CA Inter Suggested answers for Accounting Subject
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CA Inter Suggested answers for Accounting Subject
CA Inter Dec 2021 Accounting Question paper:
ICAI CA Inter Dec 2021 Question 1 (a)
(i) PP Ltd. An Indian Company acquired long term finance from WW (P) Ltd, a U.S. company, amounting to Rs. 40,88,952. The transaction was recorded at US $ 1 = Rs. 72.00, taking exchange rate prevailing at the date of transaction. The exchange rate on balance sheet date (31.03.2021) is US $ 1 = Rs. 73.60.
(ii) Trade receivables of PP Ltd. Include amount receivable from Preksha Ltd, Rs. 20,00,150 recorded at the prevailing exchange rate on the date of sales, transaction recorded at US $ 1 = Rs. 73.40. The exchange rate on balance sheet date (31.03.2021) is US $ 1 = Rs. 73.60. The exchange rate on balance sheet date (31.03.2021) is US $ 1 = Rs. 73.60. Exchange rate on 1st April, 2020 is US $ 1 = Rs. 74.00.
You are required to calculate the amount of exchange difference and also explain the accounting needed in the above two cases as per AS 11 in the books of PP Ltd.
ICAI CA Inter Dec 2021 Question 1 (b)
Following are the extracts from the Balance Sheet of ABC Ltd.
| Liabilities | 31.3.2020 | 31.3.2021 |
| Equity Share Capital | 25,00,000 | 35,60,000 |
| 10% Preference Share Capital | 7,00,000 | 6,00,000 |
| Securities Premium Account | 5,00,000 | 5,50,500 |
| Profit and Loss A/c | 20,00,000 | 28,00,000 |
Equity Share Capital for the year ended 31st March, 2021 includes Rs. 60,000 of equity shares issued to Grey Ltd at par for supply of Machinery of Rs. 60,000.
Profit & Loss account on 31st March, 2021 includes Rs.50,000 of divided received on Equity Shares invested in X Ltd.
Show how the related items will appear in the Cash Flow Statement of ABC Ltd. As per AS-3 (Revised).
ICAI CA Inter Dec 2021 Question 1 (c)
Mr. Mohan has invested some money in various Mutual funds. Following information in the regard is given:
| Mutual Funds | Date of Purchase | Purchase Cost (Rs.) | Brokerage Cost (Rs.) | Stamp Duty (Rs.) | Market Value as on 31.03.2021 (Rs.) |
| A | 01.05.2017 | 50,000 | 200 | 20 | 48,225 |
| B | 05.08.2020 | 25,000 | 150 | 25 | 24,220 |
| C | 01.01.2021 | 75,000 | 300 | 75 | 78,190 |
| D | 07.05.2020 | 70,000 | 275 | 50 | 65,880 |
You are required to;
1. Classify his investment in accordance with AS-13 (revised)
2. Value of Investment in mutual fund as 31.03.2021
ICAI CA Inter Dec 2021 Question 1 (d)
(i) ABC Ltd. Was previously making provision for non-moving stocks based on not issued for the last 12 months up to 31.03.2020. Now, the company wants to make provision based on technical evaluation during the year ending 31.03.2021.
Total value of stock Rs. 133.75 lakhs.
Provision required based on technical evaluation Rs. 4.00 lakhs.
Provision required based on 12 months not issued Rs. 5.00 lakhs.
(ii) In the Books of M/s Kay Ltd, Closing stock as on 31st March, 2021 amounts to Rs. 1,24,000 (on the basis of FIFO method) The company decides to change from FIFO method to weighted average method for ascertaining the cost of inventory from the year 2020-2021. On the basis of weighted average method, closing stock as on 31st March, 2021 amount Rs. 1,15,000. Realisable value of the inventory as on 31st March, 2021 Amounts to Rs. 1,54,000.
Discuss Disclosure Requirements of change in accounting policy in above cases as per AS 1.
ICAI CA Inter Dec 2021Question 2 (a)
The Godown of X Ltd. Caught fire on 01.06.2021, records saved from fire shows the following particulars:
ICAI CA Inter Dec 2021Question 2 (a)
The Godown of X Ltd. Caught fire on 01.06.2021, records saved from fire shows the following particulars:
| Rs. | |
| Stock at cost on 01.01.2020 | 50,000 |
| Stock at cost on 31.12.2020 | 80,000 |
| Purchases for the year 2020 | 4,75,000 |
| Purchase returns for the year 2020 | 5,000 |
| Carriage inward for the year 2020 | 20,000 |
| Sales for the year 2020 | 5,60,000 |
| Sales returns for the year 2020 | 10,000 |
Following information is given for the period of 1st January 2021 to 1st June 2021.
Credit sales of Rs. 2,50,000, which constituted 25% of total sales. Sales return Rs. 9,500, Goods used for personal purpose costing Rs. 5,000, Goods Distributed as free sample costing Rs. 2,700, Wages Rs. 25,000. Sales include goods sold on approval basis amounting to Rs. 81,000, no confirmation had been received in respect of 50 % of such goods sold on approval basis.
Stock on 31 December, 2020 was calculated at 20% less than cost Purchases for the period 1st January, 2021 to 1st June, 2021 is Rs. 6,75,000, purchase Returns Rs. 10,000.
Selling price was increased by 20% with effect from 01.01.2021.
Company had taken an insurance policy of Rs. 70,000 which was subject to an Average Clause. The value of salvaged goods was Rs. 21,967. You are required to compute the amount of the claim.
ICAI CA Inter Dec 2021 Question 2 (b)
During the year ended 31st March 2021, Purple Ltd. Entered into the following transactions:
Prepare Investment accounts in the books of purple Ltd.
ICAI CA Inter Dec 2021 Question 2 (b)
During the year ended 31st March 2021, Purple Ltd. Entered into the following transactions:
| 1st April, 2020 | Purchased Rs.4,00,000,10 % Govt. loan (interest payable on 30t April and 31st October) at Rs. 70 cum interest. |
| 1st April, 2020 | Purchased 6,000 Equity shares of Rs. 5 each in XY Ltd. For Rs.1,26,000. |
| 1st October, 2020 | Sold Rs. 80,000, 10% Govt. loan at 75 ex-interest. |
| 15th January, 2021 | XY Ltd made a bonus issue of four equity shares for every three Shares held. Purple Ltd sold all of the bonus shares for b Rs.10 each. |
| 1st March, 2021 | Received divided @ 22% on shares in XY Ltd. For the year ended 31st December, 2020. |
Prepare Investment accounts in the books of purple Ltd.
ICAI CA Inter Dec 2021 Question 3 (a)
Delta Ltd. Has a branch at Kanpur. Goods are invoiced from head office of branch at cost 50% Branch remits all received to head office and all expenses are met by head office.
Prepare necessary Ledger accounts in the books of Delta Ltd under Stock and Debtors system to show profit earned at the branch for the year ending 31st March, 2021
Following information related to Branch is given
| Stock on 1st April,2020 (Invoice price) | 31,200 | Goods returned by Debtors | 3,000 |
| Surplus in stock (Invoice price) | 600 | ||
| Debtors on 1st April,2020 | 17,400 | Expenses at Branch | 13,400 |
| Goods invoiced at cost | 72,000 | Discount allowed to Debtors | 7,00 |
| Sales at Branch : Cash sales | 20,000 | Debtors on 31st March,2021 | 14,300 |
| Credit sales | 68,200 |
ICAI CA Inter Dec 2021 Question 3 (b)
| Particulars | Department X Rs. | Department Y Rs. |
| Opening stock (at Cost) | 1,40,000 | 1,08,000 |
| Purchases | 4,28,000 | 3,32,000 |
| Carriage inwards | 12,000 | 12,000 |
| Carriage Outwards | 5,000 | 4,000 |
| Wages | 42,000 | 48,900 |
| Sales | 5,70,000 | 4,74,000 |
| Purchased goods transferred by Dept. Y to Dept. X | 60,000 | |
| Purchased goods transferred by Dept. X to Dept. Y | 48,000 | |
| Finished goods transferred by Dept. Y to Dept. X | 1,60,000 | |
| Finished goods transferred by Dept. X to Dept. Y | 2,00,000 | |
| Closing Stock of purchased Goods | 24,000 | 30,000 |
| Closing Stock of Finished Goods | 1,54,000 | 1,20,000 |
| Finished goods transferred by Dept. Y to Dept. X | 1,60,000 | |
| Finished goods transferred by Dept. X to Dept. Y | 2,00,000 | |
| Closing Stock of purchased Goods | 24,000 | 30,000 |
| Closing Stock of Finished Goods | 1,54,000 | 1,20,000 |
Purchased goods have been transferred mutually at their respective departmental purchase cost and finished goods at departmental market price and that 15% of the finished stock (closing) at each department represented finished goods received from the order department.
ICAI CA Inter Dec 2021 Question 4 (a)
The Following is the summarized Balance Sheet of R Limited as at 31st March, 2021
| Liabilities | |
| Authorised Capital | |
| 1,50,000 Equity shares of Rs. 10 each | 15,00,000 |
| 30,000 Redeemable preference shares of Rs. 100 each | 30,00,000 |
| 45,00,000 | |
| Issued, subscribed and paid up | |
| 90,000 Equity shares of Rs. 10 each | 9,00,000 |
| 15,000 Redeemable Preference shares of Rs. 100 each | 15,00,000 |
| Reserves & surplus | |
| Securities Premium | 18,00,000 |
| General Reserve | 16,50,000 |
| Profit & Loss A/c | 1,20,000 |
| 7500, 9% Debentures of Rs. 100 each | 7,50,000 |
| Sundry Creditor | 2,12,500 |
| 69,32,500 | |
| Assets | |
| Non-Current Assets | |
| Property Plant & Equipment | 31,60,000 |
| Investments ( Market Value Rs.17,40,000) | 14,70,000 |
| Debtors | 17,60,000 |
| Cash & Bank Balance | 5,42,500 |
| 69,32,500 |
- To redeem 10% preference shares at a premium of 50%
- To redeem 9% Debentures by making offer to Debenture holders to convert their holding into equity shares at Rs. 40 per share or accept cash on redemption.
- To issue fully paid bonus shares in the ratio of one equity share for every three shares held on 31st March, 2021.
- Redemption of preference shares and debenture will be paid through company’s cash & bank balance subject to leaving a minimum cash & bank balance of Rs. 2,00,000
- To issue sufficient number of equity shares @ Rs.40 per share as required to finance redemption of preference shareholders and debenture holders.
30% of Debenture holders exercised their option to accept cash and their claims were settled on 1st August, 2021.
The bonus issue was concluded by 10th August 2021.
You are requested to journalize the above transactions including cash transactions and prepare Balance Sheet as at 30th September, 2021. All working notes should form part of your answer.
You are requested to journalize the above transactions including cash transactions and prepare Balance Sheet as at 30th September, 2021. All working notes should form part of your answer.
ICAI CA Inter Dec 2021 Question 5 (a)
Peek Ltd was incorporated on 01.07.2020 to take over the existing business of Rich & Co. with effect from 01.04.2020. Date of closing books of accounts is 31.03.2021.
The sales per month in the first half year were half of what they were in the later half year.
Rent of office building was paid @ Rs. 2000 p.m. up to 30th September, 2020 and thereafter it Was increased by Rs. 500 p.m.
Total sales were Rs. 75,00,000, Rate of Gross Profit is 10% on sales.
The expenses charged to profit and loss statement includes;
| Salesmen’s Commission | Rs. 30,000 |
| Discount Allowed | Rs. 15,000 |
| Carriage outward | Rs. 45,000 |
| Free Sample | Rs. 60,000 |
| After sales service charge | Rs. 90,000 |
| Directors’ fees | Rs. 1,50,000 |
| Audit fees (Statutory audit of company ) | Rs. 70,000 |
| Tax audit fees to Chartered Accountant | Rs. 15,000 |
| Salary to general staff | Rs. 16,000 |
| Formation Expenses | Rs. 30,000 |
| Rent ( office Building ) | Rs. 27,000 |
| General Expenses | Rs. 48,000 |
| Donation to political party | Rs. 54,000 |
| General travelling Expenses | Rs. 60,000 |
The sales per month in the first half year were half of what they were in the later half year.
Rent of office building was paid @ Rs. 2000 p.m. up to 30th September, 2020 and thereafter it Was increased by Rs. 500 p.m.
Prepare a statement showing pre incorporation & post incorporation profit for the year ended 31.03.2021 and also compute the amount to be transferred to capital reserve account.
ICAI CA Inter Dec 2021 Question 5 (b)
ABC Ltd. Acquired a Machine on hire purchase from P Ltd. with term of payment is four equal annual instalments. The annual instalment is commencing from the data of agreement signed by both the parties. The payment of annual instalments is Rs.25,000 at the end of each year. The interest is Charged @ 25% and is included in the annual instalment. ABC Ltd. Could not pay third annual instalment and declared “Purchaser Defaulted” whereupon the P Ltd. act to repossess the Machinery.
ABC Ltd. is providing depreciation on Machinery at the rate of 20% per annum on the Diminishing balance method.
You are required to prepare Machinery Account and P Ltd account in the books of ABC Ltd. Working notes will form part of the answer.
ICAI CA Inter Dec 2021 Question 6 (a)
Mrs. A is showing the consolidated aggregate opening balance of equity, liabilities and assets of Rs. 6 lakhs, 4 lakhs and 10 lakhs respectively. During the current year Mrs. A has the following transactions:
1. Received 20% dividend om Rs. 10,000 equity shares of Rs. 10 each held as investment.
A Company had issued 25,000, 12% Debentures of Rs. 100 each on 1st April, 2018. The Debentures were due for redemption on 1st July, 2020. The terms of issue of Debentures provided that they will be redeemable at a premium of 5% and also conferred option to convert 20% of their holding into equity Shares (Nominal value Rs. 10 each) at a price of Rs. 20 per share.
Debenture holders holding 5,000 Debentures did not exercise the option. Calculate the number of Equity shares to be allotted to the debenture holders exercising the option to the maximum.
ICAI CA Inter Dec 2021 Question 6 (e)
You are required to prepare Machinery Account and P Ltd account in the books of ABC Ltd. Working notes will form part of the answer.
ICAI CA Inter Dec 2021 Question 6 (a)
Mrs. A is showing the consolidated aggregate opening balance of equity, liabilities and assets of Rs. 6 lakhs, 4 lakhs and 10 lakhs respectively. During the current year Mrs. A has the following transactions:
1. Received 20% dividend om Rs. 10,000 equity shares of Rs. 10 each held as investment.
2. The amount of Rs. 70,000 is paid to creditors for settlement of Rs. 90,000.
X Ltd. a non-investment company has been incurring losses for the past few Year. company provides the following information for the current year:
3. Salary is pending by Rs. 20,000.
You are required to prepare the statement of the effect of aforesaid each transactions on closing balance sheet in the form of Assets – Liabilities = Equity after each transaction.
ICAI CA Inter Dec 2021 Question 6 (b)
4. Mrs. A’s drawing Rs. 20,000 for her personal use.
You are required to prepare the statement of the effect of aforesaid each transactions on closing balance sheet in the form of Assets – Liabilities = Equity after each transaction.
ICAI CA Inter Dec 2021 Question 6 (b)
X Ltd. a non-investment company has been incurring losses for the past few Year. company provides the following information for the current year:
| Rs. in lakhs | |
| Paid up equity share capital | Rs.Rs.90 |
| Paid up preference share capital | Rs.Rs.10 |
| Reserves (including revaluation reserve Rs.5 lakhs | Rs.75 |
| Securities premium | Rs.30 |
| Long term loans | Rs.20 |
| Deposit repayable after one year | Rs.10 |
| Application money pending allotment | Rs.360 |
| Accumulated losses not written off | Rs.40 |
| Investment | Rs.60 |
X Ltd. has only one whole time director, Mr Y. You required to calculate the amount of maximum remuneration that can be paid to him if no special resolution is respect of payment of remuneration for period not exceeding three years.
ICAI CA Inter Dec 2021 Question 6 (c)
What is meant by ‘Measurement’? What are the bases of measurement of Element of Financial Statements? Explain in brief.
ICAI CA Inter Dec 2021 6 (d)
ICAI CA Inter Dec 2021 Question 6 (c)
What is meant by ‘Measurement’? What are the bases of measurement of Element of Financial Statements? Explain in brief.
ICAI CA Inter Dec 2021 6 (d)
A Company had issued 25,000, 12% Debentures of Rs. 100 each on 1st April, 2018. The Debentures were due for redemption on 1st July, 2020. The terms of issue of Debentures provided that they will be redeemable at a premium of 5% and also conferred option to convert 20% of their holding into equity Shares (Nominal value Rs. 10 each) at a price of Rs. 20 per share.
Debenture holders holding 5,000 Debentures did not exercise the option. Calculate the number of Equity shares to be allotted to the debenture holders exercising the option to the maximum.
ICAI CA Inter Dec 2021 Question 6 (e)
A Company sold 20% of the Goods on Cash Basis and the balance on Credit basis. Debtors are allowed 1.5 month’s credit and their balance as on 31st March, 2021 is V 1,50,000. Assume that sale is evenly spread throughout the year.
Purchases during the year Rs.9,50,000.
Closing stock is Rs.10,000 less than the Opening Stock. Average stock maintained during the year Rs.60,000
Direct Expenses amounted to Rs.35,000.
Calculate Credit sales, Total sales and gross profit for the year vended 31st March, 2021.
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ICAI CA Dec 21 Suggested Answers | Accounting - Day 1
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