IPCC WEEKEND EXAM

Sub: Accounts Time : 1 Hr Date: 30-1-2011 Marks: 30

1. On 1.4.2008, Sundar had 25,000 equity shares of X Ltd. at a book value of Rs.15 per share (Face value Rs.10). On 20.6.2008, he purchased another 5,000 shares of the company at Rs.16 per share. The directors of X Ltd. announced a bonus and rights issue. No dividend was payable on these issues. The terms of the issue are as follows: Bonus basis 1:6 (Date 16.8.2008). Rights basis 3:7 (Date 31.8.2008) Price Rs.15 per share. Due date for payment 30.9.2008. Shareholder can transfer their rights in full or in part. Accordingly Sundar sold 33.33% of his entitlement to Sekhar for a consideration of Rs.2 per share. Dividends: Dividends for the year ended 31.3.2008 at the rate of 20% were declared by X Ltd. and received by Sundar on 31.10.2008. Dividends for shares acquired by him on 20.6.2008 are to be adjusted against the cost of purchase. On 15.11.2008, Sundar sold 25,000 equity shares at a premium of Rs.5 per share. You are required to prepare in the books of Sundar. (1) Investment Account (2) Profit & Loss Account. For your exercise, assume that the books are closed on 31.12.2008 and shares are valued at average cost. 2. A fire occurred on 1st October, 2007 in the premises of X Co. Ltd. From the following figures, calculate the amount of claim to be lodged with the insurance company for loss of stock: (all figures in rupees) Stock at cost on 1.1.2006 90,000 Purchases from 1.1.2007 to 6,00,000 30.9.2007 Stock at cost on 1.1.2007 70,000 Sales during 2006 6,00,000 Purchases during 2006 4,00,000 Sales from 1.1.2007 to 8,80,000 30.9.2007 You are informed that: (a) In 2007 the cost of purchases has risen by 20% over the levels prevailing in 2006; (b) In 2007 the selling prices have gone up by 10% over the levels prevailing in 2006; and (c) Salvaged value is Rs.5,000. 3. A fire occurred on 1st February, 2008, in the premises of Pioneer Ltd., a retail store and business was partially disorganized up to 30th June, 2008. The company was insured under a loss of profits for Rs.1,25,000 with a six months period indemnity. From the following information, compute the amount of claim under the loss of profit policy. Rs. Actual turnover from 1st February to 30th June, 2008 80,000 Turnover from 1st February to 30th June, 2007 2,00,000 Turnover from 1st February, 2007 to 31st January, 2008 4,50,000 Net Profit for last financial year 70,000 Insured standing charges for last financial year 56,000 Total standing charges for last financial year 64,000 Turnover for the last financial year 4,20,000 The company incurred additional expenses amounting to Rs.6,700 which reduced the loss in turnover. There was also a saving during the indemnity period of Rs.2,450 in the insured standing charges as a result of the fire. There had been a considerable increase in trade since the date of the last annual accounts and it has been agreed that an adjustment of 15% be made in respect of the upward trend in turnover.