneration was agreed at 2.5% on the amount realized and 2% on amount paid to
unsecured creditors including preferential creditors prepare liquidator's final
statement of account.
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 SECTION - C (2 X 20 = 40 MARKS)
(Answer Any TWO Questions)
20. From the following information of ABC Bank Ltd., Prepare the Profit and Loss
account and Balance sheet as on 31st March 2014
Debit Credit
Particulars
Rs. Rs.
Share capital 1,00,000 shares of Rs.10 each, Rs.5 paid up 5,00,000
Statutory reserve 10,00,000
Profit and Loss account (1.4.2014) 3,00,000
Fixed deposit account 20,00,000
Savings deposit account 30,00,000
Current account 70,00,000
Bills payable 8,00,000
Loans, advances and cash credits 70,00,000
Borrowings from other banks 2,00,000
Cash in hand 60,000
Cash at bank 28,00,000
Money at call and short notice 3,00,000
Bills discounted 5,00,000
Interest and Discount received 2,50,000
Premises 14,00,000
Investments 30,00,000
Unclaimed dividends 60,000
Interest on deposits 50,000
1,51,10,000 1,51,10,000
Additional information:
a. Bills for collection Rs.1,00,000
b. Acceptances and endorsements Rs.3,00,000.
21. X Co. Ltd agreed to acquire the assets excluding cash as on 31st Dec 2010 of Y
Ltd . The balance sheet of Y Ltd. as on that date was
Liabilities Assets
Equity Shares of Rs. 10 each 3,00,000 Goodwill 60,000
General Reserve 80,000 L&B 1,20,000
Debentures 50,000 P&M 2,00,000
Creditors 10,000 Stock 80,000
Profit & Loss a/c 60,000 Debtors 30,000
Cash 10,000
5,00,000 5,00,000
The consideration was as follows
a) A cash payment of Rs.4 for every share of Y Ltd.
b) The issue of one share of Rs.10 each (Market value Rs. 12.50) in the X Ltd. Co for
every share in Y Ltd.
c) The issue of 1100 debentures of Rs.50 each in X co. Ltd to enable Y.Ltd to discharge
its debentures at a premium of 10%.
d) The expenses of liquidation of Y Ltd. amounting to Rs.4,000 was to be met by
themselves.
Give journal entries and important ledger a/c in Y Ltd.
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22. The balance sheet of B Ltd. as on 31.12.2015
Liabilities Assets
Share capital
8,000 pref.shares of Rs.10 each 80,000 Land & Building 25,000
12,000 equity shares of Rs. 10 each 1,20,000 Other fixed assets 2,00,000
Bank loan 4,00,000 Stock 5,25,000
8% debentures 1,00,000 Debtors 1,00,000
Interest outstanding on debenture 8,000 Profit& Loss 58,000
Creditors 2,00,000
9,08,000 9,08,000
The company went into liquidation considering the following prepare liquidator's final
statement
a) Liquidation expenses and Liquidator's remuneration amounted to Rs. 3,000 and
Rs. 10,000 respectively
b) Bank loan was secured by pledge of stock
c) Debentures and interest thereon are secured by floating charges of all assets
d) Fixed assets were realized at book value and current assets at 80% of book value.

23. From the following balances of United General insurance Company Limited as on
31st March, 2016
Amount
Particulars
Rs.
Share capital 70,00,000
Cash at bank 20,00,000
Machinery 7,00,000
General reserve 2,00,000
Profit and Loss a/c 2,68,600
Loans 63,80,000
Investments 15,40,000
Borrowings 1,62,200
Agents balances (Dr.) 13,000
Sundry Debtors 7,300
Sundry Creditors 22,000
Agents Balances (Cr.) 1,000
Additional information:-
a. Provision for taxation Rs.10,000
b. Provision for unexpired risks Rs.29,20,000
c. Depreciation @10% on Machinery
d. Outstanding Premium Rs.21,000
e. Outstanding Claims Rs.10,000
f. Interest accured but not due Rs.2,500
You are required to prepare Balance sheet as on 31st March 2016.
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