FINANCIAL ACCOUNTING T.Y.BAF D.C.

CHAPTER.3. PERSONAL INVESTMENT ACCOUNTING

Q. 1:- Mr. Amit furnishes the following details relating to his holding 12 % government bond
Opening balance on 1.1.2007 Face value Rs. 100000; Cost Rs. 95000.
1.3.2007 100 units purchase Ex int at Rs. 98
1.7.2007 sold 200 units Ex – int out of the original holding at Rs. 100.
1.10.2007 Purchase 50 units at Rs. 98
1.11.2007 sold 202 units Ex – int at Rs. 99 out of original holding.
Interest dates are 30th September & 31st March every year.
Show investment account as it would appear in the books for the calendar year 2007

Q. 2:- Mr. Tushar Holds as on 1.4.2007 Rs. 120000/-(cost Rs. 117600) 6% Gold bond as investment on which
interest is payable half yearly on 1st January & 1st July.
The following transaction took place during the accounting year ended 31.3.2008.
Purchases: i) On 1.8.2007 F.V Rs 24000/- at Rs. 102 Cum. int
ii) On 1.12.2007 F.V Rs. 48000/- at 105 Ex – Int
Sales :- i) On 1.11.2007 F.V Rs. 12000/- at 104 Cum. Int
ii) On 1.2.2008 F.V Rs. 36000/- at 102 Ex Int
Write up Investment Account as on 31.3.2008.

Q. 3:- Mr. Roman of Jodhpur holds 400 12% Debenture of Rs. 100 each in Bajaj Ltd. as on 1.4.2007
at a cost of Rs.50000. Interest is Payable on 30th June & 31st December every year
On 1.6.2007, 200 Debenture are purchase cum int at Rs 21,400.
On 1.11.2007, 300 Debenture are sold ex int at Rs 28.650
On 30.11.2007, 200 Debenture are purchase Ex. int at Rs 19,200
On 31.12.2007, 300 Debenture are sold cum int at Rs 32,250
The Debenture was quoted at par on 31.3.2008.
Prepare investment account.

Q. 4:- Mr. Mohan Of M. P. holds 600 12% Debenture of Rs. 100 each in Bajaj Ltd.as on 1.4.2007 at a
cost of Rs.65000. Interest is Payable on 30th June & 31st December every year
On 1.6.2007, 200 Debenture are purchase cum int at Rs 20,400.
On 1.11.2007, 350 Debenture are sold ex int at Rs 33650
On 30.11.2007, 300 Debenture are purchase Ex. int at Rs 28700
On 31.12.2007, 300 Debenture are sold cum int at Rs 32,250
The Debenture was quoted at par on 31.3.2008.
Prepare investment account As per FIFO Method.

Q. 5:- Mr. Paresh Purchased Rs. 40,000, 5% Gujarat Debenture stock on 1st May 2002, at 90 cum-int.
Stamp duty expenses amounted to Rs 20 and brokerage at 2% was charged on cost.
Interest being payable on 30th June & 31st December every year.
Interest for half year was received on due date. On 1st December, Rs 10,000 of the stock was sold at 92 ex
int less 2% brokerage. On 31st December Rs 8000 Stock was purchase at 91 ex – int plus brokerage at 2 %
and charges of Rs. 10. On 1st March Rs 6000 stock was sold at 94 cum int less 2 % Brokerage. The
market price on 31.3.2003 is 91%. Show the investment account for the year ended 31.3.2003.

Q. 6:- Mr. Investor furnishes the following information relating to the investment in 16 % Debenture
(Rs 100 Each) of Tata Ltd. held as current asset.
2007:- 1.1:- opening balance – F V Rs. 60,000; Cost Rs. 59,000.
1.3:- 100 Debenture purchase Ex int at 98.
1.7.:- Sold 200 Deb ex int at Rs 100.
1.10.:- Purchase 50 Debenture at Rs. 98 cum – int
1.11.:- Sold 200 Debenture ex – int at Rs. 99
Interest dates are 30.9 & 31.3. Mr. Investor closes his book on 31st December every year. Brokerage of 1% is
to be paid for each transaction
Market value of 16 % debenture on 31.12.2007 is Rs 99/-. Show investment account.
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Q. 7:- Bangalore Investments hold 1200- 6% Debentures of Rs. 100 each in Minerva Ltd. as on 1st April 2004 at a
cost of Rs. 1,40,000. Interest is payable on 30th June and 31st December each year. Other details are s under:
Date Particulars
1-6-2004 : 400 Debentures are purchased cum-interest at Rs. 40,800
1-11-2004 : 400 Debentures are purchased ex-interest at Rs. 38,400
30-11-2004 : 600 Debentures are sold cum-interest for Rs. 64,500
31-12-2004 : 800 Debentures are sold ex-interest for Rs. 77,300
Prepare Investment Account valuing closing balance on 31-3-2005 at cost or market price whichever is lower.
The Debentures are quoted at par on 31-3-2005

Q. 8:- Mr. Rohit has 3,000 equity shares of Rs. 10 each costing Rs. 85,000 on 1.1.2003.
He purchases 2,000 equity shares for Rs. 75,000 on 1.3.2003.
On 31.3.2003 he received dividend at @ 60 % on all equity share hold on that date for the year ended on
31.3.2002.
On 1st May 2003 he sold 1,000 equity shares at Rs. 45,000/-.
1st June 2003 Company give right share one share for every two shares held for Rs. 20 per share.
On 1st September 2003 Company gave one bonus shares for every three shares held when market price of
equity shares is Rs. 55 /- per share.
On 1st October 2003 He sold 2500 equity shares for Rs. 60/- per share.
On 1st December 2003 he got interim divined at @ 40% existed on that date.
Prepare Investment Account. Market price on 31.12.2003 is Rs. 12 per share.

Q. 9:- Miss. Sunita has 5000 equity shares of Rs. 10 each costing Rs. 135000 on 1.4.2002.
She purchases 1500 equity shares for RS. 75,000 on 1st June 2002.
On 30.6.2002 She Received Divined at @ 40 % on all equity share hold on that date for the year ended on
31.12.2002.
On 1st August 2002 she sold 1500 equity shares at RS 65000/-.
1st October 2002 Company give right share one share for every two shares held For RS 20 per share, she
subscribed for 2/5 of rights received & balance rights sold For Rs. 10 per share.
On 1st December 2002 Company gave one-bonus shares for every Two shares held when market price of
equity shares is Rs. 48 /- per share.
On 1st February 2003 She sold 2500 equity shares for Rs. 40 per share.
On 1stMarch 2003 she got interim divined at @ 40% existed on that date.
Prepare Investment Account as Per FIFO method. Market price on 31.3.2003 is Rs. 42 per share.

Q. 10:- Miss Sushma Request you to prepare investment account for the year ended 31.3.2003 from the following
information.
On 1.4.2002 Op Bal F. V 4000, 9% Debentures Costing Rs 480000
On 1.5.2002 Purchase 3000, 9% Debentures at 97
On 1.7.2002 Sold 2000, Debentures at Rs. 101.
On 1. 9.2002 Sold 3000, Debenture at RS 105 cum int.
On 1.12.2002 Purchase 4000 Debenture at RS 99
Interest paid on 1st February & 1St August every year.
He paid 1 % Stamp duty on face value on purchases & 2 % brokerage

Q.11:- Bhavesh purchased on 1st May 2002 15 % convertible Debenture of Rs.100 each in XY Ltd. of
the face value of Rs.1,00,000 @ Rs.105 ex interest.
Interest on the debentures is payable each on 30th June and 31st Dec. Bhavesh closes his books of account
every year on 31st March. The following transactions were entered in to in the year ended 31 March 2003
in regard these debentures.
Aug 1, 2002 Purchase of Rs.60,000 Debenture @ Rs.109 cum- interest.
Aug 31, 2002 Sale of Rs.50,000 Debenture @ Rs.104 ex-interest.
Oct 31, 2002 Purchase of Rs.40, 000 Debenture @ Rs.102 ex- interest.
The market value of Debenture in XY Ltd on 31st march 2002 was Rs.103 cum – interest
Prepare the Debenture Investment Account in the books of Bhavesh on average cost basic.
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Q.12:- Mr. A invested his money in 12% RBI Bond for the year ended 31st March. 2005. Interest received 30th
June and 31st Dec. on every year. Brokerages 1% on all transaction on Ex.-int. price were as stamp
duty 0.5% on purchased on face value.
Date 1st April 2005 Face value 8, 00,000 costs 7, 90,000
1st May purchased 3000 bonds of Rs.100each
(a) Rs, 96. Ex-int (Because RBI is Govt. bond)
1st Sep sold 4000 bond (a) Rs.102 cum-int price.
1st Dec sold 1000 bond (a) Rs.96 ex.-int price.
1st Feb purchased 4000 bond (a) Rs.-96 cum int price.
Prepare personal A/c.

Q.13:- Mr. Pramod Furnish you the following information of his Investment In Bajaj Ltd.
1st Jan op. Bal 24,000 shares of Rs.-10, each Cost Rs. 5, 40,000.
1st March Purchases 3,000 share for Rs.36 per share.
1st May Company declared and paid 20% dividend for the year ended on 31st Dec.04.
1st June sold 5000 shares for Rs.50 per share.
1st August Company declared 1 bonus for every 5 share held when market price is Rs. 40 per share.
On 1st Sep Company issue right share in the ratio of 1 share per every 4 share held
Agreed price Rs.50 per share. He sold 1/3 of the rights for Rs.5 each.
1st Oct. sold 3000 shares for Rs.40 per share.
1st Dec Company Give 25% Interim Div. market price on 31st Dec. is Rs.27 per share.
Prepare personal Investment A/c.

Q14. On 1st January 2013, 1000-12% Debenture of Rs. 100 each of Shiva Ltd. were held as investment
by Mr. Dharmesh at a cost of Rs. 91,000. Interest is payable on 31st Dec.
On 1st April 2013, Rs. 20,000 of such debentures were purchased by Dharmesh @ Rs. 98 cum-
interest.
On 1st September 2013, Rs. 30,000 of such debentures were sold at Rs. ex-interest.
On 1st December 2013, Rs. 50,000 of such debentures were sold at Rs.99 cum-interest.
Interest is received on due date.
Prepare investment account for 12% debentures of Shiva Ltd. in the books of Mr. Dharmesh
valuing closing stock as on 31st December 2013 applying AS-13. The debentures were quoted at
Rs. 93 on 31st December 2013.

Q15. Mr Ram Nene held on 1-1-2013 Rs. 60,000 of 12% Government securities (Tax free) of Rs. 100
each of Rs. 56,500.
On 1-6-2013 he purchased a further of Rs. 40,000 of the security at Rs. 96.5 cum-interest,
brokerage being Rs.200.
On 31-7-2013 Rs. 50,000 of the security was sold at 94.5 ex-interest, brokerage being Rs.250.
On 1-12-2013 Rs. 20,000 of the security was again sold at Rs. 96 cum-interest.
Interest on the security was paid each year on 31st March and 30th September and was credited by
the bank on 3rd April and 4th October respectively. The price of the security on 31-12-2013, was
96. Mr. Nene closes his books on 31st December each year.
Draw up the Investment Account in the books of Mr. Nene.

Q18. On 1-4-2012 Mr. Krishna Murtiy purchased 1,000 equity shares of Rs. 100 each in Telco Ltd. @
Rs. 120 each from a Broker, who charged 2% brokerage. He incurred 50 paise per Rs.100 as cost
of shares transfer stamps. On 31-1-2013 Bonus was declared in the ratio of 1:2. Before and after
the record date of bonus shares, the shares were quoted at Rs. 175 per share and Rs. 90 per share
respectively.
On 31-3-2013 Mr. Krishna Murty sold bonus shares to a broker, who charged 2% brokerage.
Show the Investment Account in the books of Mr. Krishna Murty, who held the shares as Current
assets and closing value of investments shall be made at Cost or Market value whichever is lower.
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Q16. Miss Bhagawati entered into the following transactions of purchase and sales of 12% Debentures
of Rs.100 each of Mansi Ltd. Interest is payable on 30th June and 31st December every year.
Transactions are as under:
Date No. of Terms
Debentures
01-04-2005 800 Opening Balance at a cost of Rs. 76,000
01-06-2005 300 Sold at Rs.105 each cum-interest
01-09-2005 700 Purchased at Rs.98 each Ex-Interest
01-12-2005 400 Purchased at Rs. 108 each Cum-Interest
01-02-2006 900 Sold at Rs. 97 each Ex-Interest.
Prepare Investment Account of 12% Debentures in the books of Bhagawati for the year ended 31st
March, 2013. The market value on 31 March, 2013 was Rs. 67,500 of the said Investment. Apply
AS 13.

Q17. Mr. Mandar holds as on 1st, April, 2012 Rs. 75,000 (Cost price Rs. 78,000) 6% Government
securities as investment on which interest is payable half yearly on 30th June and 31st December
every year. The following transactions took place during the accounting year ended 31st
March,2013.
Purchases :
(i) On 1-5-2012 Face value Rs.30,000 @ 98 Cum-Interest
(ii) On 1-11-2012 Face value Rs. 45,000 @ 101 Ex-Interest
Sales :
(i) On 1-8-2012 Face value Rs. 36,000 @ 97 Cum-Interest.
(ii) On 1-2-2013 Face value Rs. 24,000 @ 102 Ex-Interest.
Market price of investment at 1% discount on 31st March, 2013.
Write up Investment Account closing it on 31st March, 2013 in the books of Mr. Mandar.
Investments are to be valued at cost or at market value whichever is less. (Apply AS 13)

Q19. During the year ended 31st March, 2013, A company had acquired shares of Telecom Ltd.
as follows:
Date or Acquisition No. of Shares Purchase Cost per Share Rs.
04-05-2012 500 55.00
25-08-2012 500 60.00
15-12-2012 1000 70.00
18-02-2013 750 75.00
On 15-03-2013 a Company sold 1000 shares at Rs.80 per share. Calculate profit or loss on sale
of share.

Q20. On 1-4-2012 Mr. Ajay had 30,000 equity shares in Vipro Ltd face value of the shares was Rs. 10
each but his purchase price was Rs. 14 per share. On 1-7-2012, Ajay purchased 6,000 additional equity
shares of the same company for a price of Rs. 16 per share. On 31-7-2012 the directors of the company
announced a bonus and rights issue. Bonus was declared at the rate of one equity shares for every six
shares held. Bonus shares were received on 5-8-2012.
Right issue was as per the following terms :
(1) Right shares to be issued to the existing holders on 17-8-2012.
(2) Right offered were at the rate of one share for every for three shares held at Rs. 15 per share.
Full amount was payable by 30-9-2012.
(3) Existing shareholders may to the extent of their entitlement, either wholly or in part, transfer
their rights to outsiders.

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(4) Ajay exercises his option and subscribed for 60% of his entitlement and the balance of rights,
he sold to Vikas for a consideration of Rs. 1.50 per share.
(5) Dividend for the year ended 31-3-2012 at the rate of 14% was declared by the company and
received by Ajay on 22-10-2012.
(6) On 1-11-2007 he sold 25,000 shares at Rs. 15 per shares.
Prepare Investment Account of Equity Shares in Vipro Ltd. for the year ended 31-3-2013 in the
books of Mr. Ajay. Apply AS-13.
The market price of an equity share was Rs. 14 as on 31-3-2013.

Q21. Mr. Arvind entered into following transactions of purchase and sale of Equity Shares of Aspi Ltd.
The shares have paid up value of Rs. 10 per share.
Date No. of Terms Date No. of Terms
Shares Shares
01-01-12 600 Buy @ Rs. 20 per share 25-07-12 2,500 Bonus Shares received
15-03-12 900 Buy @ Rs. 25 per share 20-12-12 1,500 Sale @ Rs. 22 per share
20-05-12 1,000 Buy @ Rs. 22 per share 01-02-13 1,000 Sale @ Rs. 24 per share
Additional Information :
(1) On 15th September 2012, dividend @ Rs.3 per share was received for the year ended 31st March
2012.
(2) On 12th November 2012, the company made a rights issue of equity shares in the ratio of one
share for five shares held on payment of Rs. 20 per share. He subscribed to 60% of the shares and
renounced the remaining shares on receipt of premium of Rs. 3 per share.
(3) Shares are to be valued on weighted average cost basis.
You are required to prepare Investment Account for the years ended 31-3-2012 and 31-3-2013.

Q22. On 1-4-2010 Aditya had 50,000 equity shares in T Ltd. The face value of the shares were Rs. 10 each but
their book value was Rs. 24 per share.
On 2-6-2010 Aditya purchased 10,000 equity shares in T Ltd. at a premium of Rs. 6 per share.
On 1-7-2010, the directors of T Ltd. issued bonus shares at the rate of one share for every three
shares held.
On 1-1-2011 Aditya purchased 5000 right shares in T Ltd. Of Rs. 10 each at Rs. 15 per share.
On 31-1-2011 he sold 20,000 equity shares in T Ltd. Of Rs. 10 each at Rs. 30 per shares.
Show Investment Account as it would appear in Aditya's books for the year ended 31-3-2011.

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