Maximum Marks: 51 Time Allowed: 120 Minutes Date: 29 April 2025

Syllabus: Corporate Accounting Full Syllabus

Instructions:
▪ Part A is Compulsory. All MCQs questions are to be solved.
▪ Part B:
Q2 – Q6: Solve any 3 Questions out of the 5 Questions. [7 Marks x 3 Questions = 21 Marks]
Q7 & Q8: Solve any 1 Questions out of the 2 Questions [14 Marks x 1 Questions = 14 Marks]
▪ Number your answers clearly and start each new question on a fresh page.
▪ Workings and notes must be shown clearly wherever required.
▪ Scan your answer sheets properly (in order) after completion. Upload the answer-sheet in PCA App
only. In case of any issues, you may contact PCA Office after completion of Paper on 8888111034.
▪ No late submissions will be entertained without prior permission.
▪ Treat these tests with full seriousness - they are a rehearsal for your real exam.

PART A - OBJECTIVE QUESTIONS

Q1. Multiple Choice Questions [8 Questions x 2 Marks = 16 Marks]

(i) In determining the number of shares to be bought back, which of the following tests is not
relevant as per Section 68 of the Companies Act, 2013?
(a) Share outstanding test (b) Resource test

(c) Current ratio test (d) Debt-equity ratio test

(ii) Cash payment to suppliers is a part of_______________under direct method.

(a) cash flow from operating activities (b) cash flow from investing activities
(c) cash flow from financing activities (d) cash flow from non-operating activities

(iii) Trade receivable likely to be settled within the normal operating cycle is____________.
(a) current assets (b) current liabilities
(c) non-current assets (d) non-current liabilities
(iv) Salary payable per day Rs. 1,000; Working days 300; Leave unutilized during the year 3
days; unutilized leaves are not allowed to be carried forward, but are settled through
payment. What is the expense to be recognised as per Ind AS 19?
(a) Rs. 3,00,000 (b) Rs. 3,30,000 (c) Rs. 3,30,000 (d) Rs. 3,000

(v) Which of the following is not treated as Cash Flow from operating activities in Cash Flow
Statement?
(a) Cash Receipts from Sale of goods
(b) Cash Receipts from Royalties, Commission
(c) Cash payments for Insurance premium
(d) Cash receipts from other parties for repayment of Loans

(vi) Which of the following is/are not a criteria to classify a liability as current liability?
(a) It is expected to be settled in the company’s normal operating cycle.
(b) It is held primarily not for the purpose of being traded.
(c) It is due to be settled within twelve months after the reporting date.
(d) The company does not have an unconditional right to defer settlement of the liability for at
least twelve months after the reporting date.

(vii) In the Notes to Accounts, Contingent Liabilities shall be classified as

(a) claims against the company not acknowledged as debt
(b) guarantees
(c) other money for which the company is contingently liable
(d) All of the above

(viii) Which of the following is not a mandatory financial statement of a General Insurance
company as per IRDA regulations?
(a) Revenue Account
(b) Profit & Loss Account
(c) Balance Sheet
(d) Cash Flow Statement
 PART B – DESCRIPTIVE QUESTIONS
Solve ANY 3 out of remaining 5 Questions [Applicable from Q2 to Q6]

Q2. On 31 March 2015, following was the Balance Sheet of Limited:

Liabilities (in lakhs) Assets (in lakhs)

Equity Share Capital (Rs. 10) 2,400 Machinery 3,600

Securities Premium 350 Furniture 452

General Reserve 930 Investments 148

Profit and Loss Account 340

Current Liabilities 2,640 (Face Value Rs. 200 lacs) Current Assets 2,460

6,660 6,660

On 1 April, 2015 the company announced the buy-back of 25% of its equity shares @ 15 per share.
For this purpose, it sold all of its investments for Rs. 150 Lakhs and issued 2,00,000,14%
preferences shares of Rs. 100 each at par, the entire amount being payable with application.
The issue was fully subscribed. The company achieved the target of buyback. Later the company
issued one fully paid-up equity share of Rs. 10 by way of bonus shares for every four equity shares
held by the equity shareholders.
Required: Show journal entries for all transactions including cash transactions. (7 Marks)

Q3. The following figures have been extracted from the books of M Limited for the year ended on
31.03.2019. You are required to prepare a Cash Flow Statement. (7 Marks)
(a) Net profit, before adjusting income tax but after taking into account the following items, was Rs.
10 lakhs.
▪ Depreciation on Assets Rs. 2,50,000.
▪ Discount on issue of Debentures written off Rs. 15,000.
▪ Interest on Debentures paid Rs. 1,75,000.
▪ Book value of investment Rs. 1,50,000 (Sold for Rs. 1,60,000).
▪ Interest received on investments Rs. 30,000.
(b) Income tax paid during the year Rs. 4,80,000.
(c) 7,500 10% preference shares of Rs. 100 each were redeemed on 31.03.2019 at a premium of
5%. Further the company issued 25,000 equity shares of Rs. 10 each at a premium of 20% on
02.04.2018. Dividend on preference shares were paid at the time of redemption.
(d) Dividends paid for the year 2017-18 Rs. 2,50,000 and interim dividend paid Rs. 1,50,000 for the
year 2018-19.
(e) Land was purchased on 02.04.2018 for Rs. 1,20,000 for which the company issued 10,000
equity shares of Rs. 10 each at a premium of 20% to the land owner as consideration.
(f) Current assets and liabilities were as follows:

Particulars 31.03.2018 31.03.2019

Stock 6,00,000 6,59,000

Sundry Debtors 1,04,000 1,06,550

Cash in hand 98,150 17,650

Bills Receivables 25,000 20,000

Bills Payable 22,500 20,000

Sundry Creditors 83,000 85,650

Outstanding expenses 37,500 40,900

Q4. The following balances were shown in Balance Sheet of Anukula Limited as at 31 March, 2015:
Rs.

8,00,000 Equity Shares of Rs. 10 each fully paid up 80,00,000

50,000 8% Preference Shares of Rs. 100 each Rs. 80 paid up 40,00,000

Capital Reserve 35,00,000

General Reserve 80,00,000

Securities Premium 70,00,000

Profit & Loss Account 52,00,000

12% Debentures 10,00,000

Non-Current Investment at cost 65,00,000

Cash and Bank 92,00,000

Additional Information:
(a) The company passed a resolution to buy-back 20% of its equity capital @ Rs. 35 per share. For
this purpose, it sold its investments of Rs. 30 lakhs for Rs. 28 lakhs.
(b) The company redeemed the preference shares at a premium of 25%.
(c) Included in its investments were ‘Investments in own debentures’ costing Rs. 10 lakhs (face value
Rs. 11.50 lakhs). These debentures were cancelled.
You are required to pass necessary journal entries in the books of the company for above. (7 Marks)
Q5. B Ltd. supplied the following information:
▪ Net Profit for 2022-23 = Rs. 15,00,000
▪ Net Profit for 2023-24 = Rs. 22,50,000
▪ No. of shares prior to right issue = 10,00,000
▪ Terms of right issue: 1 new share for every 4 shares held; right issue price = Rs. 30
▪ Fair value of 1 ordinary share immediately prior to exercise of right = Rs. 36
Calculate basic EPS for 2022-23 and 2023-24 and restated EPS for 2022-23. (7 Marks)

Q6. Prepare the fire Insurance Revenue Account of Agni Fire Insurance Ltd. as per IRDA regulations
for the year ended 31 March, 2019 from the following details:

Particulars Amount

Claims paid 6,00,000

Legal Expenses regarding claims 10,000

Premiums received 12,50,000

Re-insurance premium paid 50,000

Commission 3,00,000

Expenses of Management 2,00,000

Provision against unexpired risk as on 1st April 2018 5,75,000

Claims unpaid on 1S1 April, 2018 50,000

Claims unpaid on 31st March, 2019 80,000

Provide for unexpired risk @ 50% less reinsurance.
Solve Any 1 of the following questions

Q7. From the following particulars furnished by N M Ltd., prepare the Balance Sheet as on 31 March,
2023 as required by Part I, Schedule III of the Companies Act, 2013: (14 Marks)

Particulars Debit Credit

Equity Share Capital (Face value of Rs. 100 each) 50,00,000

Building 27,50,000

Plant & Machinery 26,25,000

Furniture 2,50,000

General Reserve 10,50,000

Loan from State Financial Corporation 2,55,000 7,50,000

Inventory:

Raw Materials

Finished Goods 10,00,000 12,55,000

Provision for Taxation 6,40,000

Trade Receivables 10,00,000

Short Term Advances 2,13,500

Profit & Loss Account 4,33,500

Cash in Hand 1,50,000

Cash at Bank 12,35,000

Unsecured Loan 6,05,000

Trade payables (for Goods and Expenses) 10,00,000

Total 94,78,500 94,78,500

The following additional information is also provided:

(a) 10,000 Equity shares were issued for consideration other than cash.
(b) Trade receivables of Rs. 2,60,000 are due for more than 6 months.
(c) The cost of the assets were:
Building Rs. 30,00,000, Plant & Machinery Rs. 35,00,000 and Furniture Rs. 3,12,500
(d) The Balance of Rs. 7,50,000 in the Loan Account with State Finance Corporation is secured by
hypothecation of Plant & Machinery.
(e) Balance of Bank includes Rs. 10,000 with Galaxy Bank Ltd. which is not a Scheduled Bank.
(f) Transfer Rs. 20,000 to general reserve as proposed by Board of Directors.

Q8. PQR Ltd. was registered with a nominal capital of Rs. 5,00,000 divided into shares of Rs. 100
each. The following Trial Balance is extracted from the books on 31 March, 2023: (14 Marks)

Particulars Amount Particulars Amount

Buildings 2,90,000 Sales 5,20,000

Machinery 1,00,000 Outstanding Expenses 2,000

Opening Stock 10,000 Provision for Doubtful Debts (1.4.2022) 3,000

Loose Tools 23,000 Equity Share Capital 2,00,000

Purchases 2,90,000 General Reserve 40,000

Salaries 60,000 Profit and Loss A/c (01.04.2022) 25,000

Directors’ Fees 10,000 Creditors 92,000

Rent 26,000 Provision for depreciation

Depreciation 20,000 On Building 50,000

Bad Debts 6,000 On Machinery 55,000

Investment 1,20,000 14% Debentures 2,00,000

Interest accrued on 2,000 Interest on Debentures accrued but not 14,000

investment due

Debenture Interest 28,000 Dividend Received 12,000

Advance Tax 60,000 Unclaimed dividend 5,000

Sundry expenses 18,000

Debtors 1,25,000

Bank 30,000

12,18,000 12,18,000

You are required to prepare Statement of Profit and Loss for the year ending 31 March, 2023 and
Balance Sheet as at that date after taking into consideration the following information:
(1) Closing stock is more than opening stock by Rs. 90,000.
(2) Provide for doubtful debts @ 4% on Debtors.
(3) Make a provision for income tax @ 30%.
(4) Depreciation expense included depreciation of Rs. 8,000 on Building and that of Rs. 12,000 on
Machinery.
(5) The Directors proposed a dividend @ 25% and transfer to General Reserve Rs. 10,000.
(6) Notes to Accounts should form part of your answer.