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Expert analysis of CA Inter (New) examination May/June 2019

Guest 
on 20 June 2019

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Accounting (CA Inter - New Course)

CA Inter Accounts (New Syllabus) - Paper Analysis by CA Nitin Goel

Being the first exam, Accounts has a relevance of its own. The nervousness of the first examination is always the highest. Also, performance in the first examination generally sets the tone for the rest of the group.

CA Inter Accounts (New Course) Examination this time was a 16 page Question Paper so needless to say a lengthy one, however the level of the examination was not very difficult. Can be refered to as of moderate difficulty. My general analysis of the examination is as follows:

1. Many questions were asked from Accounting Standards.

2. The exam was on the expected lines and nothing as such should have surprised the students.

3. Examination being a lengthy one, students were supposed to maintain good speed throughout without compromising on the working notes part.

4. No major new points were asked in the paper. All the questions were covered in the classes thoroughly.

Going question by question, following can be analyzed about the exam :

Q1 - Compulsory for 20 marks covering 4 subparts of 5 Marks each. It was entirely from AS as per the general trend.

a) From AS 16 with the Point of Importance being the interest to be capitalized, it covered the aspect of general & specific loan.
b) From AS 13 on reclassification of investments.
c) Covered 5 different Standards asking for True/False along with reasons. Students were not supposed to write details, only an explanation restricted to a couple of lines only.
d) From AS 4 again covering various different cases.

The next 5 questions were of 20 marks each as well, out of which any 4 were to be attempted.

Q2 - Both the parts of these questions were quite easy

a) From Hire Purchase chapter related to the concept of Partial Repossession.
b) From Insurance Claims related to Loss of Profit Policy.

Q3 - Again had 2 sub-parts

a) From Single Entry requiring preparation of Final Accounts. Detailed working notes were expected from students in this part.
b) From Branch Accounts and was related to Foreign Operations.

Q4 - No Sub Parts - From Advanced Partnership covering concepts of Admission & Conversion of firm into Company.

Q5 - Had 2 sub parts

a) From Redemption of Preference Shares requiring Journal entries and Balance sheet.
b) From Cash Flow Statements

Q6 - It had an internal choice as well wherein out of 5 sub parts, any 4 were to be attempted.

a) A theoretical question from AS 22
b)From Basic concepts wherein Final Accounts were to be prepared assuming going concern is not valid so items were to be shown at NRV.
c) From Profit Prior to Incorporation - covering allocation of items, very basic and straight forward.
d) Theoretical question from Advanced Partnership relating to then on applicability of Garner vs Murray.
e) From AS 2 - point of emphasis being treatment of Abnormal loss.

All in all as I stated earlier, we cant say that this examination had anything surprising for the student in it, but It must have really tested students' ability to complete the examination in time. Such an examination can be conquered with regular practice and practicing questions and past year papers with time boundations at the preparation stage.

To the students who appeared for the examination, I would only advice to let go however the examination went for them - good or bad and concentrate on the upcoming exams. It was just one exam out of the 4 or 8 you have to appear for. CA doesn't test you only on your preparation but tests your mental stability and strength to keep your calm in the time of extreme excitement or extreme disappointment. On that note - Best of Luck for the results and may you fair well !!

Click here to download CA IPCC Accounting Question Paper New Course May 2019
To enroll Accounting (CA Inter) subject of the author: Click here

Corporate & Other Laws (CA Inter - New Course)

Solved Paper of Corporate & Other Laws (CA Inter) May 19 by CS Tejpal Sheth

Q-1(a) As at 31st March, 2018, the paid-up share capital of S Ltd. is Rs. 1,00,000 divided into 10,00,000 equity shares of Rs. 10 each. Of this, H Ltd. is holding 6,00,000 equity shares and 4,00,000 equity shares are held by others. Simultaneously, S Ltd. is holding 5% equity shares of H Ltd. out of which 1% shares are held as legal representative of deceased member of H Ltd. on the basis of the given information, examine and answer the following queries with reference to the provisions of the Companies Act, 2013:

I. Can S Ltd. make further investment in equity shares of H Ltd. during 2018-19?
II. Can S Ltd. exercise voting rights at Annual General Meeting of H Ltd.?
III. Can H Ltd. allot or transfer some of its shares to S Ltd.?

Answer

In the given case, it can be understood that H Ltd. is holding company of S Ltd. Section 19 of Companies Act, 2013 contain provisions for holding of shares by subsidiary company into holding company.

I. Subsidiary company cannot purchase further shares into holding company or holding company cannot allot further shares to its subsidiary company after establishment of relation of holding and subsidiary. Hence, S Ltd. cannot make investment in equity shares of H Ltd. during 2018-19.

II. Subsidiary company has right to vote at meeting of holding company only in respect of shares held by it as legal representative or as a trustee. Here, S Ltd. is holding 1% shares as legal representative of deceased member of H Ltd. For those shares (i.e., 1%) it has voting right.

III. Holding company cannot transfer or allot shares. If it allots shares, allotment will be void.

Q-1(b) (i) Modern Jewellery Ltd. decides to pay 5% of the issue price gap of shares as underwriting commission to the underwriters, but the Articles of the company authorise only 4% underwriting commission on shares. Examine the validity of the above decision under the provisions of the Companies Act, 2013.

Answer

Please refer answer to question no. 1 from past examination question of Chapter no. 4A - Share Capital (Allotment of Shares, Capital & Alteration of Capital)

Q-1(b) (ii) PQ Ltd. declared and paid 10% divided to all its shareholders except Mr. Kumar, Holding 500 equity shares, who instructed the company to deposit the divided amount directly in his bank account. The company accordingly remitted the dividend, but the bank returned the payment on the ground that the account number as given by Mr. Kumar doesn't tally with the records of the bank. The company, however, did not inform Mr. Kumar about this discrepancy. Comment on this issue with reference to the provisions of the Companies Act, 2013 regarding failure to distribute dividend.

Answer

Please refer answer to question no. 13 from past examination question of Chapter no. 8 - Declaration of Dividend.

Q-1(c) The Government of India is holding 51% of the paid-up equity share capital of Sun Ltd. The Audited financial statements of Sun Ltd. for the financial year2017-2018 were placed at its annual general meeting held on 31st August, 2018. However, pending the comments of the Comptroller and Auditor General of India (CAG) on the said accounts the meeting was adjourned without adoption of the accounts. On receipt of CAG comments on the accounts, the adjourned annual general meeting was held on 15th October, 2018 whereat the accounts were adopted. Thereafter, Sun Ltd. filed its financial statements relevant to the financial year 2017-18 with the Registrar of Companies on 12th November, 2018. Examine with reference to the applicable provisions of the Companies Act, 2013,  whether Sun Ltd. has complied with statutory requirement regarding filing of accounts with the Registrar?

Answer

  • As per section 137, if Annual General Meeting is not held, the financial statement along with documents duly signed along with statement of facts and reason for not holding the Annual General Meeting should be filed within 30 days from the latest date on or before which that meeting should have been held. If not filed within 30 days, filing may be done within 30 days with additional filing fees.
  • Every company shall convey Annual General Meeting within period of 6 months from end of financial year. Adjourned meeting should be held within stipulated time limit of 6 months (i.e. on or before 30th September, 2018).
  • If financial statements are placed before Annual General Meeting but not adopted at Annual General Meeting, it should be filed with all specified documents with Registrar within 30 days of Annual General Meeting.
  • Registrar should take note of unadopted financial statements on records as provisional until the financial statements are filed with him after their adoption in adjourned Annual General Meeting. If Annual General Meeting is held on 15 October 2018, the financial statements along with attachments specified for financial year of 2018 should be filed with the Registrar of Companies by 13th November 2018. In the given case it has been filed by company on 12th November, 2018. Company has not complied with provisions regarding filing of annual financial statements.

To read the full article: Click here

To enroll Corporate and Other Laws (CA Inter)  subject of the author: Click here
To view / download Corporate & Other Laws (CA Inter) Question Paper - May'19: Click Here

Taxation (CA Inter - New Course)

Taxation (CA Inter) Paper Evaluation by CA Ashish B. Deolasi



Stay tuned to check the analysis of the other subjects


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