Tribhuvan University
Bachelor of Business Studies
Year 4 · TU Board 2080
Course Title: Advanced Financial Accounting
Full Marks: 100Pass Marks: 35Time: 3 hrs
- 1.2
Define business concept of accounting.
- 2.2
What is Nepal Public Sectors Accounting Standards (NPSAS)?
- 3.2
What do you mean by GAAP?
- 4.2
What is goodwill?
- 5.2
Explain in brief about social accounting.
- 6.2
The net profit after tax of a company for the last five years were Rs.60,000, Rs.65,000, Rs.70,000, Rs.60,000 and Rs.65,000. The capital employed of the business was Rs.600,000 on which 12% rate of return is expected. The valuation of goodwill should be based on three years purchase of the annual super profit. Required: Value of goodwill under super profit method
- 7.2
A company has 25,000 equity shares of Rs.100 each, Rs.90 paid up. The profit before tax is Rs.250,000. The company has a practice of transferring 30% of profit to general reserve every year. The normal rate of return is 12% and tax rate is 25%. Required: Value of equity share using earning capacity method
- 8.2
The following information has been given for January 1st 2022 Monetary Assets Rs.400,000 Monetary Liabilities Rs.300,000 Retail Price Index: As on January 1st 2022 100 As on December 31st 2022 120 Required: Net monetary gain or loss
- 9.2
ABC Company has share capital of Rs.1,000,000 of Rs.100 each and capital reserve of Rs.400,000. The management of a company decides to utilize part of its capital reserve to make a bonus issue on one share for every four shares held by the company. Required: a. Amount of bonus b. Capital reserve after bonus
- 10.2
Wages and salaries of the employees is Rs.300,000 each year. Discount rate and efficiency ratio are 12% and 1.3 respectively. Required: Present Value of human resource for five years.
Group "B" Short Answer Questions [5×10=50] Attempt any FIVE questions.
- 11.10
The following Balance Sheets are presented: Balance Sheet as on 31st March, 2023
Liabilities H. Co. S. Co. Assets H. Co. S. Co. Equity Shares of Rs.100 each 600,000 300,000 Fixed Assets 300,000 350,000 General Reserve 100,000 30,000 Stock 90,000 80,000 Profit & Loss a/c 50,000 40,000 Debtors 60,000 50,000 10% Debenture - 120,000 10% Debenture in S. Co. acquired at par 96,000 - Creditors 40,000 30,000 Shares in S. Co. 2,400 shares 200,000 - Cash at bank 44,000 40,000 Total 790,000 520,000 Total 790,000 520,000 H. Co. acquired the shares on 1st August, 2022. The general reserve and profit and loss a/c of S. Co. showed a credit balance of Rs.12,000 and 25,000 respectively on 1st August, 2022. Required: Necessary working notes and consolidated balance sheet as on 31st March, 2023 [4+6]
- 12.10
The Balance Sheet of a company is as follows:
Liabilities Rs. Assets Rs. Equity Share Capital of Rs.100 each 400,000 Land & Building 300,000 10% Preference Share Capital of Rs.100 each 120,000 Plant & Machinery 400,000 12% Debenture 200,000 Inventory 80,000 Account Payable 168,000 Account Receivable 60,000 Preference Dividend (due) 12,000 Cash 20,000 P/L account 40,000 900,000 900,000 The Company went into voluntary liquidation. The assets except cash realized Rs.650,000 including Rs.300,000 on sale of plant and machinery, which was mortgaged against 12% debenture. The liquidator was entitled to a remuneration of 5% on value of assets realized and 2% on amount paid to equity shareholders. The cost of liquidation was Rs.15,000.
Required: Liquidator's final statement of account (10)
- 13.10
a. MM Company with issued capital of Rs.500,000 @ Rs.100 each provided you the following information:
Particulars Rs. Fixed Assets 500,000 Current Assets 250,000 Goodwill 50,000 Current Liabilities 160,000 10% Debenture 120,000 Net profit for the year was Rs.50,000 out of which 25% was transferred to reserve. Normal rate of return was 12%.
Required: Value of each equity shares under i) Net assets method ii) Yield method (2.5+2.5)
b. Differentiate between profit and non-profit organization. (5)
- 14.10
a. The following is the Receipts and Payments account of KK Sports for the current year ended
Receipts Rs. Payments Rs. To balance b/d 8,000 By Rent 6,000 To Subscription 11,000 By Salaries 8,000 To Tournament fund 5,000 By Office expenses 2,000 To Life membership fund 4,000 By Sports equipment 5,000 To Entrance fees 3,000 By General expenses 1,000 To Donation for building 1,000 By balance c/d 10,000 Total 32,000 Total 32,000 Additional information: Subscription outstanding for current year end was Rs.4,000 and previous year end was Rs.3,000. Sports equipments was valued Rs.2,000 on previous year end and Rs.3,000 on current year end. Outstanding office expenses for current year end was Rs.1,200
Required: Income and Expenditure account for current year end (5)
b. Define shares. Also, explain the factors affecting the valuation of shares. (1+4)
- 15.10
"Forensic accounting provides an accounting analysis that is suitable to the court which will form the basis for discussion, debate, and ultimately dispute resolution." Comment. (10)
- 16.10
"Environment accounting is a vital tool to assist in the management of environmental and operational costs of natural resources." Discuss. (10)
- 17.15
The GG Company Ltd. sells its business to the DD Company Ltd. on December, 2022, on which date its Balance Sheet was as under:
Liabilities Rs. Assets Rs. Equity Shares of Rs.100 each 600,000 Land and Building 500,000 General reserve 100,000 Plant and Machinery 300,000 12% Debenture 200,000 Goodwill 60,000 Creditors 80,000 Stock 40,000 Profit and Loss a/c 70,000 Debtors 60,000 Cash at bank 90,000 Total 1,050,000 Total 1,050,000 The DD Company Ltd. agreed to take over the assets (exclusive of cash at bank and goodwill) at 15% less than the book value to pay Rs.70,000 for goodwill and to take over the debentures. The purchase consideration was to be discharged by the allotment to the GG Company Ltd. of Rs.3,000 shares of Rs.100 each at a premium of Rs.10 per share and the balance in cash. The cost of liquidation amounted to Rs.15,000.
Required: a. Purchase consideration b. Journal entries in books of GG Company Ltd. c. Realization account d. Journal entries in the books of DD Company Ltd. [2+7+2+4]
- 18.15
The following Balance Sheet and Profit and Loss account for the month of January are:
Balance Sheet
Liabilities Opening Closing Assets Opening Closing Share capital 8,000 8,000 Fixed Assets 8,000 6,800 Net Profit 800 2,600 Stock 3,500 4,200 Loan 6,000 6,000 Debtors 2,300 3,000 Cash 1,000 2,600 14,800 16,600 14,800 16,600 Profit and Loss account
Sales 6,000 Less: Cost of Sales Opening Stock 3,000 Purchase 4,000 Closing Stock (4,000) 3,000 Gross Profit 3,000 Less: Depreciation 1,200 Net Profit for the month 1,800 Add: Opening Net Profit 800 Closing Net Profit 2,600 Fixed assets costing Rs.8,000 were acquired when price index was 100. Price index in respect of them went up to 150 at the end of the month. Straight Line Method of Depreciation is used for 48 months to write off fixed assets with zero salvage value. The cost of stock at the beginning of the month was Rs.10 per unit and price index at that time was 100. During the month the cost of purchase increased by 10%. RPI in the beginning of the month was 100 RPI at the end of the month was 120 Average RPI of the month was 110
Required: i. Adjustments details ii. Amount credited to CCA reserve iii. Profit and Loss account under CCA iv. Balance Sheet under CCA [6+3+3+3]
- 19.14
a. What is accounting standard? Why is it needed? b. "Human resource accounting tracks and manages employees' costs and values, including performance, compensation, benefits, and training." Discuss. [7]
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