Suggested answers (unofficial) nov11 paper5

Ans 1 (a) Amount to be capitalized = Rs. 4,80,000

Amount to be charged to P and L A/c= 7,20,000

(b) Dont know

(c) Amount to be transfered to capital reserve = 60,000

(d) 1 Head office exp to Head ofice A/c

2 Deprectiatio Dr to head ofice a.c

3 Head Office to salaries

4 Head Office to Debtor

Ans 2 Realisation loss = Rs. 1,00,300

In applying Garnar murray P and Q will be liable to contribute deficiency. S having debit balance wil not bring anything

Entry for garner murray

P Dr 12,636

Q Dr 8,424

To R 21,060

Ans 3 I left it in choice

Ans 4 Capital bse = Rs. 4,77,80,000 Reasonable Return = 62,09,600

Ans 5 a Opening stock reserve = 59850 Closing stock reserve = 80,640 GP rate of current year = 16% Final Profit = 27,73,710

b rebate = 37591 current year income = 6,33,819

Ans 6 a P NIL Q 4500 R 4320 S 3188 T 2000

ans 6 b Premium = 16,72,800 claim 12,00,000 tax may be deducted here or may be deducted in p and l ( i gave note and transfered to p and l) Profit = 115050

Ans 7 a Whole 8 lacs can be written off provided that the accounts are not approved till may 2011 ( AS 4)

c Employees Compensation Expenses to be charged to P and l = Rs. 4,32,000

d theory

e Reliability, relevence, etc