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Free of Cost ISBN : 978-93-5034-651-8
SolvedScanner Appendix
CMA (CWA) Inter Gr.I(Solution upto Dec - 2012 & Question of June - 2013 included)
Paper - 5 : Financial Accounting
Chapter - 1 : Accounting Concepts and Conventions
2012 - Dec [6] (b) In the books of Lotus Stores calculation of correct Total of Trial Balance
Particulars Dr. Cr.
Total of Trial Balance as per on 3,65,000 2,26,000
Add: under statement of op. stock 5,000 —
Less: over statement of Rent & Rates 27,000 —
Add: under statement of sundry creditors — 63,000
Less: over statement of sundry debtors 54,000 —
Correct Total 2,89,000 2,89,000
2012 - Dec [8] (c)In order to enable the management to draw important conclusions regarding the workingof a company over a number it is essential that accounting practices and methodsremain unchanged from one accounting period to another. According to AS-1consistency is a fundamental assumption and it is assumed that accounting policies areconsistent from one period to another. Where this assumption is not followed, the factshould be disclosed with proper reasons.Kohler has talked about three types of consistencies :
(i) Vertical consistency: consistency maintained within the interrelated financialstatements of the same date.
(ii) Horizontal consistency: this enables the comparison of performance of theorganization in one year with its performance of previous/ next year.
(iii) Third dimensional consistency: Performance of one organization can be
compared with that of another organization in the same industry.
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 2
Chapter - 2 : Depreciation Accounting
2012 - Dec [2] (b)
As per AS 6 "Depreciation Accounting”, following are the criterias which should be
fulfilled by a depreciable asset-
(a) They are expected to be used during more than one accounting period,
(b) They have a limited useful life,
(c) They are held by an enterprises for use in the production or supply of goods &
services, for rental to others, or for administrative purposes and not for the purpose
of sale in the ordinary course of business.
Chapter- 3 : Accounting for Inventory
2012 - Dec [2] (c)
Valuation of Good unit = Total Input
=
=
W.N. (1) Total Input Cost `
Purchase cost 10,000 units × ` 135 p.u. = 13,50,000
Less: Cenvat Credit 10,000 units × ` 8 p.u.= 80,000
12,70,000
Add: Freight incurred 88,500
13,58,500
Valuation of closing stock
(a) Closing stock quantity = 10,000 ! 500 ! 100 ! 8,500
= 900 units
(b) Valuation per unit = 143/-
(c) Value of closing stock (a) × (b) = 1,28,700/-
Chapter- 4 : Capital and Revenue Expenditure
2012 - Dec [4] (c)
As per AS 10 “Accounting for Fixed Assets” if due to any expenditure, the future benefits
from the assets increases beyond its previously assessed standard of performance,
then it should be capitalized. The size of the expenditure is not important for capitalizing
the expenditure. In the present case, renovation expenses should be capitalized
because it has enhanced the revenue generating capacity of the hall but expenditure
for making more emergency exit does not enhance the revenue generating capacity of
the hall, so it should be charged to revenue.
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 3
Chapter - 5 : Royalty Accounts
2012 - Dec [3] (c)
In the books of Cochin coals Ltd
Royalty Payable a/c
Date Particulars Amount`
Date Particulars Amount`
31.3.10 To Landlord a/c (Minimum rent)
15,00,000 31.3.10
31.3.10
By Royalty receivable a/c(4,000 tone × 120/-)
By P & L a/c4,80,000
10,20,000
15,00,000 15,00,000
31.3.11 To Landlord a/c(19,000 tone × 100/-)
19,00,000 31.3.11
31.3.11
By Royalty receivable a/c(7,000 × 120/-)
By P and L a/c
8,40,000
10,60,000
19,00,000 19,00,000
31.3.12 To Landlord a/c(22,000 tone × 100/-)
22,00,000 31.3.12 By Royalty receivable a/c(8,000 tone × 120/-)
By P & L a/c
9,60,000
12,40,000
22,00,000 22,00,000
2012 - Dec [8] (b)
Short working and recoupment of short working:
Short working is the amount by which the minimum rent exceeds the actual royalty. It
is the difference between actual rent and minimum rent.
Generally the royalty agreement contains a provision for carrying forward of short
workings with a view to adjust it in the future. In the subsequent years, such short
working is adjusted against the surplus royalty. This process of adjustment is called
recoupment of short Workings.
The right of recoupment of short workings enables the lessee to recover the excess
payment, made in the earlier years to meet the condition of payment of minimum rent.
A time is usually agreed upon the number of years for which such short workings can
be recouped. This time limit for recoupment of short workings may be fixed or
fluctuating. If the short workings cannot be recouped within the specified time, they
lapse and are charged to Profit and Loss Account in the year when that specified time
limit for recoupment ends.
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 4
Chapter - 6 : Hire Purchase and Instalment Payment
2012 - Dec [3] (b)
H.P. Trading A/c of Chinu and Co.
for the year ending on 31.3.2012
Date Particulars Amount`
Date Particulars Amount`
1.4.11 To Balance b/dOpening Instt. not due at cost
60,000 31.3.12 By Cash A/c 2,65,000
Opening Instt. due but notreceived
NIL 31.3.12 By Balance C/dClosing Instt. not due at cost
2,27,500
31.3.12 To Cost of goods sold on H.P. 3,55,000 Closing Instt. due but notreceived
35,000
31.3.12 Profit & Loss a/c (B/F) 1,12,500
5,27,500 5,27,500
W.N.1 Mem. H.P. Debtors A/c
Particulars Amount
`
Particulars Amount
`
To Balance b/d NIL By Cash a/c 2,65,000
To H.P. Stock W.N. (2) 3,00,000 By Balance c/d 35,000 (b/f)
3,00,000 3,00,000
W.N. 2 Mem. H.P. Stock a/c
Particulars Amount
`
Particulars Amount
`
To Balance b/d 96,000 By H.P. Debtors a/c (b/f) 3,00,000
To Goods Sold on H.P. 5,68,000 By Balance c/d 3,64,000
6,64,000 6,64,000
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 5
Chapter - 7 : Accounting for Non Profit Making Organization
2012 - Dec [3] (a)
Receipt & Payment A/c of Nav Bharat Club
for the year ended on 31.3.2012
Receipts ` Amount
(`)
Payments ` Amount
(`)
To Balance b/d (B/F)
To Subscriptions 56,640
! Closing o/s 2,600
+ Closing advance 700
+ Opening o/s 3,100
! Opening advance 1,100
To Sale of old newspaper
To Lectures
To Entrance Fees 2,900
+ Capitalized 2,900
To Misc. Incomes
To Instalments on sports
prize fund
5,840
56,740
530
8,000
5,800
1,200
4,500
By Unkeep of ground 21,000
+ opening o/s 1,500
By Printing & 2,800
Stationery
+ Opening o/s 510
By Salaries 28,000
+ Opening o/s 3600
! Closing o/s 4,200
By Repairs
By Sports prizes
By Balance c/d
22,500
3,310
27,400
3,500
6,500
19,400
82,610 82,610
Chapter - 8B : Admission of Partner
2012 - Dec [4] (a), (b)
(a) W.N. (1) Calculation of sacrifying ratio
Particulars Old ratio!New ratio
Ashok ! = =
Bala! = =
� Sacrifying ratio is 21:15
or 7:5
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 6
W.N.(2) Calculation of Partners closing capital
Particulars Ashok
`
Bala
`
Chand
`
Capital as per Trial Balance 3,36,000 2,40,000 2,24,000
Goodwill adjustment (7:5) 56,000 40,000 (96,000)
W.N. (1) 3,92,000 2,80,000 1,28,000
Interest on Capital @ 5% 19,600 14,000 6,400
4,11,600 2,94,000 1,34,400
Share of Profit
Profit 2,20,000
Less: Instt. on capital 40,000
1,80,000 (7:5:3) 84,000 60,000 36,000
4,95,600 3,54,000 1,70,,400
Less: Drawings as given in T/B 1,45,600 1,04,000 20,400
3,50,000 2,50,000 1,50,000
Solution:
Balance Sheet of Reconstituted firm as on 31.03.2012
Liabilities Amount
`
Assets Amount
`
Capital A/c Other Assets 7,70,000
Ashok 3,50,000 Cash in hand 28,000
Bala 2,50,000
Chand 1,50,000
Sundry creditors 48,000
7,98,000 7,98,000
(b) Calculation of Goodwill
(i) Super Profit Method
Goodwill = Super Profit × No. of years of purchase
= 95,000/- × 2 = 1,90,000/-
Super Profit = Average Profit ! Normal Profit
= 1,70,000 !(5,00,000 × 15%) =95,000
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 7
Average Profit = = 1,70,000
(ii) Capitalization Method
Goodwill = Value of Business ! Avg. Capital Employed
= ! 5,00,000
= 11,33,333 ! 5,00,000 = 6,33,333/-
Chapter - 9 : Branch Accounts
2012 - Dec [2] (a)
In the books of Priya Sales Corporation, Jaipur
Branch Stock A/c
Particulars Amount Particulars Amount
To Balance b/d 2,40,000 By Goods sent to branch A/c 20,000
To Goods sent to branch A/c 18,00,000 By Cash A/c 5,80,000
To Branch Debtors A/c 25,000 By Branch Debtors A/c 11,40,000
To Branch Adjustment A/c (b/f) 35,000
21,00,000
By Balance C/d 3,60,000
21,00,000
Branch Debtors A/c
Particulars Amount Particulars Amount
To Balance b/d 2,15,000 By Cash A/c 10,45,000
To Branch stock 11,40,000 By Branch Expenses
Discount allowed 14,800
By Bad debts 9,200
By Branch Stock 25,000
By Balance C/d 2,61,000
13,55,000 13,55,000
Branch Adjustment A/c
Particulars Amount Particulars Amount
To Goods Send to Branch 5,000 By Stock Reserve A/c 60,000
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 8
To Branch P and L A/c 4,50,000
(B/f)
By Goods sent to branch 4,50,000
To Stock Reserve 90,000 By Branch Stock A/c 35,000
5,45,000 5,45,000
Branch Expenses A/c
Particulars Amount Particulars Amount
To Branch Debtors A/c By Branch P and L A/c 2,61,000
Discount allowed 14,800
Bad debts 9,200
To Cash A/c
Salary and wages 1,80,000
Rent, Rates and Taxes 42,000
Sundry expenses 15,000
2,61,000 2,61,000
Branch P and L A/c
Particulars Amount Particulars Amount
To Branch Expenses A/c 2,61,000 By Branch Adjustment A/c
[Gross Profit]
4,50,000
To P and L A/c [Net Profit] 1,89,000
4,50,000 4,50,000
Goods Sent to Branch A/c
Particulars Amount Particulars Amount
To Branch Stock A/c 20,000 By Branch Stock A/c 18,00,000
To Branch Adj. A/c 4,50,000 By Branch Adj A/c 5,000
To Trading A/c (B/F) 13,35,000
18,05,000 18,05,000
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 9
Note:
Branch Stock A/c shows a difference of ` 35,000 in the Debit side. It is assumed that
actual sales are made above Invoice Price.
2012 - Dec [8] (e)
Branches are classified as two way, (i) Inland Branch, (ii) Foreign Branch
(i) Inland Branches:
(a) Dependent Branches: Branches in respect of which the whole of the
accounting records are kept at head office.
(b) Independent Branches: As the name indicates such branches maintain
independent accounting records.
(ii) Foreign Branches: Branches which are located in a foreign country other
then in which the company is incorporated they maintain independent and
complete record of business.
Methods of accounting are:
(i) Final Accounts method
(a) At wholesale price
(b) At Cost Price/At Invoice Price
(ii) Debtors method;
(iii) Stock and Debtors method; and
(iv) Cash Basis System.
Chapter - 12 : Issue and Forfeiture of Share
2012 - Dec [6] (a)
Journal Entries in the books of wonder world Ltd.
2012
April 1 Bank A/c Dr.
To Investments A/c
To P and L A/c
(Being Investments Sold)
2.30
1.80
0.50
April 1 Bank A/c Dr.
To Preference share application A/c
(Being application money @ 60/- each received on 1,500
Preference Shares)
0.90
0.90
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 10
April 1 Preference Share application A/c Dr.
To 12% PSC A/c
(Being allotment made)
0.90
0.90
April 1 Preference share allotment A/c Dr.
To 12% PSC A/c
(Being allotment money due on 1,500 pref shares @ 40/-
each)
0.60
0.60
April 1 Bank A/c Dr.
To preference Share allotment A/c
0.06
0.06
April 1 ESC A/c Dr.
Security Premium A/c Dr.
To equity shareholders A/c
(Being 20%Eq. Shares bought back at a premium of 10/-
each as per board resolution dated............)
2.00
2.00
4.00
April 1 Equity share holders A/c Dr.
To Bank A/c
(Being amount paid to equity shareholders against buy back)
4.00
4.00
April 1 General Reserve A/c Dr.
To Capital Redemption Reserve A/c
(Being amount transferred from General Reserve to CRR
A/c) [Refer W.N.1]
0.50
0.50
April 1 Capital Redemption Reserve A/c Dr.
Security Premium A/c Dr.
To Bonus to Shareholders A/c
(Being profits transferred to issue bonus shares in the ratio
of 1:5 [Refer W.N.2]
0.50
1.10
1.60
April 1 Bonus to Shareholders A/c Dr.
To ESC A/c
(Being Bonus Shares issued in the ratio of 1:5 as per board
resolution dated........)
1.60
1.60
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 11
W.N. (1)
W.N. (2) No. of Bonus Shares to be issued
= 80,000 × = 16,000 Shares
Balance Sheet of wonder Ltd. as on 1.4.2012
I. Equity & Liabilities Note ` Lacs
1. Shareholders Find
(a) Share Capital
(b) Reserve & Surplus
2. Non Current Liabilities
3. Current Liabilities
(a) Short Term Borrowings
(b) Trade Payables
(c) Other current liabilities
B1
B2
B3
11.10
4.60
NIL
7.50
5.00
NIL
Total 28.20
II. Assets
1. Non current Assets
(a) Fixed Assets
(b) Non current Investments
(c) Long term loans & advances
2. Current Assets
(a) Inventories
(b) Trade Receivables
(c) Cash & Cash Equivalents
B4
15.90
NIL
NIL
7.20
2.30
2.80
Total 28.20
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 12
Chapter - 15 : Company Final Account
2012 - Dec [7] (b)
Calculation of amount to be drawn from reserves for dividend:
(i) First condition: Rate of dividend must be 10% or average rate of dividend for
last 5 years, i.e. 16%, whichever is less. So, 10% is declared.
Requirement of transfer from reserves for 10% dividend (` In lakhs)
10% of ` 5,000 lakhs 500
Less : Profit available 280
Less: Preference Dividend 99 181
Balance to be drawn from Reserve 319
(ii) Second Condition: Maximum amount that can be drawn should not exceed
10% of paid up capital plus free reserves = ̀ (1,100 + 5,000 + 1,605) = ` 7,705
lakhs.
So, 10% of ` 7,705 lakhs = ` 770.05 lakhs
(iii) Third Condition: After drawing from reserves, the residual amount of reserve
should not fall below 15% of paid up capital:
Let Dividend ‘d’, Free Reserves ‘r’ and paid up capital ‘c’
As per this condition,
r – d = 15% of c
or, d = r – 15% of c
or, d = 1,605 – 15% of 6,100
= 1,605 – 915 = 690.
As per third condition, maximum amount of dividend is ` 690 lakhs.
Since ` 319 lakhs is less than the amount available as per condition 2 and 3. Hence,
the 10% dividend can be paid.
2012 - Dec [8] (a), (d)
(a) Sec.205 deals with sources for payment of dividend and other conditions. The
sources for payment of dividend are:
(i) Out of current years profit
(ii) Out of previous year
(iii) Out of the aggregate of profit mentioned in (i) and (ii) above, in all the above
cases proper provision for depreciation has to be made
(iv) Out of state subsidies
Apart from above sources, dividends can be paid out of profits made on sale of assets
subject to the fulfillment of certain conditions.
(d) Contingent liability can be termed as an obligation relating to an existing condition
or situation which may arise in future depending on the occurance or non-
occurrence of one or more uncertain future events- For example, a company may
have certain pending litigation, assessments made by tax authorities which are
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 13
being contested etc, Which might result in company incurring financial liability in
future and in all such cases, the amounts involved are shown as contingent liability.
Contingent liabilities are classified under the following head:-
(i) Claims against the company not acknowledged as debts
(ii) Uncalled liability on shares partly paid
(iii) Areas of fixed cumulative dividend
(iv) Estimated amount of contracts remaining unexecuted on capital account not
provided for, and
(v) Other money for which the company is liable contingently.
Chapter - 16 : Accounting of Construction Company
2012 - Dec [5] (a)
In the books of Khelaram
Contract A/c for the year ended on 30.6.2012
Particulars Amount Particulars Amount
To Material 2,00,000 By Balance c/d
To Labour 90,000 Material at site 8,000
To Depreciation on Plant 12,000 Closing WIP
(60,000 × 20%) Work certified 6,00,000
To Misc. Expenses 30,000 Work uncertified 20,000
To Notional Profit 2,96,000
6,28,000 6,28,000
To P and L A/c W.N. (3) 2,62,595 By National Profit 2,96,000
To Work in Progress A/c 33,405
2,96,000 2,96,000
W.N. (1) Calculation of % of completion
= × 100 = × 100 = 75%
W.N. (2) Since all the estimates for 2012-2013 is given in the question, we will calculate
estimated profit to know the amount of profit to be transferred to P and L A/c.
Estimated Profit = contract Price 8,00,000
Less: Expenses incurred till date 3,24,000
Less: Expenses to be incurred 1,13,800
3,62,200
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 14
Calculation of Expenses incurred & to be incurred
Particulars 2011-2012 2012-2013
Material consumed 1,92,000
(2,00,000 !8,000)
78,000
(8,000 + 70,000)
Labour 90,000 25,000
Depreciation on Plant 12,000 4,800
Misc. Expenses 30,000 6,000
3,24,000 1,13,800
W.N.(3) Amount of Profit to be transferred to P and L A/c
= Estimated Profit ×
= 3,62,200 × = 2,62,595/-
Chapter - 20 : Insurance Companies
2012 - Dec [5] (b)
Statement Showing Closing Life Assurance
Fund as on 31.3.2012 `
Life Assurance fund before adjustment 75,00,000
Add: Claims covered under reinsurance 3,15,000
Less: Income tax 35,000
Add: Bonus in reduction of Premium 4,25,000
Less: Bonus in reduction of Premium 4,25,000
Add: Dividend from Investment 3,20,000
Less: Claims intimated but not paid 8,15,000
Add: O/s Premium 25,000
Life Assurance Fund 73,10,000
Chapter - 21 : Interpretation of Financial Statement
2012 - Dec [7] (a)
Working Note
(a) = 2.5 times
Net worth =
� Net worth = 14,40,000
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 15
(b) = 80%
= .80
� Total Debt = 11,52,000/-
(c) = 25%
= 0.25%
CL = 3,60,000
(d) Current Ratio =
=
� C.A. = 10,80,000/-
(e) Inventory Turnover ratio =
6 times =
� Closing Stock = 6,00,000/-
(f) Average collection period = × 360
40 = × 360
� Debtors = 4,00,000/-
(g) =
=
� F.A. = 15,12,000/-
(h) =
Share Capital + R & S = Net worth
� Share Capital = 14,40,000 ! R & S
� =
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 16
11,52,000 ! 0.80 R & S = R & S
� R & S = = 6,40,000/-
� Share capital = 8,00,000/-
Balance Sheet of.................................
Liabilities Amount ` Assets Amount `
Share Capital 8,00,000 Fixed Assets 15,12,000
R & S 6,40,000 Current Assets
Long term loans
(11,52,000 & 3,60,000)
7,92,000 Inventory 6,00,000
Current Liabilities 3,60,000 Debtors 4,00,000
Cash & Bank 80,000
25,92,000 25,92,000
Chapter - 22 : Objective Questions
2012 - Dec [1] {C} (a), (b), (c), (d)
(a) (i) (B) Under Subscription: If applications received are for less shares than
issued, known as under Subscription resulting into under writers liability.
(ii) (C) Dissolution of the firm: At the time of Admission/ Retirement of a
partner, revaluation account is opened but at the time of dissolution of a
firm, realisation a/c is opened.
(iii) (A) Outstanding cash price: In the hire purchase system H.P. price= Cash
Price + Interest In this system, interest will be calculated every time on
outstanding principle amount ie cash price. Therefore option (B) is not
correct. Option (C) is also not correct because instalment amount
includes both Principle And Interest.
(iv) (A) Sales of each department: Bad debt is treated as selling and
distribution expenses, therefore it will be apportioned on the basis of
sales of each department. It is related to value only therefore option (B)
and (C) is not correct.
(v) (B) Purchases return A/c: At the time of purchase return, following journal
entry is passed- creditors A/c _______ Dr.
To purchase return A/c
Therefore option (B) is Correct. Options (A) and (C) are incorrect since
these accounts will be debited not credited.
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 17
(vi) (C) Insurance company: Calcucation of liability related to human life is varycomplex, therefore Insurance company normally takes the services ofActuary ( who are the technical experts) in case of valuation of liability
(vii) (A) Available for use: As per As 26 “Intangible Assets” amortisation ofsoftwares should start when the asset is available for use and not put touse.
(viii) (B) An asset that ceases to generate income: Non performing asset is anadvance if recovery of interest or instalment of principal is doubtful or ifthe account is out of order. In case the advance becomes NPA, the bankceases to charge interest until it is received. Therefore option (B) iscorrect.
(ix) (B) Debit prior period expenditure: Example Rent paid in April 2013
` 1,00,000 includes 60,000 for the month of March 2013. The Journalentry will be:-
Rent A/c Dr. 40,000Prior period expenses A/c Dr. 60,000(Rent)To cash/ Bank A/c 1,00,000
Therefore option (B) is correct
(x) (C) Receipt and Payment A/c: In case of receipt of donation, the followingentry will be passed Cash/Bank A/c Dr.To capital fund A/cTherefore option (C) is correct
(b) (i) True: Surrender of shares means voluntary return of the shares by theshareholder to the company. In such case the company may escape to complythe formalities of forfeiture of shares. Therefore the above statement is true.
(ii) False: Reserve for unexpired risk is created in case of General Insurancebusiness.
(iii) False: Rebate on bills discounted is the unearned income of the bank, thereforeit will be shown in the Schedule 5 “other liabilities”. They are not assets for thebank.
(iv) True: Double Account System is a system of processing the final accounts ofcertain statutory companies formed by special acts of the parliament likeelectricity company.In this system, in place of P and L A/c a revenue A/c is prepared and in placeof P and L Appropriation A/c, a net revenue A/c is prepared.In place of traditional B/s, following statements are being prepared:(a) Statement of share & loan capital,(b) Statement of Capital Expenditure
(c) General Balance Sheet
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 18
(v) True: Current assets = Liquid assets + stock in trade Liquid assets = Cash in
hand + Bank balance + Debtors + B/R.
(c) (i) Fictitious assets
(ii) Net realisable value
(iii) Does not
(iv) Sale
(v) Total assets
(d) (i) AS 3 — (B) Cash Flow Statement
(ii) AS 6 — (A) Depreciation Accounting
(iii) AS 9 — (D) Revenue recognition.
(iv) AS 16 — (C) Borrowing Cost
(v) AS 22 — (E) Accounting for tax on income.
Question Paper of June - 2013
Chapter - 2 : Depreciation Accounting
2013 - June [4] (c) On 31st December, 2011 two machines which were purchased on
1.10.2008 costing ̀ 50,000 and ̀ 20,000 respectively had to be discarded and replaced
by two new machines costing ` 50,000 and ` 25,000 respectively.
One of the discarded Machine was sold for ` 20,000 and other for ` 10,000. The
balance of Machinery Account on April 1, 2011 was ` 3,00,000 against which the
depreciation provision stood at ` 1,50,000. Depreciation was provided @ 10% onReducing Balance Method.Prepare the Machinery Account, Provision for Depreciation Account and MachineryDisposal Account. (5 marks)
Chapter- 3 : Accounting for Inventory
2013 - June [5] (b) The cost of production of Product X is ̀ 450 which includes per unit
cost of Material, Labour and overheads of ̀ 250, ̀ 110 and ̀ 90 respectively. At the end
of the accounting year on 31.03.2013 the replacement cost of Raw Material is ̀ 210 perunit.There are 500 units of raw material in stock on 31.03.2013.Calculate as per AS-2 the value of closing stock or Raw Material when:
(i) Finished Product is sold at ` 420 per unit,
(ii) Finished Product sold at ` 490 per unit. (5 marks)
Chapter- 4 : Capital and Revenue Expenditure
2013 - June [4] (a) State whether the following items are in the nature of Capital,Revenue and/or Deferred Revenue Expenditure:
(i) Expenditure on special advertising campaign ̀ 66,000; suppose the advantage
will be received for six years.
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(ii) An amount of ` 8,000 spent as legal charges for abuse of Trade Mark.
(iii) Legal charges of ` 15,000 incurred for raising loan.
(iv) Share issue expenses ` 5,000.
(v) Freight charges on a new machine ̀ 1,500 and erection charges ̀ 1,800 for that
machine. (1 × 5 = 5 marks)
Chapter - 5 : Royalty Accounts
2013 - June [3] (a) Explain what is meant by fixed rights and fluctuating rights in
recoupment of short working. (2 marks)
Chapter - 6 : Hire Purchase and Instalment Payment
2013 - June [3] (b) On 1st April, 2010 Guru purchased a machinery for cash price of
` 5,06,872 on hire purchase system from Machinery Mart. Payment to be made
` 1,50,000 down and the balance by four equal annual instalments. Interest is charged
@ 15% per annum. Guru depreciates machinery at 20% per annum on written down
value method. Guru paid down payment and first two instalments but could not pay the
remaining instalments. On 31st March, 2013 the Machinery Mart took possession of
machinery.
You are required to prepare Machinery Account and Machinery Mart Account in the
books of Guru. (7 marks)
Chapter - 7 : Accounting for Non Profit Making Organization
2013 - June [5] (a) Jodhpur Club furnishes you the Receipts and Payments Account
for the year ended 31.03.2013:
Receipts ` Payment `
Cash in hand (1.4.2012)
Cash at Bank (1.4.2012)
Donations
Subscriptions
Entrance fee
Interest on investments
Interest from banks
Sale of old newspaper
Sale of drama tickets
40,000
1,00,000
50,000
1,20,000
10,000
1,000
4,000
1,500
10,500
Salary
Repair expenses
Furnitures
Investments
Misc. expenses
Insurance premium
Billiards table and other
sports items
Stationery expenses
Drama expenses
Cash in hand (31.03.2013)
Cash at Bank (31.03.2013)
20,000
5,000
60,000
60,000
5,000
2,000
80,000
1,500
5,000
26,500
72,000
3,37,000 3,37,000
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 20
Additional information:
(i) Subscriptions in arrear for 2012 - 13 ̀ 9,000 and subscription in advance for the
year 2013-14 ` 3,500.
(ii) ` 400 was the insurance premium outstanding as on 31.03.2013.
(iii) Miscellaneous expenses prepaid ` 900.(iv) 50% of donation is to be capitalized.(v) Entrance fees to be treated as revenue income.(vi) 8% interest has accrued on investments for five months.
(vii) Billiards table and other sports equipments costing ` 3,00,000 were purchased
in the financial year 2011-12 and of which ` 80,000 was not paid 31.03.2012.There is no charge for Depreciation to be considered.
You are required to prepare Income and Expenditure Account for the year ended31.03.2013 and Balance sheet of the Club as at 31.03.2013. (10 marks)
Chapter - 8A : Partnership-Fundamental
2013 - June [4] (b) A, B and C started a partnership firm on 1.1.2012. A introduced
` 10,000 on 1.1.2012 and further introduced ̀ 4,000 on 1.7.2012. B introduced ̀ 25,000
at first on 1.1.2012 but withdraw ̀ 5,000 from the business on 31.9.2012. C introduced
` 15,000 at the beginning on 1.1.2012, increased it by ̀ 5,000 on 1.4.2012 and reduced
it to ` 10,000 on 1.11.2012.
During the year 2012 they made a net profit of ` 75,500. The partners decided toprovide interest on their capitals at 10% p.a. and to divide the balance of profit in theireffective capital contribution ratio.Prepare the Profit and Loss Appropriation Account for the year ended 31.12.2012.
(5 marks)
2013 - June [8] Write Short Notes :(e) Guaranteed Partnership. (5 marks)
Chapter - 8E : Dissolution of Partnership
2013 - June [2] (c) Ram, Rahim and Robert are partners in a firm sharing profits andlosses in the proportion of 3 : 3 : 2. Their Balance Sheet as on 31.03.2013 was asfollows:
Liabilities ` Assets `
Partners Capital Accounts:
Ram
Rahim
Robert
75,000
75,000
1,00,000
2,50,000
Bank
Stock
Investments
Debtors
Land and Building
55,000
69,000
6,000
70,000
1,25,000
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Partners Current Account:
Ram
Rahim
Robert
Sundry creditors
15,000
25,000
12,500 52,500
47,500
Goodwill 25,000
3,50,000 3,50,000
They decided to dissolve the firm on 01.04.2013. They report the result of realization asfollows:
Land and Buildings 90,000 — realized in cashDebtors 60,000 — realized in cashInvestments 5,500 — taken over by RamStock 75,500 — taken over by RahimGoodwill 18,000 — taken over by Robert
The realization expenses amounted to ` 2,000. Close the Accounts of the firm.(5 marks)
Chapter - 9 : Branch Accounts
2013 - June [2] (b) A Company with its Head Office at Kolkata has a Branch at
Chennai. The Branch receives all goods from Head Office who remits cash for all
expenses. Total Sales by Branch for year ended 31.03.2012 amounted to ` 6,50,000
out of which 75% on Credit. Other details for Chennai Branch were as under:
01.04.2011 31.03.2012
Stock 4,000 30,000
Debtor 45,000 30,000
Petty Cash 250 —
Petty Cash sent by Head Office ` 3,000 but ` 2,500 is spent for Petty Expenses. The
Expenses of ` 45,000 are actually spent by Branch. All sales are made by the Branch
at Cost plus 25%.
You are required to prepare the Chennai Branch A/c in the Books of Head Office for the
year ended 31.03.2012. (5 marks)
Chapter - 10 : Departmental Accounts
2013 - June [6] (a) Distinguish between Branch and Departmental Accounting.
(2 marks)
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(c) Surya Co. Ltd. has three departments.In made purchases during the financial year 2012-13 as below
at a total cost of ` 2,00,000
Stock as on 01.04.2012Dept. A = 240 unitsDept. B = 160 unitsDept. C = 304 units
Sales made were
Dept. A 2040 units at ` 20 each
Dept. B 3840 units at ` 22.50 each
Dept. C 4992 units at ` 25 eachThe rate of gross profit is uniform for all the departments. Assume the unit price ofopening stock and purchase unit cost are uniform.Prepare Departmental Trading Account. (7 marks)
Chapter - 11 : Accounting Standards
2013 - June [8] Write Short Notes :
(d) Segment Reporting (AS 17); (5 marks)
Chapter - 12 : Issue and Forfeiture of Share
2013 - June [3] (c) X Co. Ltd. decided to buyback 10,000 equity shares of ` 10 each.
It sold investments (Face value) ` 70,000 for ` 95,000. It bought 10,000 equity shares
in the open market for ` 90,000 out of free reserves. The shares bought back were
cancelled. The expenses of buyback was ` 1,000.Pass necessary journal entries in the books of X Co. Ltd. to record the abovetransactions. (6 marks)
2013 - June [8] Write Short Notes :(a) Over/Under subscription; (5 marks)
Chapter - 14 : Issue and Redemption of Debenture
2013 - June [7] (c) Esteem Ltd. made the following issue of debentures in May 2012:
(i) 2000, 11% debentures of ` 100 each was issued to a creditor who supplied
a machine for ` 1,80,000.
(ii) 3000, 11% debentures of ` 100 each at a premium of 5%.
(iii) 1000, 11% debentures of ` 100 each to the Bankers as collateral security for
a loan of ` 70,000.
Pass journal entries to record the above transactions in the Books of Esteem Ltd.
(4 marks)
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Chapter - 15 : Company Final Account
2013 - June [2] (a) Prepare the Balance Sheet as at 31.03.2012 from the particulars
furnished by M/s PRAN Ltd. as per revised Schedule VI of the Companies Act:
Particulars Amount (`) Particulars Amount (`)
Share Capital 7,50,000 Capital Redemption Reserve 20,000
Calls in Arrear 5,000 Investment in 6% GP Notes
(Tax Free)
3,00,000
Land 2,20,000 Profit and Loss Account 65,000
Building 2,00,000 Cash in Hand 25,000
General Reserve 50,000 Debtor 10,000
Loan from IDBI 1,00,000 Stock 1,00,000
Sundry Creditors 1,50,000 Goodwill 25,000
(5 marks)
2013 - June [6] (b) The following items are extracted from the Balance Sheet of Best
Ltd. as at 1st April, 2012:
`
(i) 9% Preference Shares of ` 100 each 50,00,000
(ii) Equity Shares of ` 10 each (` 8 paid up) 80,00,000
(iii) General Reserve 26,00,000
(iv) Securities Premium 20,00,000
(v) 12% Debentures 40,00,000
Profit before interest and tax for the year ending on 31.03.2013 was ` 44,80,000.
The Board of Directors of the Company proposed payment of Preference Share
Dividend and Equity Share Dividend @ 20%. The Board also declared Capital Bonus
out of General Reserve for making partly paid-up shares into fully paid-up. Ignore
Corporate Dividend Tax.
Provision to be made for Taxation @ 30%.
7.5% of Net Profit to be transferred to General reserve.
You are required to show the Journal entries to be passed to incorporate the
Recommendations and adjustments. (6 marks)
Chapter - 18 : Banking Companies
2013 - June [8] Write Short Notes :
(b) Rebate on Bills Discounted; (5 marks)
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Chapter - 20 : Insurance Companies
2013 - June [7] (a) BISLA Life Insurance Company furnishes you the following
information:
Life Insurance fund on 31.03.2012 1,40,00,000
Net Liability on 31.03.2012 as per Actuarial Valuation 1,20,00,000
Interim Bonus paid to Policy holders during Intervaluation Period 2,50,000
You are required to prepare:
(a) Valuation Balance Sheet
(b) Statement of Net Profit for the Valuation Period. (3 marks)
2013 - June [8] Write Short Notes :
(c) Commission on Reinsurance ceded/accepted; (5 marks)
Chapter - 21 : Interpretation of Financial Statement
2013 - June [7] (b) Following are the ratios relating to the trading activities of ChinuLtd.:
Gross Profit Ratio 30%Debtors/Receivables Turnover Ratio 5 timesCreditors Turnover Ratio 4 timesStock Turnover Ratio 5 times
Gross Profit for the year ended 31st March, 2013 amounted to ` 8,40,000. Opening
debtors of the year were ̀ 64,000 above the closing debtors. Closing Stock of the yearwas 125% of the Opening Stock. Opening Creditors were 20% of the purchases for theyear.You are required to find out the : (i) Sales; (ii) Purchases (equal to cost of goods sold);(iii) Opening and Closing Debtors. (iv) Opening and Closing Creditors; (v) Opening andClosing Stocks. (8 marks)
Chapter - 22 : Objective Questions
2013 - June [1] {C} (a) From the four alternatives given against each of the following
cases, indicate the correct answer: (just state a, b, c or d)
(i) At the year end, an amount outstanding for electricity consumed during that yearwill be dealt in the Accounts for the year by following the accounting concept of(a) Realisation(b) Accrual(c) Conservatism(d) None of the above
(ii) Contingent Liability would appear(a) On the liability side(b) On the asset side(c) As a note in Balance Sheet (d) None of the above
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 25
(iii) The effect of timing difference is called as(a) Current Tax(b) Deferred Tax(c) Minimum Tax (d) None of the above
(iv) At the time of public issue of shares the sequence of steps taken are(a) Issue prospectus > Select Merchant Banker > Receive money from
applicants(b) Select Merchant Banker > Receive money from applicants > Issue
prospectus(c) Select Merchant Banker > Issue prospectus > Receive money from
applicants (d) None of the above
(v) Interest and Dividends received in the case of a manufacturing concern shouldbe classified as cash flow from(a) Operating activities(b) Financing activities(c) Investing activities(d) None of the above
(vi) Redemption of Preference Share of a Company is (a) Compulsory(b) Optional(c) Conditional(d) None of the above (1 x 6 = 6 marks)
(b) State whether the following statements are TRUE (T) or FALSE (F):
(i) Sinking fund method of depreciation takes into account the cost of an asset
as well as interest also thereon at given rate .
(ii) Purchase of a technical know-how is revenue expenditure.
(iii) Transactions are recorded on accrual basis in the ‘Income and Expenditure
Account’.
(iv) When the goods are returned by Branch, goods sent to Branch account will
be debited in the books of Head Office.
(v) Balance of securities premium account is available for redemption of
preference shares. (1 x 5 = 5 marks)
(c) Fill up the blanks in the following sentences using appropriate word from thealternatives indicated:
(i) Royalty account is a _____________ account in nature (nominal/real).(ii) The excess of issue price of share over their face value is termed as
_____________ (discount/securities premium).(iii) Revenue nature receipts and payments which relates to a particular
accounting period are shown in the _____________ account (Receipts andPayments/ Income and Expenditure).
Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 26
(iv) As per AS-26, at the preliminary project stage the internally generatedsoftware should ______________ recognised as an asset (be/not be).
(v) As per Indian Companies Act, maximum limit of managerial remunerationfor full time single managerial personnel is ______________ (5%/3%).
(1 x 5 = 5 marks)(d) Match the following in Column I with the appropriate in Column II:
Column I Column II
(i) Repossess the goods (a) AS-26
(ii) Non Performing Assets (b) Banking Companies
(iii) Intangible Assets (c) Piecemeal distribution
(iv) Related Party Disclosures (d) Hire Purchase System
(v) Maximum Loss Method (e) AS-28
(f) No matching statement found
(1 x 5 = 5 marks)(e) In the following cases, one out of four answers is correct. Indicate the correct
answer (=1 mark) and give brief workings in support of your answer (=1 mark):(i) Working capital of a company is ̀ 21,28,000 and total debts are ̀ 42,50,000.
If the company’s long term debts are ` 27,30,000 then current ratio will be(a) 0.78 :1 (b) 1.4 : 1 (c) 1.14 : 1 (d) 2.4 : 1
(ii) A and B are partners sharing profit/loss in the ratio of 3 : 2. They admit C intopartnership for 1/6 share in the profit which he aquired equally from the oldpartners. The new profit sharing ratio will be
(a) 3 : 2 : 1 (b) 1 : 1 : 1 (c) 31 : 19 : 10 (d) 14 : 6 : 4((1 + 1) x 2 = 4 marks)
Shuchita Prakashan (P) Ltd.25/19, L.I.C. Colony, Tagore Town,
Allahabad - 211002Visit us : www.shuchita.com
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Solved Scanner Appendix CMA (CWA) Inter Gr. I Paper 5 28
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