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IPCC_Group 2_Test_2
ADVANCED ACCOUNTING
TOPIC: AS-4, AS-5 and Insurance Companies
| TIME: 1.5 hrs | Marks: 50 |
Accounting Standards 30 marks
Question No.1
A major fire has damaged the assets in Sree Lakshmi Industries Ltd. on 14th June 2016 after a period of 2-1/2 months of the year-end closure of accounts. The loss is estimated at ₹ 16 crores out of which ₹ 12 crores will be recoverable from the insurance company. Explain briefly how the loss should be treated in the final accounts for the year ended 31-03-2016.
Question No.2
Board of Directors approved the financial statements for the year ended 31-03-2017 on 31st July 2017. They recommended a dividend of 15% in the meeting to be paid to the shareholders after it is approved at the Annual General Meeting. State how would you deal with the situation.
Question No.3
A company entered into an agreement to sell its immovable property included in the Balance Sheet at ₹ 5 lakhs to another company for ₹ 20 lakhs. The agreement to sell was concluded on 31-01-2017 and the sale deed was registered on 30-04-2017. How will this be treated in Balance Sheet as on 31-03-2017.
Question No. 4
A company has to pay delayed cotton clearing charges over and above the negotiated price for taking delayed delivery of cotton from Supplier’s Godown. Upto 2016-17, the company has regularly included such charges in the valuation of closing stock. This being in the nature of interest the company has decided to exclude it from closing stock valuation from the year 2017-18. This would result into decrease in profit by ₹ 7.60 lakhs. Comment.
Question No.5
A company signed an agreement with Employees’ Union on 01-09-2017 for revision of wages with retrospective effect from 30-09-2016. This would cost the company an additional liability of ₹5 lakhs per annum. Is a disclosure necessary for the amount paid in 2017-18?
Question No.6
A claim was lodged with a transport company for loss of goods of ₹3 lakhs during 2016-17, the payment of which was received in 2017-18. No entry had been passed in accounts when claim was lodged. Comment.
Question No.7 8 Marks
Write Short Notes on:
- Unexpired Risks Reserves
- Re-insurance
Question No.8
From the following information of XYZ Marine Insurance Ltd. for the year ending 31st March, 2014, find out the,
- Net Premium earned
- Net Claims Incurred
| Particulars | Direct Business ₹ | Re-insurance ₹ |
| Premium Received | 92,00,000 | 7,86,000 |
| Premium Receivable as on 01.04.2013 | 4,59,000 | 37,000 |
| Premium Receivable as on 31.03.2014 | 3,94,000 | 33,000 |
| Premium Paid | 6,36,000 | |
| Premium Payable as on 01.04.2013 | 28,000 | |
| Premium payable as on 31.03.2014 | 20,000 | |
| Claims Paid | 73,00,000 | 5,80,000 |
| Claims payable as on 01.04.2013 | 94,000 | 16,000 |
| Claims payable as on 31.03.2014 | 1,01,000 | 12,000 |
| Claims received | 2,10,000 | |
| Claims receivable as on 01.04.2013 | 42,000 | |
| Claims receivable as on 31.03.2014 | 39,000 |
12 marks
All the best😊