7948final_adv_acc_nov05.pdf - PAPER \u2013 1 ADVANCED ACCOUNTING Answer all questions Working notes should form part of the answer Question 1 On 31st March

7948final_adv_acc_nov05.pdf - PAPER – 1 ADVANCED...

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PAPER – 1 : ADVANCED ACCOUNTING Answer all questions. Working notes should form part of the answer. Question 1 On 31st March, 2004 Bee Ltd. became the holding company of Cee Ltd. and Dee Ltd. by acquiring 450 lakhs fully paid shares in Cee Ltd. for Rs. 6,750 lakhs and 240 lakhs fully paid shares in Dee Ltd. for Rs. 2,160 lakhs. On that date, Cee Ltd. showed a balance of Rs. 2,550 lakhs in General Reserve and a credit balance of Rs. 900 lakhs in Profit and Loss Account. On the same date, Dee Ltd. showed a debit balance of Rs. 360 lakhs in Profit and Loss Account while its Preliminary Expenses Account showed a balance of Rs. 30 lakhs. After one year, on 31st March, 2005 the Balance Sheets of three companies stood as follows: (All amounts in lakhs of Rupees) Liabilities Bee Ltd. Cee Ltd. Dee Ltd. Fully paid equity shares of Rs. 10 each 27,000 7,500 3,000 General Reserve 33,000 3,150 - Profit and Loss Account 9,000 1,200 750 15 lakh fully paid 9.5% Debentures of Rs. 100 each - - 1,500 Loan from Cee Ltd. - - 75 Bills Payable - - 150 Sundry Creditors 14,100 2,700 930 83,100 14,550 6,405 (All amounts in lakhs of Rupees) Assets Bee Ltd. Cee Ltd. Dee Ltd. Machinery 39,000 7,500 2,100 Furniture and Fixtures 6,000 1,500 600 Investments: 450 lakhs shares in Cee Ltd. 6,750 - - 240 lakhs shares in Dee Ltd. 2,160 - - 3 lakhs debentures in Dee Ltd. 294 - - Stocks 16,500 3,000 1,500 Sundry Debtors 9,000 1,350 1,290
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FINAL EXAMINATION : NOVEMBER, 2005 4 Cash and Bank balances 3,201 1,050 900 Loan to Dee Ltd. - 90 - Bills Receivable 195 60 - Preliminary Expenses - - 15 83,100 14,550 6,405 The following points relating to the above mentioned Balance Sheets are to be noted: (i) All the bills payable appearing in Dee Ltd.’s Balance Sheet were accepted in favour of Cee Ltd. out of which bills amounting to Rs. 75 lakhs were endorsed by Cee Ltd. in favour of Bee Ltd. and bills amounting to Rs. 45 lakhs had been discounted by Cee Ltd. with its bank. (ii) On 29th March, 2005 Dee Ltd. remitted Rs. 15 lakhs by means of a cheque to Cee Ltd. to return part of the loan; Cee Ltd. received the cheque only after 31st March, 2005. (iii) Stocks with Cee Ltd. includes goods purchased from Bee Ltd. for Rs. 200 lakhs. Bee Ltd. invoiced the goods at cost plus 25%. (iv) In August, 2004 Cee Ltd. declared and distributed dividend @ 10% for the year ended 31st March, 2004. Bee Ltd. credited the dividend received to its Profit and Loss Account. You are required to prepare a Consolidated Balance Sheet of Bee Ltd. and its subsidiaries Cee Ltd. and Dee Ltd. as at 31st March, 2005. (16 Marks) Answer Consolidated Balance Sheet of Bee Ltd. and its subsidiaries Cee Ltd. and Dee Ltd. as at 31st March, 2005 Liabilities Rs. in lakhs Assets Rs. in lakhs Share Capital Fixed Assets Authorised ? Goodwill (W.N. 3) 246 Issued and subscribed Machinery 48,600 Fully paid equity shares of Rs. 10 each 27,000 Furniture and Fixtures 8,100 Minority interest (W.N. 2) 5,487 Current Assets, Loans and Advances: Reserves and Surplus (A) Current Assets General Reserve (W.N. 4) 33,360 Stock 21,000 Profit and Loss A/c (W.N. 4) 10,040 Less: Unrealised profit 40 20,960 Secured Loans Sundry debtors 11,640 Debentures 1,200 Cash and bank balances 5,151
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PAPER – 1 : ADVANCED ACCOUNTING 5 Current Liabilities Cash in transit 15 Acceptances 150 (B) Loan and Advances Less : Mutual owing 105 45 Bills receivable 255 Sundry creditors 17,730 Less : Mutual owing (W.N. 5) 105 150 94,862 94,862
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