Friday, March 16, 2012

Accounting Quiz - 3 (Management Accounting)

1. The cost price of a machine is Rs.1,20,000 and the depreciated value of the machine after 3 years will be Rs.66,000. If the company charges depreciation under straight line method, the rate of depreciation will be

2. Taurus Ltd., a dealer in cosmetics, has the practice of selling goods only on credit. Consider the following balances pertaining to the company as on April 01, 2011:
Sundry debtors - Rs.10,000
Provision for doubtful debts - Rs. 400
and the following additional data of the company for the year 2010-2011:
Particulars Rs.
Sales for the year 2010-2011 1,00,000
Sales returns for the year 2010-2011 1,000
Collection from sundry debtors during the year 2010-2011 90,000
Bad debts written off during the year 2010-2011 500
Discount allowed during the year 2010-2011 400
At the end of the financial year 2010-2011, the provision for doubtful debts is required to be 5% of sundry debtors, after making a specific provision for a debt of Rs.200 from a customer who was declared bankrupt. The amount debited to profit and loss account by way of provision for bad and doubtful debts for the year ended March 31, 2011 was

3. Based on which of the following concepts, is share capital account shown on the liability side of Balance sheet?
[A]Business entity concept
[B]Money measurement concept
[C]Cost concept
[D]Going concern concept

4. The post-tax profits of Hima Ltd. for the past four years are:
Year Rs.
2007-2008 1,50,000
2008-2009 1,65,000
2009-2010 2,20,000
2010-2011 2,50,000
Additional information:
• The profits for the year 2002-2003 are calculated by taking an excess depreciation of Rs.10,000.
• During the year 2001-2002, there was a loss of Rs.20,000 due to a fire accident.
• In view of the diversification of business and resultant workload, it is expected to appoint two additional employees for a salary of Rs.10,000 each per annum.
If the tax rate is 50%, the future maintainable post-tax profit is

5. The profits of Kavya Ltd. for the past 5 years are as under:

6. Super Ltd. issued 500 Debentures of Rs.100 each at a discount of 10% . Holders of these debentures have an option to convert their holdings to equity shares of Rs.100 each at a premium of Rs.20 at any time within 5 years. The total number of equity shares to be issued, if all the debenture holders opt for the conversion, is

7. The profits for the past 5 years of Suhas Ltd. are as under:
Year Profit (Rs.)
1999-2000 42,364
2000-2001 43,456
2001-2002 53,126
2002-2003 56,789
2003-2004 62,354
The weighted average profit of the company is

8. Goodwill Limited issued prospectus inviting applications for 1,00,000 equity shares of Rs.10 each payable as under:
• On application Rs.5 (including premium of Rs.2)
• On allotment Rs.4
• On first & final call Balance Amount
Applications were received for 1,30,000 shares. Application money received on 10,000 shares was refunded and allotment was made on pro rata basis for the remaining. Mr.Lazy to whom 1,400 shares were allotted failed to pay the allotment money and his shares were forfeited later when he failed to pay the call money. The shares were reissued to Mr. Active at the rate of Rs.8 as fully paid up. The amount outstanding to the credit of Share Premium account is

9. Sonic Ltd. issued 10,000 equity shares of Rs.10 each at a premium of 20%. The share amount was payable as:
On application Rs.2
On allotment (including premium) Rs.5
On first call Rs.3
On second and final call Rs.2
Applications were received for 14,000 shares and the shares were allotted to the applicants pro-rata. Vikas, who was allotted 300 shares, failed to pay the first call. On his subsequent failure to pay the second and final call, all his shares were forfeited. Out of the forfeited shares, 200 shares were re-issued @ Rs.9 per share as fully paid. The amount transferred to capital reserve is

10. Krishi Ltd. issued 1,50,000 shares of Rs.100 each at a discount of 10%. Ramya, to whom 300 shares were allotted, failed to pay the final call of Rs.30 per share and hence, all her shares were forfeited. At the time of forfeiture, the amount transferred to share forfeiture account was

11. A company cannot issue redeemable preference shares for a period exceeding
[A]6 years
[B]7 years
[C]8 years
[D]20 years

12. OK Company issued 1000 shares of Rs.10 each at a premium of Rs.2 payable as follows :
On application - Rs.6 (including premium)
On allotment - Rs.3
On first and final call - Rs.3
Mr. Jahar, a shareholder to whom 60 shares were allotted failed to pay the first and final call. His shares were forfeited. 60% of the forfeited shares were reissued to Mr.Ali as fully paid for Rs.11 per share. The credit balance in the share forfeiture account after the reissue of forfeited shares is

13. Consider the following data pertaining to Cute Limited :
i. Share capital:
50,000 equity shares of Rs.10 each fully paid-up.
2,000, 8% preference shares of Rs.100 each fully paid-up.
ii. Reserves and surplus Rs.30,000.
iii. The average expected profit after taxation is Rs.52,000.
iv. Sundry creditors Rs.60,000.
v. 10% of the profit after tax is transferred to reserves.
vi. The normal profit earned on the market value of equity shares (fully paid) of the similar type of business is 12%.
vii. Other external liabilities are Rs.1,20,000.
viii. Preliminary expenses Rs.10,000.
The intrinsic value per equity share is

14. Growth Ltd. is planning to raise funds by making rights issue of equity shares to finance its expansion. The existing equity share capital of the company is Rs.50,00,000 of Rs.10 each. The value of its share is Rs.The company offers its shareholders the right to buy 2 shares at Rs.11 each for every 5 shares held by them.
The share capital outstanding after the issue of right shares is

15. Ramesh was allotted 300 shares of Rs.10 each. The following payments were made by Ramesh:
Rs.2 per share on application
Rs.3 per share on allotment
He failed to pay the first call of Rs.2 and final call of RsThe company forfeited the shares after due notice. The shares were later reissued to Naik @ Rs.9 each fully paid. On forfeiture, the amount credited to the share forfeiture account and on reissue the amount transferred to capital reserve account respectively, are
[A]Rs.3,000 ; Rs.300
[B]Rs.3,000 ; Rs.2,700
[C]Rs.1,500 ; Rs.300
[D]Rs.1,500 ; Rs.1,200

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