INVESTMENT ACCOUNTING (W.R.T.

AS 13) PRACTICAL PROBLEMS

PART I : ACCOUNTING FOR DEBT SECURITIES (DEBENTURES / BONDS)

Problem : 01 (Assignment)
On 1st April, 2019, Miss Prachiti had 1,000, 9% Debentures of ₹ 100 each at ₹ 108 (in K.K.
Limited) held as investments.
K.K. Ltd. pays interest on 30th June and 31st December every year. Prachiti had following
transactions during the year.
1st June, 2019 – Purchased 800, 9% Debentures at ₹ 98 ex-interest.
1st December, 2019 – Sold 900, 9% Debentures at ₹ 105 ex-interest.
Prepare Investments in 9% Debentures Account for the year ending 31.3.2020. Apply AS-13.
Problem : 02 (Assignment)
On 1-4-2019 Mrs. Minal had ₹ 3,00,000, 12% debentures at ₹ 94 each (face value ₹ 100).
Interest is payable half yearly on 30th June and 31st December every year.
On 1-9-2019 Mrs. Minal sold ₹ 90,000 of 12% debentures at ₹ 95 cum-interest
These 12% debentures were quoted at ₹ 96 per debenture at the stock exchange on 31-3-2020.
Draw up 12% Debenture account in the books of Mrs. Minal for the year ended 31-3-2020
Problem : 03
On 1st April, 2019; 200 6% debentures of ₹ 100 each of Excellent Ltd. were held as investment by
Mr. Tushar at a cost of ₹ 18,200.
Excellent Ltd. pays interest on 1st May and 1st November every year.
The following other transactions were entered by him during the year ended 31 st March, 2020 in
regard to these debentures :
Date No. of Debentures Transaction Rate
1st April, 2019 100 Sale ₹ 98 cum-interest
1st October, 2019 100 Purchase ₹ 104 ex-interest
1st December, 2019 200 Purchase ₹ 97 cum-interest
1st February, 2020 100 Sale ₹ 97 ex-interest
You are required to prepare investment in 6% debentures in Excellent Ltd. Account for the year
ended 31st March, 2020 as it would appear in the books of Mr. Tushar. (Apply AS–13).
Problem : 04 (Assignment)
During the year ended 31st March 2019 Mr. Ravi bought and sold the following 12% Debentures
of ₹ 100 each of ABC Ltd. Interest being payable by ABC Ltd. on 1st April and 1st October each
year.
Date Particulars
1/6/18 Bought 1,050 debentures at ₹ 95 ex-interest
1/9/18 Bought 350 debentures at ₹ 90 cum-interest
1/12/18 Sold 700 debentures at ₹ 95 ex-interest
 INVESTMENT ACCOUNTING (W.R.T. AS 13) PRACTICAL PROBLEMS

1/2/19 Bought 500 debentures at ₹ 96 ex-interest

Books are closed on 31st March every year. Market price on 31st March 2019 was ₹ 90 per
debenture.
You are required to prepare investment in 12% debenture in ABC Ltd. account for the year Apply
Problem : 05
Ms. Anusaya furnished the following details relating to her holding in 16% debentures of ₹ 100
each of X Ltd. held as current assets.
2019-January, 1 : Opening Balance – Face Value ₹ 6,00,000; Cost ₹ 5,90,000
2019-March, 1 : 1,000 debentures purchased ex-interest at ₹ 98.
2019-July, 1 : Sold 2,000 debentures ex-interest at ₹ 100.
2019-October, 1 : Purchased 500 debentures at ₹ 98 cum-interest.
2019-November, 1: Sold 2,000 debentures ex-interest at ₹ 99.
Interest dates are 30th September and 31st March. Ms. Anusaya closes her books on
31st December.
Show Investment A/c in the books of Ms. Anusaya for the year 2019.
Problem : 06
On 1st April 2019, Mr. Mohandas held 400, 6% debentures of ₹ 100 each of Best Ltd., cost
being ₹ 36,400.
Best Ltd. pays interest on 30th June and 31st December every year.
The following other transactions were entered by Mr. Mohandas during the year ended
31st March, 2020 in regard to these debentures :
Date No. of Debentures Transaction Rate (₹)
1st April, 2019 200 Sale 98 cum–Interest
1st October, 2019 200 Purchase 104 ex–Interest
1st December, 2019 400 Purchase 97 cum–Interest
1st February, 2020 200 Sale 97 ex–Interest
You are required to prepare investment in 6% debentures in Best Ltd. Account for the year ended
31st March, 2020, as it would appear in the books of Mr. Mohandas. Market value of his entire
investments as on 31-3-2020 was ₹ 56,200.
Problem : 07 (Assignment)
On 1st April, Mr. Dhana Balu held 500, 6% Central Government Bonds of ₹ 100 each at a cost
of ₹ 48,000. Interest is payable on 30th June and 31st December every year.
He entered into following transactions in respect of 6% Central Government Bonds during
the year ending on 31 March, 2020.
Purchases :
a) On 1 May, 2019 Face Value of ₹ 10,000 at ₹ 102 Cum-Interest.
b) On 1 September 2019, Face Value of ₹ 30,000 at ₹ 105 Ex-Interest.
 INVESTMENT ACCOUNTING (W.R.T. AS 13) PRACTICAL PROBLEMS

Sales :
a) On 1 August 2019, Face Value of ₹ 15,000 at ₹ 104 Cum-Interest.
b) On 1 February 2020, Face Value of ₹ 15,000 at ₹ 102 Ex-Interest.
Show 6% Central Government Bonds Account in the books of Mr. Dhana Balu for the year
ended 31 March 2020. (Investments are to be valued at weighted average cost).
Problem : 08 (Assignment)
Following transactions of 8% Debentures of ₹ 100 each of ‘ABC Ltd.’. Appears in the books of Mr.
Dattatray during the year ended 31/03/2020.
Interest is payable on 30th June and 31st December every year.
On 01/04/2019 he held 1,000 8% Debentures at a cost of ₹ 97,000.
Details of Purchases :
On 01/05/2019 he purchased 1,500 8% Debentures for ₹ 1,52,600 cum-interest.
On 01/11/2019 he purchased 2,250 8% Debentures @ ₹ 99 per debenture, ex-interest.
Details of Sales :
On 01/06/2019, he sold 1,500 Debentures @ ₹ 102 per debenture, cum-interest.
On 01/12/2019, he sold 1,800 8% Debentures @ ₹ 98 per debenture, ex-interest.
The market value of 8% Debentures held by Mr. Dattatray as on 31/03/2020 was ₹ 1,40,000.
Prepare 8% Debentures Account in the books of Mr. Dattatray for the year ended 31/03/2020.
(Round off figures to the nearest Rupee)
Problem : 09
Following Transactions appear in the books of Mr. Joshi for 12% Government Bonds of ₹ 100
each. Interest is payable on 30th June and 31st December every year. Transactions during the year
ended 31/03/2020 are as follows :
Date No. of Bonds Details
01/04/2019 2,400 Opening Balance at a cost of ₹ 2,28,000
01/06/2019 900 Sold @ ₹ 105 each cum Interest
01/09/2019 2,100 Purchased @ ₹ 98 each Ex-Interest
01/12/2019 1,200 Purchased @ ₹ 108 each Cum-Interest
01/02/2020 2,700 Sold @ ₹ 97 each Ex-Interest
Prepare 12% Government Bond A/c in the books of Mr. Joshi for the year ended 31/03/2020.
Market value of the above investment on 31.03.2020 was ₹ 2,03,456.
(Figures to be Rounded off to the nearest rupee)
Problem : 10
On 1st April 2019, Mr. Ramdas held 1000, 6% Central Government Bonds of ₹ 100 each at cost
of ₹ 96,000. Interest is payable on 30th June and 31st December every year.
 INVESTMENT ACCOUNTING (W.R.T. AS 13) PRACTICAL PROBLEMS
He entered into the following transactions in respect of 6% Central Government Bonds during the
year ending on 31st March, 2020 :
Purchases :
a) On 1st May, 2019, Face Value of ₹ 20,000 at ₹ 102 each, Cum-Interest.
b) On 1st September 2019, Face Value of ₹ 60,000 at ₹ 105 each, Ex-interest.
Sales :
a) On 1st August, 2019, Face Value of ₹ 30,000 at ₹ 104 each, Cum-Interest.
b) On 1st February 2020, Face Value of ₹ 30,000 at ₹ 102 each, Ex-interest.
Show 6% Central Government Bonds Account in the books of Mr. Ramdas for the year ended
31st March 2020. Market value of his entire Investments was ₹ 1,00,000 on 31-3-2020.
Problem : 11
Mr. Jayant holds 2,400, 6% Debentures of ₹ 100 each in Gemini Ltd. as on 1.4.2019 at a cost of
₹ 2,80,000. Interest is payable on 30th June and 31st December every year. Other details are as
follows :
1. On 01.06.2019, 800, 6% Debentures are purchased cum–interest at ₹ 81,600.
2. On 01.11.2019, 800, 6% Debentures are purchased ex–interest at ₹ 76,800.
3. On 30.11.2019, 1,200, 6% Debentures are sold cum–interest for ₹ 1,29,000.
4. On 31.12.2019, 1,600, 6% Debentures are sold ex–interest for ₹ 1,54,600.
Prepare 6% Debentures account in the books of Mr. Jayant valuing closing balance on 31.3.2020 at
cost or market price whichever is lower. The Debentures are quoted at par on 31.3.2020.
(Interest on 31.12.2019 to be recorded after giving effect to the sale transaction.)
 INVESTMENT ACCOUNTING (W.R.T. AS 13) PRACTICAL PROBLEMS
PART II : ACCOUNTING FOR EQUITY SHARES
Problem : 01 (Assignment)
The following transactions of Miss Naina took place during the year ended 31/03/2020 :
Date Transactions
12-04-2019 Purchased 1,00,000, Equity Shares of ₹ 10/- each in “ABC” Ltd. for ₹ 50,00,000/-
15-05-2019 “ABC” Ltd. made a Bonus issue of 3 Equity Shares for every 2 shares held.
30-06-2019 Naina sold 1,25,000 Bonus shares for ₹ 20/- each.
Prepare ‘Equity Shares in ABC Ltd.’ Account in the Books of Miss Naina for the year ended 31-3-
2020.
Problem : 02 (Assignment)
Mr. Jinen had 10,000 equity shares of AP Ltd. on 1st April, 2019. The face value of the share is ₹ 10
each but book value on 1st April, 2019 was ₹ 15 per share.
On 1st May, 2019 he purchased another 2,000 equity shares in AP Ltd., at having market price
of ₹ 13 each.
On 1st June, 2019, he purchased additional 3,000 equity shares of the same company at a market
price of of ₹ 5 higher than face value.
On 1st July, 2019 he sold 3,000 equity shares at ₹ 25 share.
On 1st October, 2019 the directors of AP Ltd. had declared and issued bonus shares at the rate of
one share for every four shares held as on that date.
On 1st December, 2019 he purchased 2,000 equity shares of AP Ltd. when market price was ₹ 20.
On 1st January, 2020, he purchased 3000 right shares in AP Ltd. at ₹ 18 per share.
On 1st February, 2020 he sold 2,500 equity shares for ₹ 25 per share.
Market Price of shares on 31st March, 2020 was ₹ 12 per share.
Prepare Equity Shares A/c in Mr. Jinen’s books for the year ended 31st March, 2020.
Problem : 03
On 1st April 2019 Mr. Rajesh holds 20,000 Equity Shares of ₹ 10 each in H Ltd., at a cost
of ₹ 3,00,000.
On 1st July 2019 he purchased 4,000 additional shares of the same Company at a cost of ₹ 64,000.
On 1st October 2019 Company issued bonus of one share for every six shares held as on that date.
On 1st January 2020 he purchased right shares, announced by Company at the rate of two shares
for every five shares held as on that date at ₹ 12 each.
On 31st January 2020 he purchased 2,000 additional shares of the same Company at a cost
of ₹ 36,000.
On 1st February 2020 he sold 1,000 shares for ₹ 20 each.
Prepare Investment in Equity shares account in the books of Mr. Rajesh for the year ended
31st March, 2020.

Problem : 04
 INVESTMENT ACCOUNTING (W.R.T. AS 13) PRACTICAL PROBLEMS
On 1st April, 2019, 5,000 Equity shares of ₹ 10 each of Apollo Ltd. were held as Investments by
Mrs. Meera at a cost of ₹ 48,000.
On 30th April 2019, she purchased 1,000 of such equity shares @ ₹ 12 per share.
On 2nd June 2019, the Company declared Bonus shares in the ratio of one share for every two
shares held.
On 30th June 2019, the Company made right issue in the ratio of one share for every two shares
held on payment of ₹ 13 per share. Mrs. Meera subscribed to 40% of the shares and sold the
balance of her rights @ ₹ 2 per share.
On 20th September 2019, Dividend was received @ ₹ 2 per share for the year ended 31/03/2019.
On 1st December 2019, 1,000 of such shares were sold by Mrs. Meera @ ₹ 20 per share.
Prepare : “Equity Shares in Apollo Ltd.” Account in the books of Mrs. for the year ended 31-03-
2020. (Round off figures to the nearest rupee)
Problem : 05 (Assignment)
On 1-4-2019 Aditya had ₹ 50,000 equity shares in T Ltd. The face value of the shares was ₹ 10
each but the book value was ₹ 24 per share.
On 1-6-2019 Aditya purchased 10,000 equity shares in T Ltd. at a premium of ₹ 6 per share.
On 1-7-2019, the directors of T Ltd. issued bonus shares at the rate of one share for every three
shares held.
On 1-01-2020 Aditya purchased 5,000 right shares in T Ltd. of ₹ 10 each at ₹ 15 per share.
On 31-01-2020 he sold 20,000 equity shares in T Ltd. of ₹ 10 each at ₹ 30 per share.
Show Investment A/c as it would appear in Aditya's books for the year ended 31-03-2020.
Problem : 06
Mr. Ashok entered into following transactions of Equity Shares of ₹ 10 each of Anmol Ltd.
Date No. of Shares Details
01/04/2019 1,500 34,500 Cost (Opening)
15/05/2019 1,000 Purchase @ ₹ 22/- per share
15/07/2019 2,500 Bonus shares received
15/12/2019 1,500 Sale @ ₹ 22/- per share
01/03/2020 1,000 Sale @ ₹ 24/- per share
Additional Information :
1. On 1st September 2019, dividend @ ₹ 3/- per share was received for the year ended
31/3/2019.
2. On 10th November 2019, the company made a right issue of equity shares in the ratio of one
share for every five shares held on payment of ₹ 20/- per share. Mr. Ashok subscribed for 50%
of the shares and sold remaining of his rights @ ₹ 3/- per share.
You are required to prepare Investment in Equity Shares A/c in the books of Mr. Ashok for the
year ended 31/03/2020. (Round off figures to the nearest Rupee.)
 INVESTMENT ACCOUNTING (W.R.T. AS 13) PRACTICAL PROBLEMS
Problem : 07 (Assignment)
On 1st April, 2019; Mr. Mayur had 30,000 equity shares in Jai Ltd. At a book value of ₹ 4,50,000
(face value ₹ 10 per share). On 22nd June, 2019; he purchased another 5,000 shares of the
company for ₹ 80,000.
The directors of Jai Ltd. Announced a bonus issue of equity shares in the ration of one share for
seven shares held on 16th August 2019.
On 31st August, 2019; the company made a right issue in the ratio of three shares for 8 shares
held on payment of ₹ 15 per share. Due date for the payment was 30th september, 2019. Mr.
Mayur subscribed to 2/3rd of the right shares and sold remaining of his entitlement to vinayak for
a consideration or ₹ 2 per share.
On 31st October, 2019; received dividends from Jai Ltd. @ 20% for the year ended 31st March,
2019.
Dividend for shares acquired by him on 22nd June, 2019 are to be adjusted against the cost of
purchase.
On 15th November, 2019; Mayur sold 30,000 equity shares at a premium of ₹ 5 per share.
You are required to prepare investments account in the book of Mr. Mayur. Assume that the books
of accounts are closed on 31st March, 2020 and shares valued at weighted average cost.
Problem : 08
On 1st April 2019, Mr. Vinay had 40,000 Equity shares of ₹ 10 each of Spectrum Ltd. purchased at a
cost of ₹ 15 per share.
On 1st May 2019, he purchased 10,000 Equity share of Satyam Ltd. (Face value ₹ 10 each) at ₹ 25
per share. On the same day he also purchased 20,000 Equity shares of Spectrum Ltd. at ₹ 12 each.
On 1st July, 2019 he sold 2,000 Equity shares of Satyam Ltd. @ ₹ 22 per share. Board of Directors of
Spectrum Ltd. announced rights issue of Equity shares, in ratio of one share for every three shares
held, at ₹ 20 each, full amount was payable by 31st August 2019. Shareholders were allowed to
renounce their right either in part or full to the outsiders. Mr. Vinay renounced 40% of his rights
at ₹ 5 per share and subscribed for the balance.
On 1st December 2019 Mr. Vinay sold 5,000 Equity shares of Spectrum Ltd. and 2,000 Equity
shares of Satyam Ltd. @ ₹ 30 and @ ₹ 27 per share respectively.
You are required to prepare:
1. Investment in Equity shares of Spectrum Ltd. A/c and
2. Investment in Equity shares of Satyam Ltd. A/c in the books of Mr. Vinay for the year ended
31st March, 2020.
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