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B.
Com V Semester – Advanced financial Accounting (CBCS Syllabus) 2020-2021 1
CHAPTER-1
HOLDING COMPANY ACCOUNTS
Problem: 1 B.Com V Semester - October / November 2011 (15 Marks)
R Ltd. acquired 40000 equity shares of Rs.10 each in S Ltd., on 1-1-2001. The following
are the balance sheets of two companies as at 31-12-2001.
Liabilities R Ltd., S Ltd.,
Shareholders Fund:
Shares of Rs. 10 each 1000000 500000
Reserves (1-1-2001) 100000 100000
P and L A/c (1-1-2001) 50000 30000
Profits for the year 60000 40000
Current liabilities:
Creditors 70000 50000
Bills Payable 10000 5000
Total 1290000 725000
Assets:
Fixed Assets
Land and Buildings 200000 150000
Plant and Machinery 300000 300000
Non-current investments
Shares in S Ltd., 500000 --
Current Assets
Stock 75000 50000
Sundry Debtors 50000 60000
Bills Receivable 10000 5000
Cash and Bank 155000 160000
Total 1290000 725000
Additional Information:
1. Bills receivable of R Ltd., includes Rs.5000 accepted by S Ltd., of which Rs. 1000
bills were discounted with its banker and Rs.2000 is endorsed to its creditors.
2. Sundry Debtors of R Ltd., include Rs.10000 due from S Ltd.,
3. Stock of S Ltd., include goods purchased from R Ltd., for Rs.30000, which were
invoiced by R Ltd., at a profit of 25% on the cost price.
Prepare a consolidated balance sheet of R Ltd., and its subsidiary S Ltd. as at 31-12-2001
ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

B.Com V Semester – Advanced financial Accounting (CBCS Syllabus) 2020-2021 2
Problem: 2 B.Com V Semester – December 2016 (15 marks)
H Ltd., acquired 5000 equity shares of S Ltd., on 31-8-2015. The balance sheet of H Ltd.,
and its subsidiary S Ltd., as on 31-12-2015 was as follows:
Liabilities H Ltd S ltd

Shareholders fund
Equity shares of Rs. 10 each 800000 80000
General reserves 120000 20000
Profit and loss account 80000 30000
Noncurrent liabilities:
8% Debentures 100 each -- 50000
Sundry creditors 100000 40000
Bills payable 10000 5000
Total 1110000 225000
Non Current assets: Tangible assets
L&B 300000 80000
P&M 245000 60000
Furniture 40000 10000
Intangible assets
Goodwill 50000 --
Non-Current Investments
In shares of S Ltd 100000 --
In 2000 Debentures of S at par 20000 --
Current assets:
Debtors 180000 30000
Bills receivable 10000 5000
Stock 160000 38000
Cash 5000 2000
Total 1110000 225000
1. Creditors of S Ltd., include Rs.12000 due to H Ltd.,

2. Bills payable of S Ltd., Rs.5000 due to H Ltd., of which H Ltd., got bills discounted worth
Rs.3000
3. On the date of acquisition of shares by H Ltd.,:
a. The S Ltd., had a reserves of Rs.20000 and P&L account credit balance of Rs.15000
b. S Ltd., had L&B and P&M were found to be undervalued by Rs.20000 and
overvalued by Rs.10000 respectively. Changes are yet to be incorporated.
c. The stock of Y Ltd., includes goods to the value of Rs.3000 which were supplied by
H Ltd., at a profit of 1/3 on cost.
Prepare a consolidated balance sheet of H Ltd., and its subsidiary S Ltd., as on 31-12-15

Problem: 3 B.Com V Semester - November 2017 (15 Marks)

On 31-3-2017 the balance sheet of Dev Ltd and Vikas Ltd stood as follows:
Liabilities Dev Ltd Vikas Ltd
Shareholders Fund:
Share capital 1300000 400000
General Reserves 300000 120000
P and L A/c 120000 80000
Sundry Creditors 80000 30000
Total 1840000 650000
Assets:
Tangible Assets
Fixed assets 900000 300000
Non-current investments
Investments (60% Shares in Vikas Ltd) 340000 --
Current Assets
Stock 260000 190000
Bills Receivable 80000 70000
Sundry Debtors 260000 90000
Total 1840000 650000
Draw a consolidated balance sheet as on 31-3-2017 after taking into consideration the
following:
a. Dev Limited acquired shares of Vikas Ltd as on 30-9-2016
b. Vikas Limited earned profit of Rs. 50000 for the year ended dated 31-3-2017
c. Bills receivable of Dev limited include Rs.20000 due from Vikas Ltd.
d. The value of Fixed assets of Vikas Limited was undervalued by Rs. 50000
e. Stock of Dev limited includes worth Rs. 60000 supplied by Vikas Limited which
were invoiced at profit of 25% on cost.

Problem: 4 B.Com V Semester – Dec -2008, Dec – 2009 and Dec - 2013 (15 Marks)
On 31-3-2003 the balance sheet of H Ltd and its subsidiary S Ltd stood as follows:
Liabilities H Ltd S Ltd
Share capital 800000 200000
P and L A/c 90000 55000
Bills Payable (including Rs. 2000 due to H) 20000 10000
Total 1160000 405000
Assets:
75% shares in S Ltd at Cost 280000 --
Stock 105000 77000
Other current assets (BR included 1500 due from S) 225000 128000
Total 1160000 405000
Draw a consolidated balance sheet as at 31-3-2003 after taking into consideration the
following information:
a. H Ltd., acquired shares in S Ltd., on 31-7-2002
b. S Ltd., earned a profit of Rs.45000 for the year ended 31-3-2003
c. On 1-1-2003 S Ltd., sold to H Ltd., goods costing Rs.15000 for Rs.20000
d. On 31-3-2003 ½ of the above goods were lying unsold in the godown of H Ltd.,
e. Sundry debtors of H Ltd., include Rs.12500 due from S Ltd.,

Problem: 5 B.Com V Semester – December 2015 (15 Marks)

Liabilities Arathi Ltd., Bharathi
Ltd.,
Share capital:
Shares of Rs. 100 each 500000 200000
P and L A/c 30000 10000
1000, 12% Debentures -- 100000
Total 682000 403000
Assets:
Debtors 60000 30000
Stock 35000 15000
Investments:
Shares in Bharathi Ltd., 1500 shares at Rs. 120 each 180000 --
400, 12% debentures 40000 --
Cash 15000 30000
Total 682000 403000
Arathi Ltd., acquired shares in Bharathi Ltd., on 1-7-2015. General Reserves and P&L A/c
of Bharathi Ltd., were showing on 1-1-2015 the balances of Rs.30000 and Rs.4000
respectively.
Creditors of Bharathi Ltd., include Rs.10000 for goods supplied by Arathi Ltd., at a profit
of Rs.20% on sales. Half of the goods were still in stock of Bharathi Ltd., on 31-12-2015.
The Bills Payable accepted by Arathi Ltd., are all in favour of Bharathi Ltd., Prepare
consolidated balance sheet.

Problem: 6 Profits during the year transferred to reserves

H Ltd., acquired 80000 shares of Rs. 10 each in S Ltd., on 1-1-2002. The summarised
balance sheet of H Ltd., as on 30 th June 2002 was as follows.
Liabilities H Ltd., S Ltd.,
Share capital:
Shares of Rs. 10 each 2000000 1000000
P and L A/c 50000 45000
9% Debentures -- 200000
Total 2570000 1605000
Assets:
Fixed assets
Machinery 600000 450000
Investments:
Shares in S Ltd., 880000 --
9% Debentures in S Ltd., 80000 --
Current assets
Stock 520000 650000
Debtors 180000 270000
Cash 280000 180000
Total 2570000 1605000
1. Bills Receivable of S Ltd., include bills for Rs.8000 acquired by H Ltd.,
2. Creditors of S Ltd., include Rs.20000 due to H Ltd.,
3. An amount of Rs.30000 was transferred by S Ltd., from the current year profits
to reserves
You are required to prepare the consolidated Balance sheet on 30-6-2002

Problem: 7 B.Com V Semester – December 2009, 2013 & 2015 (15 Marks)
Liabilities H Ltd., S Ltd.,
Share capital:
Shares of Rs. 100 each 500000 200000
P and L A/c 80000 --
General reserves 100000 --
Total 755000 345000
Stock in trade 90000 40000
Debtors 60000 30000
6% debentures in S Ltd 60000 --
Shares in S Ltd., 1500 shares at Rs. 80 each 120000 --
Cash and bank 75000 25000
Profit and loss account --- 100000
Total 755000 345000
a. H Ltd., acquired shares in ‘S’ Ltd., on 1-4-2015. The profit and loss account of S
Ltd., showed a debit balance of Rs.150000 on 1-1-2015.
b. Sundry creditors of S Ltd., include Rs.20000 for goods supplied by H Ltd., on
which H Ltd., made a profit of Rs.2000. Half of the goods were still in stock on
31-12-2015. Prepare consolidated balance sheet.

Problem: 8 B.Com V Semester – November 2017 (15 Marks)
The balance sheet of P Ltd., and its subsidiary Q Ltd., on 31-3-2017 was as follows:
Liabilities P Ltd., Q Ltd., Assets P Ltd., Q Ltd.,
Share capital: Goodwill 90000 --
shares of Buildings 160000 165000
Rs.100 each 500000 300000 Plant and Machinery 140000 130000
General Reserves 120000 -- Stock 40000 80000
Profit and Loss A/c 30000 -- Sundry debtors 70000 1200000
8% Debentures 100000 200000 8% Debentures in Q Ltd 100000 --
Sundry Creditors 35000 25000 2000 shares in Q Ltd 180000 --
Bills payable 15000 10000 Bank 20000 10000
Profit and loss account -- 30000
800000 535000 800000 535000
P Limited acquired the shares of Q Limited on 1-7-2016. The profit and loss account of Q
Limited showed a debit balance of Rs. 90000 on 31-3-2016.
Buildings of Q Limited was overvalued by Rs. 20000.
Prepare a consolidated balance sheet.

The following are the balance sheets of X Ltd., and Y Ltd., as on 31-12-2015
Liabilities X Ltd Y Ltd Assets X Ltd Y Ltd
Shares of Rs.100 each 400000 200000 Fixed assets 260000 120000
Capital reserves 40000 -- Investments:
General Reserves 40000 -- In shares of Y Ltd 140000 --
Profit and Loss A/c 40000 -- Stock 80000 40000
Sundry Creditors 40000 20000 Debtors 70000 30000
Cash 10000 5000
560000 220000 560000 220000
X Ltd., acquired 1600 shares of Y Ltd., on 30-6-2015. On 1-1-2015 Profit and Loss A/c of Y
Ltd., had a debit balance of Rs.40000. Sundry creditors of Y Ltd., include Rs.8000 due to X
Ltd. On the date of acquisition of shares, it is found that fixed assets of Y Ltd., were found to
be overvalued by Rs.10000.
Prepare consolidated balance sheet of X Ltd., and its subsidiary Y Ltd., as on 31-12-2015

Problem: 10 B.Com V Semester – November 2012 & 2014 (15 Marks)
The following are the balance sheets of Sun Ltd., and Moon Ltd., as on 31-12-2011
Liabilities Sun Moon Assets Sun Moon
Share capital: Goodwill 6000 --
shares of Rs.100 each 60000 30000 Buildings 25000 1300
General Reserves 20000 -- Plant and Machinery 19000 8500
Profit and Loss A/c 10000 -- Stock 9500 5500
9% Debentures -- 12000 Sundry debtors 7000 3000
Sundry Creditors 6500 4000 9% Debentures in Moon
Bills payable 1500 Ltd at par 9000 --
2000 shares in Moon Ltd 16000 --
Bank 5000 3500
96500 47500 96500 47500
Sun Ltd., acquired the shares in Moon Ltd., on 1-5-2011. The profit and loss account on
Moon Ltd., showed a debit balance of Rs.20000 on 1 st January 2011; the bills payable of
Moon Ltd., were all issued to Sun Ltd., which company got the bills discounted. Included in
creditors of Moon Ltd., Rs.1700 for goods supplied by Sun Ltd.,; the stock of Moon Ltd.,
includes goods to the value of Rs.900 which were supplied by Sun Ltd., at a profit of 1/3 on
cost. The buildings of Moon Ltd., was undervalued by Rs.1100. Prepare consolidated
balance sheet

Problem: 11 B.Com V Semester – November 2012 & 2014 (15 Marks)
‘H’ Ltd., holds 80% of equity share capital of ‘S’ Ltd., which was acquired on 1-1-2013. When
the ‘S’ Ltd., had a credit balance in profit and loss account of RS.15000 and general reserves
of Rs.20000. Stock held by ‘H’ Ltd., include Rs.5000 for goods supplied by ‘S’ Ltd., at a profit
of 25% on cost. From the balance sheets, prepare consolidated balance sheet as on 31-12-
2013.
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Shares of Rs.10 each 500000 100000 Fixed assets 245500 23000
Capital Reserves 100000 5000 Investments:
General Reserves 120000 30000 8000 shares of B Ltd 120000 --
Profit and Loss A/c 40000 10000 Current assets 501000 160400
Sundry Creditors 149700 36000 Cash 64500 --
Bills payable 21300 1000 Underwriting commission -- 5000
Bank overdraft -- 6400
931000 188400 931000 188400
Bills payables of B Ltd were all issued to A, which company got the bills discounted.
Included in creditors of B Ltd., Rs.6000 for supplied by A Ltd.

Problem: 12
From the following balance sheets of H Ltd., and its subsidiary S Ltd., as on 31-12-2004.
Prepare the consolidated balance sheet.
Liabilities H Ltd S Ltd Assets H Ltd S Ltd
Share of Rs.100 each 200000 60000 Buildings 145000 50000
Reserves 50000 15000 Plant 60000 25000
Profit and Loss A/c 25000 21000 Stock 40000 10000
6% Debentures 70000 Debtors 35000 15000
Creditors 15000 10000 Bills Receivable 15000 10000
Bills Payable 5000 9000 Bank 10000 5000
Investments:
(400 Shares in S 60000 --
Ltd.,)
365000 115000 365000 115000
1. On the due date of acquisition of shares of S Ltd., by the H Ltd., the former had
undistributed profits of Rs.9000 and reserves of Rs.6000
2. The value of buildings and plant of S Ltd., were considered at Rs.65000 and Rs.16000
respectively.
3. Debtors of H Ltd., include Rs.5000 due from S Ltd., and also bills payable of H Ltd.,
include a bill of Rs.3000 accepted in favour of S Ltd.,

From the following balance sheets of X Ltd., and its subsidiary Y Ltd., as on 31-3-2012.
Prepare consolidated balance sheet.
Liabilities X Ltd., Y Ltd., Assets X Ltd., Y Ltd.,
Shares of Rs.10 each 800000 200000 Fixed Assets 550000 100000
Profit and Loss A/c 90000 55000 75% shares in Y Ltd. 280000 --
Reserves 150000 70000 Stock 105000 177000
Creditors 70000 50000 Bills Receivable 25000 28000
Bills Payable 50000 30000 Debtors 200000 100000
1160000 405000 1160000 405000
1. X company acquired shares on 30-6-2011
2. Y company earned profit of Rs.45000 for the year ended 31-3-2012
3. Debtors of ‘X’ Ltd. Include Rs.25000 due from Y Ltd.

Problem 14: B.Com V Semester – November 2018 (15 marks)
Strong company acquired 12000 equity shares of Rs. 10 each at a market price of Rs. 15
per share in Weak company as on 31-3-2018. Their balance sheet of these companies as
on 30-6-2018 were as follows:
Particulars Strong Ltd. Weak Ltd.
Equity share capital (of Rs. 10 each) 500000 200000
General Reserves (1-7-2017) 120000 50000
785000 400000
Investments in W Company shares 180000 --
Current assets 55000 45000
785000 400000
On 1-7-2017 the profit and loss account of W Limited was showing a credit balance of
Rs. 20000. Creditors of W Ltd includes Rs. 15000 to S Ltd for goods supplied, on which S
Ltd made a profit of Rs. 3000. 1/3 of these goods are unsold on 30-6-2018. Bills Payable
of W Ltd are all in favour of S Ltd. Of which the latter company got discounting bills
worth Rs. 7000. It is found that fixed assets of w Ltd are undervalued by Rs. 15000.
Prepare consolidated balance sheet of S Ltd and its subsidiary W Ltd as on 30-6-2018.


The following are the summarized balance sheet of X Ltd,. and Y Ltd,. as on 31.3.2019.
Particulars X Ltd Y Ltd
Equity share capital (of Rs. 10 each) 500000 150000
900000 335000
Free hold premises 225000 60000
Plant and Machinery 175000 80000
Debtors 150000 85000
Investments : 10000 shares in Y Ltd at cost 130000 --
Cash 20000 15000
Stock 160000 80000
900000 335000
You are required to prepare a consolidated balance sheet as on 31.3.2019 showing in
details necessary adjustments and taking into consideration for the following
information:
a) X Ltd. acquired the shares of Y Ltd. on 1.4.18 when the balances in their profit
and loss account and general reserves were Rs. 37500 and Rs. 40000
respectively.
b) The stock of Rs. 80000 held by Y Ltd consists of Rs. 30000 goods purchased from
X Ltd. who has charged profit at 25% on cost.
c) Sundry creditors of Y Ltd. includes Rs. 10000 due to X Ltd.


On 31.12.2020 the balance sheets ox X Ltd and Y Ltd stood as follows:
Particulars X Ltd. Y Ltd.
Equity share capital 800000 200000
Other current liabilities 25000 15000
1185000 420000
75% shares in Y Ltd 280000 --
Stock 105000 177000
Debtors 200000 100000
Rent paid in advance 25000 15000
1185000 420000
Prepare a consolidated balance sheet as at 31.12.2020 after taking into consideration
the following information.
a) X Ltd acquired shares on 30.6.2020
b) Y Ltd earned profit of Rs. 45000 for the year ended 31.12.2020.
c) Debtors of X Ltd include Rs. 25000 due from Y Ltd.
d) On 31.12.2020 Fixed assets of Y Ltd, are found undervalued by Rs. 10000, the
new values are to be incorporated.
e) The stock of Y Ltd includes Rs. 5000 goods supplied by X Ltd at a profit of 25% on
cost.

Problem 17: B.Com V Semester – Nov/Dec 2011, 2014 & 2015 (5 marks)
H Ltd., acquired 40000 shares of Rs.10 each of S Ltd., out of 50000 shares in S Ltd., at a
market price of Rs.18 per share. On the date of acquisition by H Ltd., S Ltd., had a profit and
loss account credit balance of Rs.80000 and Reserves of Rs.30000. There is discount on
issue of shares and debentures are Rs.20000.
Calculate Cost of Control.
H Ltd., Company acquired 800 shares in S Ltd., out of 1000 shares of Rs.50 each at a market
value of Rs.75 each on 1-7-2015. On 1-1-2015 S Company had a reserve of Rs.40000 and
Profit and Loss A/c (Credit) of Rs.30000. On 31-12-2015 when the books are closed, the
profit and loss account S Ltd., disclosed a profit of Rs.50000.
Calculate the Cost of Control.
Problem 19: V Semester – November 2017 (5 marks)
M Limited acquired 8000 shares of Rs. 100 each of N Limited out of 12000 shares of N
Limited at a market price of Rs. 150 per share. On the date of acquisition of shares of M
limited, N limited had profit and loss account credit balance of Rs. 150000 and Reserves of
Rs. 60000.
Calculate cost of control.

Following are the balance sheets of H Ltd., and its subsidiary S Ltd., as on 31.3.2020.
Liabilities H Ltd., S Ltd., Assets H Ltd., S Ltd.,
Share Capital 1200000 300000 Fixed Assets 825000 150000
Reserves 225000 105000 Shares in S Ltd at
Profit and Loss A/c 135000 82500 cost 420000 --
Creditors 180000 120000 Current Assets 495000 457500
1740000 607500 1740000 607500
H Ltd., acquired 75% shares on 1.9.2019. S Ltd earned a profit of Rs. 60000 for the year
ended 31.3.2020. Calculate Minority Interest.
Following are the balance sheets of H Ltd., and its subsidiary S Ltd., as on 31.3.2012.
Calculate Minority Interest.
Share Capital 250000 100000 Fixed Assets 425000 250000
Reserve fund 50000 25000 Shares in S Ltd (700
Profit and Loss A/c 50000 25000 shares in S ltd) 75000 --
Debentures -- 50000
500000 250000 500000 250000

Following are the balance sheets of H Ltd., and its subsidiary S Ltd., as on 31-12-2015.
E/S Capital of Re.10 each 200000 100000 Fixed Assets 104000 100000
General Reserves(1-1-15) 20000 10000 Current Assets 50000 50000
P&L A/c(1-1-15) 20000 8000 Investments:
Profits for the year 40000 22000 100% Shares in S 146000
Other Liabilities 20000 10000
300000 150000 300000 150000
H Ltd., acquired shares in S Ltd., on 31-12-2015. Prepare Consolidated Balance Sheet of
H Ltd., and its subsidiary S Ltd.,
Following are the balance sheets of H Ltd., and its subsidiary S Ltd., as on 31-12-2012.
E/S Capital of Re.1 each 120000 60000 Sundry assets 200000 120000
General Reserves 30000 10000 Investments: 75000 --
Profit and Loss A/c 20000 10000 60000Shares in S
Other Liabilities 105000 30000
275000 120000 275000 120002
H Ltd., acquired shares in S Ltd., on 31-12-2015. Calculate goodwill or capital reserves

From the following balance sheets of H Ltd., and S Ltd., (Subsidiary Company) as on 31-
12-2012, calculate minority interest:

Share Capital 100 each 250000 100000 Fixed Assets 425000 250000
Reserve fund 50000 25000 Investments in S
Profit and Loss A/c 50000 25000 Ltd.,(700 shares
Debentures -- 50000 of S Ltd.,) 75000 --
500000 250000 500000 250000
Particulars H Ltd S Ltd

Capital reserves -- 20000
8% Debentures 100000 --
Current liabilities 70000 30000
900000 450000
Land and buildings 250000 150000
Plant and machinery 260000 200000
Furniture and fittings 40000 20000
Investments in s company shares 250000 --
Preliminary expenses -- 10000
900000 450000
H Company Ltd acquired all shares of s Ltd on 31-12-2018. Prepare CBS

Particulars H Ltd S Ltd
Creditors 180000 120000
1515000 607500
Shares in S Ltd @ cost 420000 --
1515000 607500
H Company Ltd acquired 75% of shares, S Ltd. earned a profit of Rs. 67500 for the year ended
31.3.2019. Find out Minority interest.

B.Com V Semester – Advanced financial Accounting (CBCS Syllabus)–2021-2022 1
UNIT – II
FINAL ACCOUNTS OF BANKING COMPANIES
From the following particulars, prepare profit and loss account of Mahalakshmi Bank Ltd.,
for the year ended 31-3-2010.
Particulars Rs
Interest on Borrowings 50000
Discount on bills purchased 200000
Interest on term loans 300000
Interest on fixed deposits 150000
Profit on sale of investments 20000
Loss on exchange transactions 15000
Salaries 60000
Rent, rates and taxes 5000
Locker rent 5000
Interest on SB account 15000
Commission and exchange received 10000
General charges 25000
Provision for Taxation Rs.25000 and Rebate on bills discounted Rs.10000

Problem: 2 B.Com V Semester – November 2011, 2013 & 2017 (5 Marks)
From the following particulars, prepare profit and loss account Syndicate Bank Ltd., for the
year ended 31-3-2011.
Particulars Rs
Interest on deposits 1280000
Discount on bills discounted 596000
Interest on overdraft 640000
Rent and taxes 80000
Bad debts written off 120000
Interest on cash credit 928000
Commission (Cr) 40000
Sundry charges 40000
Audit fees 18000
Director fees 8600
Interest on loans 920000
A customer, who had borrowed Rs.20000, had become insolvent and it is ascertained that
Rs.15000 only can be recovered from his estate.

From the following particulars of Dynamic Bank, prepare the profit and loss account for the
year ending 31-3-2015.
Particulars Rs
Interest and Discount 1847500
Commission and exchange 100000
Director’s fees 27500
Postage and stationary 27500
Rent received 50000
Salary and allowances 250000
Profit on sale of investments 100000
Depreciation on buildings 15000
Audit fees 5000

From the following particulars prepare profit and loss account of Sowmya Bank Limited.
Particulars Rs
P and L a/c (Cr) balance on 1-4-2015 30000
Income from investment 10000
Loss on sale of investment 3000
Profit on exchange transaction 4000
Interest on:
a. Fixed deposits 65000
b. Overdraft 75000
c. Cash credit 30000
d. Saving deposits 20000
e. Current account (paid) 15000
f. Term loans 120000
Discount on bills purchased and discounted 70000
Operating expenses 106000

From the following particulars, prepare Profit & Loss Account of Sri Lakshmi Bank Ltd. for
the year ending 31-3-2017.
Particulars Rs
Bad debts 40000
Commission (Cr) 80000
Sundry charges 120000
Audit fees 48000
Director fees 12800

From the following particulars, prepare Profit & Loss Account of Lakshmi Bank Ltd. for the
year ending 31-3-2018.
Particulars Rs
P and L a/c (Cr) balance on 1-4-2017 29000
Interest on Fixed deposits 60000
Interest on cash credit and overdraft 40000
Discount on bills purchased and discounted 15000
Loss on exchange transaction 5000
Profit on sale of investment 2000
Interest received on investment 5000
Interest on S/B A/C 9000
Salaries 39000
Locker rent 3000
Other expenses of the bank 15000

From the following information, prepare Profit and Loss A/c of Manju Bank Ltd., for the year
ended 31-12-2019.
Particulars Rs
Commission received 16000
Salaries and allowances 108000
Rebate on bills discounted 98000
Interest on cash credits 446000
Interest on current accounts 84000
Interest on overdrafts 308000
Directors and auditors fees 8000
Interest on savings bank deposits 136000
Postage and telegram 9000
Lockers rent 3000
Depreciation on bank properties 14000
a. Provision for Bad Debts Rs.80000
b. Provision for income tax Rs.5000

From the following information, prepare Profit and Loss A/c of Renuka Bank Ltd., for the
year ended 31-3-2020.
Particulars Rs
P&L a/c (cr) balance on 1.4.19 30000
Income on investment 10000
Loss on sale of investment 3000
Profit on exchange transaction 4000
Interest on Savings bank deposits 20000
Interest on current account deposits 15000
Rebate on bills discounted 5000
Other expenses 106000
Statutory reserve 20%

SIMPLE AND SCHEDULE RELATED PROBLEMS
While preparing final accounts of banking company, under which schedule the following
items are shown:
a. Commission = Schedule No 14 – “Other incomes”
b. Share premium = Schedule No 2 – “Reserves and surplus”
c. Pension fund = Schedule No 5 – “Other liabilities and provision”
d. Treasury bills = Schedule No 8 – “Investments”
e. Promissory notes = Schedule No 8 – “Investments”
f. Commercial papers = Schedule No 8 – “Investments”
g. Furniture = Schedule No 10 – “Fixed assets”
h. Provident fund = Schedule No 5 – “Other liabilities and provision”
items are shown:
a. Non banking assets= Schedule No 11 – “Other assets”
b. Gold = Schedule No 8 – “Investments”
c. Silver = Schedule No 11 – “Other assets”
d. Interest earned = Schedule No 13 – “Interest earned”
e. Cash with other banks = Schedule No 7 – “Balance with other banks, money at call
and short notice”

items are shown:
a. Share premium= Schedule No 2 – “Reserves and surplus”
b. Interest paid on current deposit =Schedule No 15 – “Interest expended”
c. Stamps on hand = Schedule No 11 – “Other assets”
d. Balance with Vijaya bank= Schedule No 7 – “Balance with other banks, money at call
and short notice”
e. Non – banking assets = Schedule No 11 – “Other assets”
items are shown:
a. Demand draft issued = Schedule No 5 – “Other liabilities and provision”
b. Gold = Schedule No 8 – “Investments”
c. Interest on investment = Schedule No 13 – “Interest earned”
d. Loss on exchange transaction = = Schedule No (-14) – “Other incomes”
e. Share premium= Schedule No 2 – “Reserves and surplus”

items are shown:
a. Silver = Schedule No 11 – “Other assets”
b. Cash with other banks = Schedule No 7 – “Balance with other banks, money at call
and short notice”
c. Endorsement on behalf of customers = Schedule No 12 “Contingent liabilities”
d. Pension fund = Schedule No 5 – “Other liabilities and provision”
e. Term loans in India = Schedule No 9 – “Advances”

15 MARKS PROBLEMS
From the following information relating to Nithya Commercial Bank Ltd., prepare Profit and
Loss A/C and Balance sheet as at 31.03.2017.
Particulars Dr. (Rs) Cr. (Rs)
Share capital -- 500000
Reserve fund -- 220000
Current deposit -- 2020800
Saving deposit -- 1540600
Discount -- 560000
Profit & Loss A/C -- 510400
Fixed deposit -- 2218000
Commission -- 312200
Interest received -- 1596400
Dividend paid and received 80000 12000
Bad debts 42150 --
Establishment expenses 280850 --
Interest paid 865800 --
Other assets 840600 --
Premises 1215000 --
Cash in hand 283000 --

Investment in shares 690000 --
Cash with banks in India 540000 --
Term loans in India 1540000 --
Cash credit 2220000 --
Bills purchased 368000 --
Loans to employees 140000 --
Salaries 385000 --
9490400 9490400
Additional information:
a. Unexpired discount on 31.3.17 Rs. 56000
b. Provide Rs. 25000 for doubtful debts
c. Create provision for taxation of Rs. 75000
d. Bills for collection amounted to Rs. 200000
e. Depreciate premises by 10%.

The following is the Trail Balance of Trimurthy Bank Ltd. as on 31.3.2019.
Particulars Dr. (Rs) Cr. (Rs)
Subscribed share capital -- 1000000
Reserve fund -- 300000
Loans and cash credit 2970000 --
Premises 100000 --
Government securities 600000 --
Current deposits -- 2200000
Fixed deposits -- 250000
Savings bank deposits -- 100000
Profit and loss Account 1.4.18 -- 32000
Interest and discount - 256000
Telegraphic transfer -- 100000
Circular rates -- 50000
Branch adjustments -- 50000
Recurring deposits -- 40000
Salaries 56000 --
General expenses 54800 --
Rent and rates 4600 --
Directors fees 3600 --
Stock of stationary 17000 --

Bills purchased and discounted 92000 --
Interim dividend paid 34000 --
Shares 100000 --
Cash in hand and RBI 186000 --
Money @ call and short notice 160000 --
9378000 9378000
a. Provide for doubtful debts Rs. 5000
b. Interest accrued on investments Rs. 8000
c. Unexpired discount Rs. 380
d. Endorsements on behalf of customers Rs. 115000
e. Premises added during the year Rs. 20000
Depreciation on premises at 5% on opening balance. Prepare bank final accounts.
Note: Transfer to statutory Reserve 20% of profit for the year.

Following is the Trail Balance of Madhu Shalini Bank Ltd. as at 31.3.2018.
Particulars Debit Credit
Share Capital-Called Up -- 600000
Calls in Arrears 25000 --
Statutory Reserve Fund -- 120000
General Reserve -- 280000
Share Premium -- 8000
Fixed Deposits -- 400000
Current Deposits -- 300000
SB A/C -- 600000
Short Loans -- 20000
Borrowings -- 80000
Branch Adjustment -- 35000
Gift cheques issued -- 32000
Demand drafts -- 35000
Travellers Cheque issued -- 22000
Interest and discount -- 300000
Cash in Hand & with RBI 85000 --
Balance with SBI 60000 --
MCSN 130000 --
Treasury Bills 200000 --

Investment in securities 400000 --
Gold 200000 --
Silver 80000 --
Building 200000 --
Furniture(Rs.10000 purchase during 80000 --
the year 2018)
Non Banking Assets 40000 --
Cash Credits and overdrafts 440000 --
Bills Purchased and Discounted 320000 --
Term loans 525000 --
Profit on Exchange Transaction -- 13000
Commission and Brokerage -- 15000
Locker Rent -- 2000
Interest on Deposits 72000 --
Interest on Borrowings 22000 --
Salaries 48000 --
Other Expenses of the Bank 55000 --
P&L A/C on 1-4-2017 -- 160000
Dividend Paid 40000
3022000 3022000

Adjustments:
1. Depreciate Furniture at 10% on Opening Balance
2. On 31-3-2018 MCSN collected Rs.25000 but the entry is not yet incorporated in the
books of accounts.
3. Provide for Taxation Rs.60000.
4. Bills for collection Acceptances, Endorsements, etc. are Rs. 50000 and Rs. 75000
respectively.
Prepare the Final Account of the Bank.
Note: Transfer to statutory Reserve 20% of profit for the year.

Indian Bank Ltd. Presents its ledger balances on 31.3.2020 as at 31.3.2020.
Particulars Rs
Fixed deposits 290000
SB deposits 100000
Current Account deposits 500000
Furniture 300000
P&L A/c on 1.4.2019 (Cr) 32000
Interest and discounts 256000
Interim dividend 34000
Shares in company 100000
Reserve fund 500000
Share capital 1000000
Money at call 160000
Cash balance with RBI 200000
Cash with other banks 186000
Loans 492000
Stock of stationary 17000
General expenses 54800
Rent and Rates 64200
Investments 800000
Cash credits 170000

Premises 100000
Other information:
1. Interest receivables on investments - 16000
2. Provide for doubtful debts Rs. 10000
3. Rebate on bills discounted 760
4. Interim dividend declared was 4% on actual
5. Additions made to premises during the year Rs. 20000
6. Depreciate premises at 5% on opening balance.
Prepare P&L a/c and Balance sheet of the Bank.

Problem: 5
Following is the Trial Balance of P.R.N Bank Ltd., as at 31-03-2018
Share Capital-Called Up 800000
Calls in Arrears 20000
Statutory Reserve on 1-4-2017 200000
Reserve Fund 70000
Share Premium 20000
P&L A/c on 1-4-2017 60000
Fixed Deposits 600000
Savings Deposits 500000
Current Deposits 200000
Recurring Deposits 50000
Cash Certificate Issued 40000
Borrowings from SBI 100000
Creditors 25000
Demand Drafts 25000
Mail Transfers 10000
Travellers Cheque issued 15000
Branch Adjustment 35000
Short Loans 20000
Non-Banking Assets 45000

Silver 30000
Furniture 100000
Premises 200000
Cash Credit 400000
O/D 300000
Gold 100000
Government Securities 300000
Shares in XYZ Co., 100000
MCSN 120000
Balance with Karnataka Bank 30000
Cash in Hand 75000
Balance with RBI 80000
Salaries 100000
Depreciation 22000
Audit Fee 12000
Directors Fee 15000
Electric Bills 5000
Insurance 3000
Other Expenses 25000
Interest Earned 320000
Discount on Bills 60000
Income on Investment 10000

Profit on Sale of Investment 3000
Locker Rent 7000
Loss on Exchange Transaction 3000
Loss on Sale of Furniture 1000
Commission and Brokerage 3000
Interest on Deposits 130000
Interest on Borrowings 15000
Contribution to Employee’s Provident Fund 5000
Employee’s Provident Fund 60000
Loans 997000
3233000 3233000
Adjustments:
1. Provide for Bad and Doubtful Debts Rs.10000
2. Provide for Taxation Rs.40000
3. Provide for Rebate on Bills Discounted Rs.12000
4. Bills for Collection Rs.30000
5. Acceptances, Endorsement and Other obligations Rs.100000
Prepare P&L A/c and Balance Sheet of the bank as at 31-3-2018

Problem: 6
Dhanalakshmi Bank as an Authorized Capital of Rs.2000000 in Equity Share of Rs.100each.
Its Trial Balance as on 31-3-2018 was as follows
Particulars Rs
DEBIT BALANCE
Premises 500000
MCSN 600000
Bills Discounted 200000
Furniture 65000
Investment in Govt. Securities 2500000
Cash in Hand 400000
Loans and O/D 2300000
Cash Credit 900000
Non-Banking Assets 40000
Cash with Other Banks 146000
Commission 10000
Cash with RBI 115000
Audit Fee 18000
Interest on Deposits 300000
Salaries 150000
Printing and Stationary 31000
Advertisement 15000

Depreciation 20000
8310000
CREDIT BALANCE
Issued and Subscribed Capital (10000 Shares of Rs.100each) 1000000
Fixed Deposits 2500000
SB Deposits 1000000
Current Account 1200000
Interest and Discount 800000
Reserve Fund 500000
Bills Payable 100000
P&L A/c on 1-4-17 150000
Pension Fund 50000
Borrowing from Other Banks 800000
Rent Received 20000
Unclaimed Dividend 10000
Commission 180000
8310000
The following information should be considered:
a. Rebate on Bills discounted Rs.4000 at the end
b. Provide Rs.20000 for doubtful debts
c. Bills for collection amount to Rs.20000
d. Acceptances on behalf of customs Rs.40000
e. Create Provision for Rs.100000 for taxation.

B.Com V Semester–Advanced Financial Accounting (CBCS Syllabus) 2021-2022 Batch 1
CHAPTER-3
FINAL ACCOUNTS OF LIFE INSURANCE COMPANIES
POINTS TO BE REMEMBERED
Schedule 4→Benefit paid

• Claims
• Annuities
• Bonus, Bonus in reduction of premium
• Surrenders
Schedule 9→Loans
• Mortgages
• Loans against company policies
Schedule 11→Cash and bank balance
• Cash in hand
• Cash at bank
• Cash in deposit
• Balance with RBI and Cash at RBI
Schedule 12→Current Assets
• O/S Incomes, Prepaid Expenses
• Agents Balance
• O/S Interest on Investments
• Due from others
• O/S Premium
Schedule 13→Current Liabilities
• O/S Expenses, Incomes received in Advance
• Sundry Creditors
• O/S Claims
• Premium on Deposit
Income from Investments:

• Interest and Dividend (subtract Income Tax thereon from this item)
Other Incomes:
• Profit on sale of Assets
• Profit on sale of Investments
• Consideration for Annuities granted
• Transfer fees, Fines, Penalties, Fees received
Problem: 1 B.Com V Semester – November 2016 (5 marks)
State under what schedule the following items are shown in the final accounts of Life
Insurance Company:
Question Schedule Answer
1) Surrenders 4 Benefits paid
2) Loan on policies 9 Loans
3) Deposit with RBI 11 Cash in hand and at bank (Current Assets)
4) Annuities 4 Benefits paid
5) Remuneration to Employees 3 Operating Expenses

Insurance Company:
2) Agents Balance (Dr) 12 Advances
3) Premium on deposits 13 Current liabilities
4) Legal and Professional charges 3 Operating expenses
5) Consideration of Annuities Granted - Other Incomes
**********

Problem: 3 B.Com V Semester – November 2007 and 2012 (5 marks)

The following figures relate to the United Insurance Company Ltd., for the year ended 31-3-
2007, Prepare Revenue Account
Particulars Rs
Claims 560000
Management expenses 250000
Life fund at the beginning 12000000
Premium 850000
Bonus in reduction of premium 25000
Transfer fees 10000
Dividend paid to shareholders 50000
Transfer to reserves 20000
a. Further bonus in reduction of premium Rs.6000
b. Claims recovered under reinsurance Rs.56000

The following balances are extracted from the books of Max Life Insurance Company
limited as on 31st December 2006.
Particulars Rs
Life insurance fund 1-1-2006 1500000
Premium 496000
Consideration for annuities 15000
Annuities 2050
Claims outstanding 1-1-2006 4500
Claims paid during the year 64900
Surrenders 4000
Transfer fees 2000
Dividend paid 90000
Prepare Revenue account after making the following adjustments:
a) Claims outstanding at the end Rs.14000
b) Premium outstanding at the end Rs.4600


The following balances are extracted from the books of Latha Life Insurance Company Ltd.,
as on 31-12-2008.
Particulars Rs
Premium 475000
Annuities 2750
Surrenders 5000
Transfer fees 650
Dividend paid 70000
From the following particulars prepare Revenue account of Veena Life Insurance Company
Particulars Rs
Claims by death 280000
By maturity 320000
Outstanding claims on 1-4-2009 20000
Consideration for annuities granted 82000
Premium less reinsurance 460000
Reversionary bonus 60000
Interest and dividend 120000
Tax on interest and dividend 12000
Surrenders 68000
Annuities 40000
Outstanding premium on 1-4-2009 15000
Life assurance fund on 1-4-2009 825000

2011. Prepare Revenue Account.
Particulars Rs
Claims 580000
Premium 970000
a) Further bonus in reduction of premium Rs.10000
b) Claims recovered under re-insurance Rs.20000

From the following information prepare Revenue account of Life Insurance Company Ltd.,
Particulars Rs
Claims by maturity 30000
Premium 7000000
Annuities paid 50000
Bonus paid in cash 2500
Expenses of management 30000
Commission 9000
Interest and dividends 97000
Income tax thereon 35710
Life assurance fund at the beginning 1520000


Prepare Revenue Account of the Life Insurance Company for the year ended 31.3.2019.
Particulars Rs
Claims by death and maturity 200000
Premiums 900000
Commission 100000
Commission on reinsurance accepted 5000
Interest, dividends etc. 100000

Prepare Revenue Account of the Jeevan Life Insurance Company for the year ended
31.3.2018.
Particulars Rs
Balance of fund on 1.4.17 245000
Premium received 282000
Claims paid 112000
Surrenders adjusted against loans on policies 15000
O/S premium on 1.4.17 5000
O/S claims on 1.4.17 7000
Premium on re-insurance ceded 12000
Claims on re-insurance ceded 7000
Commission paid on direct business 25000
Commission on re-insurance accepted 3000
a. O/S claims on 31.3.18 – Rs. 7000
b. O/S premium on 31.3.18 – Rs. 8000

Problem: 11 B.Com V Semester – November 2009, 2012 and 2013 (15 marks)
The following trial balance was extracted from the books of National Life Assurance
Company Ltd., as on 31-3-2002.
Particulars Debit(Rs) Credit(Rs)
Share capital (share of Rs.100 each) -- 160000
Life assurance fund as on 1-4-2002 -- 2972300
Dividend paid 15000 --
Bonus on policy holders 31500 --
Premium received -- 101500
Claim paid 197000 --
Commission paid 9300 --
Management expenses 32300 --
Mortgage in India 492200 --
Interest and dividends received -- 112700
Agent’s balance 9300 --
Free hold premises 40000 --
Investments 2305000 --
Loan to company policies 173600 --
Cash on deposits 27000 --
Cash in hand and on current account 7300 --
Surrenders 7000 --
3346500 3346500
You are required to prepare the company’s Revenue Account for the year ended
31-3-2002 and its balance sheet as on that date after taking the following matters into
consideration:
a. Claim admitted but not paid Rs.9300

b. Management expenses due Rs.200
c. Interest accrued Rs.19300
d. Premium outstanding Rs.12000
e. Commission of reinsurance ceded Rs.5000
f. Bonus utilized in reduction of premium Rs.2000
g. Claims covered/to be recovered under re-insurance Rs.2300

Problem: 12
The following balances have been extracted from the books of Bharath Insurance Company
Ltd., for the year ended 31-12-2001.
Particulars Rs
Amount of life assurance fund at the beginning of the year 1570562
Claims by Maturity 96420
Premium 210572
Commission 36541
Consideration of annuities granted 10620
Interest, dividend and rents 52461
Income tax paid 3060
Surrenders 21768
Annuities 29420
Bonus paid in reduction of premium 3500
Preliminary expenses 600
Claims admitted but not paid at the end of the year 80034
Annuities due but not paid 22380
Capital: Paid up 600000
Government securities 1690890
Sundry fixed assets 568110
Investment reserve 50000
Premium on deposits 10000
Prepare the Revenue account and balance sheet after taking into account the following:
a. Claims covered/ to be recovered under reinsurance Rs.10000

b. Further claims intimated Rs.8000
c. Further bonus utilized in reduction of premium Rs.1500
d. Interest accrued Rs.15400
e. Premium outstanding Rs.7400
f. Premium covered under reinsurance Rs.2000
g. Premium recovered under reinsurance Rs.5000

Problem: 13
The following balances were extracted from the books of Mutual Life Assurance Company
as on 31-3-2006.
Debit Rs Credit Rs
Mortgages 1400000 Outstanding claims 22000
Buildings 145000 Premiums 3394000
Loans 155000 Consideration for annuities granted 420000
Investments 1200000 Interest and dividends 100000
Surrenders 25000 Life Assurance Fund (1-4-2005) 900000
Annuities 12000 Premium on deposits 40000
Claims by death 700000 Agents balance 10000
Agent’s balance 5000
Deposits with RBI 30000
Outstanding premises 35000
Commission 54000
Cash at bank 50000
Sundry debtors 63000
Interest accrued but not received 7000
4886000 4886000
You are required to prepare the final account after taking into account the following
adjustments:
1. Premiums outstanding Rs.4500
2. Interest accrued Rs.3700

3. Claims admitted but not paid Rs.3200
4. Surrender claims not paid Rs.1100
5. Further Bonus utilized in reduction of premium Rs.2000
6. Commission on reinsurance ceded Rs.5000
7. Surrenders adjusted against loans on policies Rs.5000


From the following trial balance of Chandaran Life Insurance Company, prepare Revenue
Account for the year ended 31-12-2006.
a. Claims outstanding as at 31-12-2006 Rs.15000
b. Claims to be recoverable/covered from re-insurer Rs.5000
d. Further claims intimated Rs.2500
f. Management expenses due Rs.6000
g. Surrenders adjusted against loan on policies Rs.10000


Life assurance fund on 1-1-2006 -- 1600000
Claims paid 65000 --
Claims outstanding on 1-1-2006 -- 10000
Mortgage loans 450000 --
Loan on policies 140000 --
Commission 20000 --
Premium deposits -- 30000
Investment fluctuations fund -- 50000
Depreciation on fixed assets 5000 --
Fixed assets 150000 --
Sundry creditors -- 40000
Interest and dividends -- 100000
Surrenders 20000 --
Outstanding premium on 31-12-2006 50000 --
Interest accrued 10000 --
Sundry debtors 25000 --
Income tax deducted on interest 10000 --
Bonus in reduction of premium 4000 --
Premiums -- 400000
Agents balance 1000 --
Cash at bank 80000 --
2430000 2430000


Company Limited as on 31-3-2014. Prepare final accounts of Life Insurance.

Interest and dividend received -- 225400
Surrenders 14000 --
Mortgages in India 984400 --
Free hold property/Premises 480000 --
Loan on company policies 347200 --
Bonus to policy holders 63000 --
7093000 7093000
a) Bonus utilized in reduction of premium Rs.4000

b) Claims covered under re-insurance Rs.4600
c) Claims admitted but not paid Rs.18000
d) Premium outstanding Rs.24000
e) Interest accrued Rs.38600
f) Management expenses due rs.400
g) Depreciate premises by 10% p.a.


The following are the balances extracted from the books of the Jeevan Life Insurance
Particulars Rs
Life insurance fund as on 1-4-2005 1470562
Premium 210572
Dividend paid 20000
Fines / penalty 92
Annuities 29420
Stamps on hand 400
Mortgages 309110
Freehold premises 500000
House property 320000
Commission 26541
Interest, dividend and rent 52461
Income tax on interest 3060
Surrenders 21860
Claims admitted but not paid 80034
Prepare final accounts of the company after taking into consideration, the following:
d. Re-insurance premium Rs.6000
f. Managing director is to be paid a commission of 10% on the net increase the life
assurance fund during the year after providing/charging for such commission.


Following is the Trial Balance of Anitha Life Insurance Company as on 31-12-2015
Equity Share Capital of Rs.100 each -- 300000
Balance of fund on 1-4-2015 -- 450000
General reserves -- 100000
Borrowings from bank -- 200000
8% Government Bonds 100000 --
Investment on shares of Infosys Company 260000 --
Loans on company policies 360000 --
Premiums 200000 --
Furniture 60000 --
Deposits with SBI 70000 --
Deposits with RBI 130000 --
Current Liabilities -- 250000
Premium less reinsurance -- 520000
Claims by death 85000 --
Claims by maturity 95000 --
Surrenders 25000 --
Consideration for annuities granted -- 80000
Interest, dividend etc -- 60000
Tax deducted at source on the above 8000 --
Annuities paid 7000 --
o/s claim on 1-4-2015 -- 10000
o/s premium on 1-4-2015 8000 --

Commission on direct business 40000 --

Commission on reinsurance ceded -- 8000
Commission on reinsurance accepted 6000 --
1978000 1978000
1. Claims covered under reinsurance Rs.15000
2. Surrenders adjusted against loan on policies Rs.8000
3. o/s claims on 31-3-2016 Rs.7000
4. o/s premium on 31-3-2016 Rs.11000
Prepare Revenue Account and Balance sheet as on 31-3-2016


The following balances have been extracted from the books of Bharatha Life Insurance Co.
Ltd. For the year ended 31.3.2018:
Particulars 36541
Life fund at the beginning of the year 1870562
Commission 36541
Interest, Dividend and Rent 52461
Income tax on Interest and dividend 3060
Surrenders 21768
Annuities 29420
Claims admitted but not paid at the end 20034
Paid up capital 600000
Premium deposits 10000
Loans on company policies 300000
Prepare Revenue Account and Balance Sheet after taking into account the following
information:

a. claims covered under re-insurance – Rs. 10000
b. further claims intimated – Rs. 8000
c. further bonus utilized in reduction of premium – Rs.2000
d. surrenders adjusted against loans on policies – Rs. 7000


The following Trail Balance was extracted from the books of Bharath life Assurance
Company Ltd. as on 31-3-2019.
Balance of Life fund on 1-4-2018 -- 2972300
Premium less reinsurance premium -- 161500
Outstanding claims (1-4-2018) -- 7000
Commission 9300 --
Interest, dividend and rents -- 112700
Freehold premises 40000 --
Loans on policies 273600 --
Cash on current account 7300 --
Surrenders 7000 --
Medical fees 7000 --
Annuities 10000 --
3663500 3663500
Prepare the Revenue Account and a Balance Sheet of the company after taking into account
following adjustments:

a. Claims outstanding Rs. 20000.
b. Further bonus in reduction of premium Rs. 15000.
c. Premium outstanding Rs. 5000.
d. Claims covered under re-insurance Rs. 100000.
e. Management expenses due Rs. 40000.

CHAPTER-3
FINAL ACCOUNTS OF LIFE INSURANCE COMPANIES
POINTS TO BE REMEMBERED
Schedule 4→Benefit paid

• Claims
• Annuities
• Bonus, Bonus in reduction of premium
• Surrenders
Schedule 9→Loans
• Mortgages
• Loans against company policies
Schedule 11→Cash and bank balance
• Cash in hand
• Cash at bank
• Cash in deposit
• Balance with RBI and Cash at RBI
Schedule 12→Current Assets
• O/S Incomes, Prepaid Expenses
• Agents Balance
• O/S Interest on Investments
• Due from others
• O/S Premium
Schedule 13→Current Liabilities
• O/S Expenses, Incomes received in Advance
• Sundry Creditors
• O/S Claims
• Premium on Deposit
Income from Investments:

• Interest and Dividend (subtract Income Tax thereon from this item)
Other Incomes:
• Profit on sale of Assets
• Profit on sale of Investments
• Consideration for Annuities granted
• Transfer fees, Fines, Penalties, Fees received
Insurance Company:
1) Surrenders 4 Benefits paid
2) Loan on policies 9 Loans
3) Deposit with RBI 11 Cash in hand and at bank (Current Assets)
5) Remuneration to Employees 3 Operating Expenses

Insurance Company:
2) Agents Balance (Dr) 12 Advances
3) Premium on deposits 13 Current liabilities
4) Legal and Professional charges 3 Operating expenses
5) Consideration of Annuities Granted - Other Incomes
**********


2007, Prepare Revenue Account
Particulars Rs
Claims 560000
Premium 850000
Transfer fees 10000
a. Further bonus in reduction of premium Rs.6000
b. Claims recovered under reinsurance Rs.56000

The following balances are extracted from the books of Max Life Insurance Company
limited as on 31st December 2006.
Particulars Rs
Premium 496000
Annuities 2050
Surrenders 4000
Transfer fees 2000
Dividend paid 90000


The following balances are extracted from the books of Latha Life Insurance Company Ltd.,
as on 31-12-2008.
Particulars Rs
Premium 475000
Annuities 2750
Surrenders 5000
Transfer fees 650
Dividend paid 70000
From the following particulars prepare Revenue account of Veena Life Insurance Company
Particulars Rs
By maturity 320000
Outstanding claims on 1-4-2009 20000
Premium less reinsurance 460000
Reversionary bonus 60000
Interest and dividend 120000
Tax on interest and dividend 12000
Surrenders 68000
Annuities 40000
Outstanding premium on 1-4-2009 15000
Life assurance fund on 1-4-2009 825000

2011. Prepare Revenue Account.
Particulars Rs
Claims 580000
Premium 970000
a) Further bonus in reduction of premium Rs.10000
b) Claims recovered under re-insurance Rs.20000

From the following information prepare Revenue account of Life Insurance Company Ltd.,
Particulars Rs
Premium 7000000
Commission 9000
Interest and dividends 97000
Income tax thereon 35710
Life assurance fund at the beginning 1520000


Prepare Revenue Account of the Life Insurance Company for the year ended 31.3.2019.
Particulars Rs
Claims by death and maturity 200000
Premiums 900000
Commission 100000
Interest, dividends etc. 100000

Prepare Revenue Account of the Jeevan Life Insurance Company for the year ended
31.3.2018.
Particulars Rs
Balance of fund on 1.4.17 245000
Claims paid 112000
Surrenders adjusted against loans on policies 15000
O/S premium on 1.4.17 5000
O/S claims on 1.4.17 7000
Premium on re-insurance ceded 12000
Claims on re-insurance ceded 7000
Commission paid on direct business 25000
a. O/S claims on 31.3.18 – Rs. 7000
b. O/S premium on 31.3.18 – Rs. 8000

Problem: 11 B.Com V Semester – November 2009, 2012 and 2013 (15 marks)
Share capital (share of Rs.100 each) -- 160000
Bonus on policy holders 31500 --
Claim paid 197000 --
Interest and dividends received -- 112700
Agent’s balance 9300 --
Free hold premises 40000 --
Loan to company policies 173600 --
Cash in hand and on current account 7300 --
Surrenders 7000 --
3346500 3346500
You are required to prepare the company’s Revenue Account for the year ended
31-3-2002 and its balance sheet as on that date after taking the following matters into
consideration:
a. Claim admitted but not paid Rs.9300

b. Management expenses due Rs.200
c. Interest accrued Rs.19300
d. Premium outstanding Rs.12000
e. Commission of reinsurance ceded Rs.5000
f. Bonus utilized in reduction of premium Rs.2000
g. Claims covered/to be recovered under re-insurance Rs.2300

Problem: 12
The following balances have been extracted from the books of Bharath Insurance Company
Ltd., for the year ended 31-12-2001.
Particulars Rs
Amount of life assurance fund at the beginning of the year 1570562
Claims by Maturity 96420
Premium 210572
Commission 36541
Consideration of annuities granted 10620
Interest, dividend and rents 52461
Income tax paid 3060
Surrenders 21768
Annuities 29420
Bonus paid in reduction of premium 3500
Claims admitted but not paid at the end of the year 80034
Capital: Paid up 600000
Premium on deposits 10000
Prepare the Revenue account and balance sheet after taking into account the following:

d. Interest accrued Rs.15400
f. Premium covered under reinsurance Rs.2000
g. Premium recovered under reinsurance Rs.5000

Problem: 13
The following balances were extracted from the books of Mutual Life Assurance Company
as on 31-3-2006.
Debit Rs Credit Rs
Mortgages 1400000 Outstanding claims 22000
Buildings 145000 Premiums 3394000
Loans 155000 Consideration for annuities granted 420000
Investments 1200000 Interest and dividends 100000
Surrenders 25000 Life Assurance Fund (1-4-2005) 900000
Annuities 12000 Premium on deposits 40000
Claims by death 700000 Agents balance 10000
Agent’s balance 5000
Deposits with RBI 30000
Outstanding premises 35000
Commission 54000
Cash at bank 50000
Sundry debtors 63000
Interest accrued but not received 7000
4886000 4886000
You are required to prepare the final account after taking into account the following
adjustments:
1. Premiums outstanding Rs.4500
2. Interest accrued Rs.3700

3. Claims admitted but not paid Rs.3200
4. Surrender claims not paid Rs.1100
5. Further Bonus utilized in reduction of premium Rs.2000
6. Commission on reinsurance ceded Rs.5000
7. Surrenders adjusted against loans on policies Rs.5000


From the following trial balance of Chandaran Life Insurance Company, prepare Revenue
Account for the year ended 31-12-2006.
a. Claims outstanding as at 31-12-2006 Rs.15000
b. Claims to be recoverable/covered from re-insurer Rs.5000
d. Further claims intimated Rs.2500
f. Management expenses due Rs.6000
g. Surrenders adjusted against loan on policies Rs.10000


Life assurance fund on 1-1-2006 -- 1600000
Claims outstanding on 1-1-2006 -- 10000
Mortgage loans 450000 --
Loan on policies 140000 --
Commission 20000 --
Premium deposits -- 30000
Investment fluctuations fund -- 50000
Depreciation on fixed assets 5000 --
Fixed assets 150000 --
Sundry creditors -- 40000
Interest and dividends -- 100000
Surrenders 20000 --
Outstanding premium on 31-12-2006 50000 --
Sundry debtors 25000 --
Income tax deducted on interest 10000 --
Premiums -- 400000
2430000 2430000


Company Limited as on 31-3-2014. Prepare final accounts of Life Insurance.

Interest and dividend received -- 225400
Surrenders 14000 --
Mortgages in India 984400 --
Free hold property/Premises 480000 --
Loan on company policies 347200 --
Bonus to policy holders 63000 --
7093000 7093000
a) Bonus utilized in reduction of premium Rs.4000

b) Claims covered under re-insurance Rs.4600
c) Claims admitted but not paid Rs.18000
d) Premium outstanding Rs.24000
e) Interest accrued Rs.38600
f) Management expenses due rs.400
g) Depreciate premises by 10% p.a.


The following are the balances extracted from the books of the Jeevan Life Insurance
Particulars Rs
Life insurance fund as on 1-4-2005 1470562
Premium 210572
Dividend paid 20000
Fines / penalty 92
Annuities 29420
Stamps on hand 400
Mortgages 309110
Freehold premises 500000
House property 320000
Commission 26541
Interest, dividend and rent 52461
Income tax on interest 3060
Surrenders 21860
Claims admitted but not paid 80034
Prepare final accounts of the company after taking into consideration, the following:
d. Re-insurance premium Rs.6000
f. Managing director is to be paid a commission of 10% on the net increase the life
assurance fund during the year after providing/charging for such commission.


Following is the Trial Balance of Anitha Life Insurance Company as on 31-12-2015
Balance of fund on 1-4-2015 -- 450000
General reserves -- 100000
Borrowings from bank -- 200000
8% Government Bonds 100000 --
Investment on shares of Infosys Company 260000 --
Loans on company policies 360000 --
Premiums 200000 --
Furniture 60000 --
Deposits with SBI 70000 --
Deposits with RBI 130000 --
Current Liabilities -- 250000
Premium less reinsurance -- 520000
Claims by death 85000 --
Claims by maturity 95000 --
Surrenders 25000 --
Interest, dividend etc -- 60000
Tax deducted at source on the above 8000 --
Annuities paid 7000 --
o/s claim on 1-4-2015 -- 10000
o/s premium on 1-4-2015 8000 --

Commission on direct business 40000 --

Commission on reinsurance ceded -- 8000
Commission on reinsurance accepted 6000 --
1978000 1978000
1. Claims covered under reinsurance Rs.15000
2. Surrenders adjusted against loan on policies Rs.8000
3. o/s claims on 31-3-2016 Rs.7000
4. o/s premium on 31-3-2016 Rs.11000
Prepare Revenue Account and Balance sheet as on 31-3-2016


The following balances have been extracted from the books of Bharatha Life Insurance Co.
Ltd. For the year ended 31.3.2018:
Particulars 36541
Life fund at the beginning of the year 1870562
Commission 36541
Interest, Dividend and Rent 52461
Income tax on Interest and dividend 3060
Surrenders 21768
Annuities 29420
Claims admitted but not paid at the end 20034
Paid up capital 600000
Premium deposits 10000
Loans on company policies 300000
Prepare Revenue Account and Balance Sheet after taking into account the following
information:

a. claims covered under re-insurance – Rs. 10000
b. further claims intimated – Rs. 8000
c. further bonus utilized in reduction of premium – Rs.2000
d. surrenders adjusted against loans on policies – Rs. 7000


The following Trail Balance was extracted from the books of Bharath life Assurance
Company Ltd. as on 31-3-2019.
Balance of Life fund on 1-4-2018 -- 2972300
Premium less reinsurance premium -- 161500
Outstanding claims (1-4-2018) -- 7000
Commission 9300 --
Interest, dividend and rents -- 112700
Freehold premises 40000 --
Loans on policies 273600 --
Cash on current account 7300 --
Surrenders 7000 --
Medical fees 7000 --
Annuities 10000 --
3663500 3663500
Prepare the Revenue Account and a Balance Sheet of the company after taking into account
following adjustments:

a. Claims outstanding Rs. 20000.
b. Further bonus in reduction of premium Rs. 15000.
c. Premium outstanding Rs. 5000.
d. Claims covered under re-insurance Rs. 100000.
e. Management expenses due Rs. 40000.

B.Com V Semester –Advanced Financial Accounting (CBCS Syllabus) 2021-2022
1
Batch
CHAPTER-4
FINAL ACCOUNTS OF GENERAL INSURANCE
COMPANIES

From the following particulars, prepare the Fire Revenue Account for the year ending 31-3-
2013.
Particulars Rs
Claims paid 235000
Legal expenses regarding claims 5000
Re-insurance premium 60000
Commission 100000
Provision against unexpired risk (1-4-2012) 260000
Claims unpaid (1-4-2012) 20000
Claims unpaid (31-3-2013) 35000

2
Batch

From the following particulars prepare Fire revenue account for the year 2016
Particulars Rs
Claims paid 735000
Commission 250000
Provision against unexpired risk (1-1-2016) 860000
Claims unpaid (1-1-2016) 75000
Claims unpaid (31-12-2016) 35000
Premium o/s on (31-12-2017) 45000

From the following particulars, prepare fire revenue account for the year ending 31-3-2007.
Particulars Rs
Claims paid 100000
Commission 120000
Provision for unexpired risk 260000
Make provision for unexpired risk at 50% Additional risk is to be maintained at Rs.54000

3
Batch
From the following particulars, prepare fire revenue account for the year ending 31-3-2007.
Particulars Rs
Claims paid 100000
Commission 120000
Provision for unexpired risk 260000
Make provision for unexpired risk at 50% Additional risk is to be maintained at Rs.54000

From the following balances of ABC Insurance Company prepare fire revenue account.
Particulars Rs
Claims paid and outstanding 360000
Additional reserve on 1-4-2009 100000
Sundry expenses regarding claims 20000
Bad debts 10000
Fund on 1-4-2009 500000
Commission on re-insurance ceded 20000
Interest, dividend etc received 20000
Difference in exchange (Cr) 1000
Premium less re-insurance 1200000
Commission on direct business 40000
Additional reserve is to be raised by 5% of net premium in addition to usual reserve. ABC
Insurance Company closes its books of accounts on 31st March 2010.
From the following particulars prepare Fire Revenue account for the year ending 31-3-2011.

4
Batch
Particulars Rs
Claims paid 490000
Commission 210000
Provision for unexpired risk on 1-4-2010 600000
Claims unpaid 1-4-2010 40000
Claims unpaid on 31-3-2011 70000
Make provision for unexpired risk at the end of the year at 50% .of net premium Additional
reserves is to be maintained at 10% of the net premium

From the following particulars prepare Fire Revenue account for the year ending 31-3-2019.
Particulars Rs
Claims paid 240000
Commission 100000
Provision for unexpired risk on 1-4-2018 260000
Claims unpaid 1-4-2018 20000
Claims unpaid on 31-3-2019 35000

From the following prepare fire revenue account for the year ended 31-3-2016.
Particulars Rs

5
Batch
Premium 425000
Claims paid 320000
Commission on reinsurance ceded 5000
o/s premiums on 1-4-2015 6000
Reserve for unexpired risk on 1-4-2015 190000
Reinsurance premiums 25000
Commission on direct business 25000
Interest, dividend etc received 24000
o/s claims on 1-4-2015 7000
a. O/S claims on 31-3-2016 Rs.8000
b. Claims covered under reinsurance Rs.20000
c. O/S premiums on 13-3-2016 Rs.7000

From the following information prepare Marine Revenue A/C of XYZ General Insurance Co.
for the year ending 31-3-2018:

6
Batch
Particulars Rs
Reserve for unexpired risk on 1.4.17 90000
Liability in respect of o/s claim on 1.4.17 10000
Medical expenses relating to claims 500
Claims paid 70000
Commission paid 27000
Commission on re-insurance ceded 5000
Interest and dividend less tax 10000
Profit on sale of investment 1000

From the following balances of Oriental Insurance Company Ltd., as on 31-3-2015, Prepare:
Fire and marine Revenue account and profit and loss account.
7
Batch
Particulars Rs Fire Marine

Bad debts 10000 24000
Reserve as on 1-4-2014 500000 1640000
Claims paid 380000 760000
Commission paid 180000 216000
Additional reserves as on 1-4-2014 100000 --
Premium less reinsurance 1200000 2160000
Management expenses 290000 800000
Commission on reinsurance ceded 60000 120000
Auditors fees 6000
Directors fees 6400
Share transfer fees 1600
Bad debts recovered 2400
Depreciation 70000
Interest and dividend received 28000
Difference in exchange (Cr) 600
Miscellaneous receipts 10000
Profit on sale of land 120000
In addition to the usual reserve, an additional reserve in case of fire insurance is to be
increased by 5% of net premium and also maintain 10% as additional risk in case of marine
insurance***.
Problem: 11 B.Com V Semester – November/December 2013 (15 marks)

The following balances are extracted from the books of National General Insurance Company
as on 31-3-2012. Prepare Revenue account and profit and loss account.

8
Batch

Claims paid -- 2000000 1740000
Premium less reinsurance -- 7480000 5940000
Commission on reinsurance ceded -- 260000 --
Commission paid -- 1240000 1020000
Management expenses -- 1720000 1360000
Reserve as on 1-4-11 -- 4200000 4800000
Additional reserve as on 1-4-11 -- 1200000 200000
Claims outstanding on 1-4-11 -- 480000 220000
Premiums outstanding on 1-4-11 -- 520000 340000
Depreciation on assets 720000 -- --
Loss on sale of investments 160000 -- --
Audit fees 260000 -- --
Directors fees 720000 -- --
Interest and dividend on investment 1260000 -- --
Following further information given:
1. Premiums outstanding on 31-3-12: Fire Rs.600000, Marine Rs.300000
2. Claims outstanding on 31-3-12: Fire Rs.920000, Marine Rs.340000
3. Out of the above , fire claims Rs.110000 was recovered by reinsurance
4. Reserve for unexpired risks to be maintained at 50% and 100% of net premium of
fire and marine insurance respectively
5. Additional reserve for fire to be kept at 20% of net premium
6. Interest accrued on investment Rs.130000
Problem: 12 B.Com V Semester – November/December 2014 (15 marks)


9
Batch

Claims paid -- 1000000 870000
Premium -- 3740000 2970000
Commission -- 620000 510000
Reserve as on 1-4-13 -- 2100000 2400000
Additional reserve as on 1-4-13 -- 600000 100000
Claims outstanding on 1-4-13 -- 240000 110000
Premiums outstanding on 1-4-13 -- 260000 170000
Audit fees 130000 -- --
Directors remuneration 360000 -- --
Interest and dividend 630000 -- --

1. Premiums outstanding on 31-3-14: Fire Rs.330000, Marine Rs.150000
2. Claims outstanding on 31-3-14: Fire Rs.460000, Marine Rs.170000
3. Out of the above , fire claims Rs.110000 was recovered by reinsurance
4. Reserve for unexpired risks to be maintained at 50% and 100% of net premium of
fire and marine insurance respectively
6. Interest accrued on investment Rs.13000.

The following balances are extracted from the books of Dhanush General Insurance
Company as on 31-3-2010. Prepare Revenue account and profit and loss account

10
Batch

Commission on reinsurance ceded 25000 10000
Reserve as on 1-4-09 420000 480000
Additional reserve as on 1-4-09 120000 --
Claims outstanding on 1-4-09 50000 25000
Premium outstanding on 1-4-09 40000 30000
Bad debts 25000 35000
Loss on sale of assets 16000 -- --
Audit fees 25000 -- --
Interest and dividends received 125000 -- --
a. Premium o/s on 31-3-2010: Fire Rs.50000 and Marine Rs.30000
b. Claims o/s on 31-3-2010: Fire Rs.90000 and Marine Rs.35000
c. In addition to usual reserves additional reserves in case of fire insurance is to be

increased by 5% of net premium.

From the following information prepare Fire revenue account, Marine revenue account and
profit and loss account of XYZ General Insurance Company for the year ending 31-3-2016.

11
Batch
Particulars Rs. Fire Marine

Bad debts 10000 24000
Reserve as on 1-4-2015 500000 860000
Commission on direct business 160000 180000
Commission in reinsurance ceded 20000 10000
Commission on reinsurance accepted 15000 20000
o/s claims on 1-4-2015 10000 10000
Share transfer fees 1000 -- --
Bad debts recovered 3000 -- --
Depreciation 40000 -- --
Interest and dividend received 60000 -- --
Difference in exchange (Cr) 5000 -- --
Miscellaneous receipts 2000 -- --
Profit on sale of land 110000 -- --
a. Claims covered under reinsurance : Fire Rs.20000 and Marine Rs.60000
b. O/S claims: Fire Rs.5000 and Marine Rs.8000
c. O/S premiums: Fire Rs.8000 and Marine Rs.10000

as on 31-3-2012. Prepare Revenue account and profit and loss account

12
Batch

Provision for unexpired reserves on 1-4-2011 200000 175000
Additional reserve 1-4-2011 160000 --
Bad debts 24000 40000
Commission on re-insurance ceded 42000 60000
Premium received 968000 1920000
Legal expenses on claims 6000 --
Survey expenses on claims -- 12000
Expenses or income not related to any business or general expenses and incomes.
Audit fees 2400
Director fee 10000
Establishment expenses 110000
General manager salary 80000
Depreciation on property 20000
Interest and dividend etc. 228000
Income tax on the above 22800
Miscellaneous income 19800
10% Government bonds 1000000
a. Claims due but not paid on 31-3-2012: Fire Rs.20000, Marine Rs.25000
b. Maintain reserve for unexpired risk at 50% for fire and 100% for marine.
c. Additional reserve in case of fire insurance is to be increased by 5%.
d. Interest on investment (Government bonds) is accrued.
The following balances extracted from the books of Dhanush General insurance company as
on 31-3-2017. Prepare revenue account and profit and loss account.

13
Batch

Claims paid 1540000 1280000
Commission on reinsurance ceded 115000 --
Reserve as on 1-4-16 2800000 2860000
Additional reserve as on 1-4-16 500000 320000
Claims outstanding on 1-4-016 360000 220000
Premium outstanding on 1-4-16 265000 130000
Loss on sale of assets 130000 -- --
Audit fees 180000 -- --
Interest and dividends received 870000 -- --
a. Premium o/s on 31-3-2017: Fire Rs.730000 and Marine Rs.410000
b. Claims o/s on 31-3-2017: Fire Rs.690000 and Marine Rs.37000
c. In addition to usual reserves additional reserves in case of fire insurance is to be at

10% of net premium.
Prepare revenue account and profit and loss account for the year ending 31-3-2017.


14
Batch

Claims paid -- 180000 175000
Premium less reinsurance -- 5480000 456000
Commission paid -- 64000 37000
Commission on reinsurance ceded -- 11000 8000
Reserve for unexpired risk as on 1-4-17 -- 120000 160000
Claims outstanding on 1-4-17 -- 12000 --
Premiums outstanding on 1-4-17 -- -- 12000
Interest and dividend on investment 89000 -- --
1. Premiums outstanding on Fire - Rs.12000 and Marine - Rs.7000
2. Claims outstanding on Fire - Rs.7000 and Marine - Rs.12000
3. Re-insurance claims on fire Rs. 12500
4. Interest accrued on investment Rs.17500
5. Reserve for unexpired risk: Fire 50% and Marine 100% of Net premium for the year.
Problem: 18 B.Com V Semester – October / November 2019 (15 marks)

The following balances are extracted from the books of Ranju General Insurance Company
15
Batch

Claims paid -- 160000 90000
Premium -- 420000 300000
Commission -- 84000 62000
Expenses of Management -- 100000 75000
Reserve for unexpired risk 1.4.18 -- 260000 290000
Additional reserve 1.4.18 -- 70000 20000
Claims outstanding on 1.4.18 -- 30000 12000
Premiums outstanding on 1.4.18 -- 36000 22000
Loss on realization of investments 12000 -- --
Directors remuneration 48000 -- --
Interest and dividend 82000 -- --

1. Premiums outstanding on 31.3.19: Fire Rs.45000, Marine Rs.28000
2. Claims outstanding on 31.3.19: Fire Rs.42000, Marine Rs.18000
3. Out of the above , fire claims Rs.19000 was recovered by re-insurance
4. Reserve for unexpired risks to be maintained at 50% of Fire and 100% for Marine on
net premium.
6. Interest accrued on investment Rs.20000.

CHAPTER – 5
FINAL ACCOUNTS OF HOTEL INDUSTRY
Problem 1:Mr. Amar checks in to a Five Star Hotel on 10th January, 2018 t 9 a.m. on
American plan at Rs. 300 per day. The Hotel also levies a service tax of 12% in
addition to the room rent. Find the duration of stay and the amount payable by Mr.
Amar if he checks out at:
a. 6 p.m. on 10th January 2018
b. 8 a.m. on 11th January 2018
c. 4 p.m. on 11th January 2018
d. 11 a.m. on 12th January 2018
When the duration of day is ascertained by the hotel on 24 hours or part there of
basis
Problem 2:Mr.Amar checks in to a Five Star Hotel on 10th January, 2018 t 9 a.m. on
American plan at Rs. 300 per day. The Hotel also levies a service tax of 12% in
addition to the room rent. Find the duration of stay and the amount payable by Mr.
Amar if he checks out at:
e. 6 p.m. on 10th January 2018
f. 8 a.m. on 11th January 2018
g. 4 p.m. on 11th January 2018
h. 11 a.m. on 12th January 2018
When the duration of day is ascertained by the hotel on fixed check-out time of ’12
noon’ basis
Problem 3: Check out time in the hotel is 9 am. Mr. X checks in at 3 pm on 21-9-2018
at Rs. 1500 per day plus service charge at 10%. Calculate the amount payable in
following cases:
a. If he checks out at 7 am on 22-9-2018
b. If he checks out at 9 am on 22-9-2018
c. If he checks out at 3 pm on 23-9-2018
d. If he checks out at 8 am on 23-9-2018

Problem 4:Mr.Kavi arrives in New Delhi and occupies a room in a Five Star Hotel at 10
am. On 11th October 2017 on European plan at Rs. 380 for a stay of every 24 hours or
a part thereof. Calculate the amount payable by Mr.Kavi in the following
circumstances assuming that service charge is also payable at 10% in addition to
room rate:
a. If Mr.Kavi Checks out at 5 pm on 11 th October 2017 itself
b. If Mr.Kavi Checks out at 9 am on 12 th October 2017
c. If Mr.Kavi Checks out at 2 pm on 12 th October 2017
d. If Mr.Kavi Checks out at 10 am on 13 th October 2017
The check out time of a hotel is 9 am. In that hotel Mr. Nayaran checks in at 3pm on
21-10-2017 at Rs. 800 per day plus service charge at 15%. Calculate the amount
payable by Mr. Narayan in each of the following cases:
a. If he checks out at 7 am on 22-10-2018
b. If he checks out at 3 pm on 23-10-2018
c. If he checks out at 8 am on 23-10-2018
Problem 6: Mr. Rahul occupies a room in a way side hotel at 2 pm on 11 th October
1999 at Rs. 300 for every night spent plus 10% service charges. Calculate the amount
payable by Mr. Rahul in the following circumstances assuming that the dinner time
starts 9 pm.
a. If Mr. Rahul Checks out at 7 pm on 11 th October 1999 itself
b. If Mr. Rahul Checks out at 8 am on 12 th October 1999 itself
c. If Mr. Rahul Checks out at 9 pm on 12 th October 1999 itself
d. If Mr. Rahul Checks out at 8 am on 13 th October 1999 itself

𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒓𝒐𝒐𝒎𝒔 𝒐𝒄𝒄𝒖𝒑𝒊𝒆𝒅

Occupancy Rate = 𝑿 𝟏𝟎𝟎
𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒍𝒆𝒕𝒕𝒂𝒃𝒍𝒆 𝒓𝒐𝒐𝒎𝒔
𝑻𝒐𝒕𝒂𝒍 𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝑮𝒖𝒆𝒔𝒕𝒔−𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒓𝒐𝒐𝒎𝒔 𝒐𝒄𝒄𝒖𝒑𝒊𝒆𝒅

Double Occupancy Rate =
𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒓𝒐𝒐𝒎𝒔 𝒐𝒄𝒄𝒖𝒑𝒊𝒆𝒅
𝑿 𝟏𝟎𝟎
𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒃𝒆𝒅𝒔 𝒐𝒄𝒄𝒖𝒑𝒊𝒆𝒅

Bed Occupancy Rate = 𝑿 𝟏𝟎𝟎
𝒏𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒍𝒆𝒕𝒕𝒂𝒃𝒍𝒆 𝒃𝒆𝒅𝒔
Room Rent =
𝑬𝒔𝒕𝒊𝒎𝒂𝒕𝒆𝒅 𝒄𝒐𝒔𝒕 𝒇𝒐𝒓 𝒂 𝒈𝒊𝒗𝒆𝒏 𝒑𝒆𝒓𝒊𝒐𝒅+𝑬𝒙𝒑𝒆𝒄𝒕𝒆𝒅 𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒓 𝑷𝒓𝒐𝒇𝒊𝒕𝒔

𝑵𝒖𝒎𝒃𝒆𝒓 𝒐𝒇 𝒓𝒐𝒐𝒎𝒔 𝒂𝒗𝒂𝒊𝒍𝒂𝒃𝒍𝒆 𝒕𝒐 𝒃𝒆 𝒍𝒆𝒕 𝒐𝒖𝒕 𝒇𝒐𝒓 𝒕𝒉𝒆 𝒈𝒊𝒗𝒆𝒏 𝒑𝒆𝒓𝒊𝒐𝒅𝑿𝒐𝒄𝒄𝒖𝒑𝒂𝒏𝒄𝒚 𝒓𝒂𝒕𝒆

Problem 1 = Occupancy rate

A hotel in Mumbai has 432 rooms in total of which 38 rooms are used by the hotel for
its operations and 14 rooms are used by the staff of the hotel. On 2 nd January, 2018,
323 rooms were occupied by customers. Find the Occupancy rate?
Problem 2 = Occupancy rate
A hotel has 179 rooms in all, out of which 15 rooms are used for operational purpose
and 4 rooms are occupied by the general manager and the departmental managers.
136 rooms are occupied by the guests on 24 th October 2018. Calculate the room
occupancy rate for the day?
Problem 3= Occupancy rate
The check-out time of a hotel is 11 am. On 4 th July 1999, the Visitors ledger of the
hotel shows that immediately after 11 am there are 93 rooms in which guests are
staying. Till 11 am on 5th July 1999, guests from 23 rooms’ check-out, while 27 rooms’
new guests check in. calculate occupancy of rooms for 4 th July 1999.
Problem 4 = Double Occupancy rate
A hotel in Kolkata has 120 single bed rooms and 180 doubled bed rooms available for
letting. On 26th January 2018, 260 rooms were occupied by 416 guests. Calculate
double occupancy rate
Problem 5 = double Occupancy rate
A hotel in Mysore has 200 lettable rooms. The hotel has single bed rooms as well as
double bed rooms. On 15th October 1999, 180 rooms were occupied by 240 guests.
Calculate the double occupancy rate for 15 th October 1999.
Problem 6 = Bed Occupancy rate
A hotel in Chennai has 80 single bed rooms, 120 double bed rooms and 3 dormitories
having 9 beds each. On 1-1-2018, 60 single bed rooms, 90 double bed rooms and 1
dormitory were occupied by guests. Calculate the bed occupancy rate.

Problem 7 = Bed Occupancy rate

In a five star hotel at Ooty, there are 200 lettable rooms out of which, there are 70
single bed rooms and 130 double bed rooms. On 26th December, 1983 63 single bed
rooms and 109 double bed rooms were occupied by the guests. You are required to
calculate the bed occupancy rate per day.
Problem 8: Calculate the rent to be charged per day per room from the following
information, for a 3 Star Hotel at Ooty, if occupancy rate is:
a. 100%
b. 80%
• Number of rooms available for occupancy = 25
• Estimated total cost for April 2017 = Rs. 600000
• Return expected = 50% on cost
Problem 9: From the following particulars pertaining to four rooms in a hotel, draw
up suitable columnar ledger:
1. Room Rent for each room = Rs. 500 + 15% Tax
2. Room 1: Breakfast Rs. 45; laundry Rs. 50; Local phone Calls Rs. 15
3. Room 2: Lunch Rs. 85; STD calls Rs. 125; Wine Rs. 60; Previous day’s amount
outstanding Rs. 1250
4. Room 3: Private taxi hired from hotel Rs. 400; STD calls Rs. 350; Dinner Rs.
125; Whiskey Rs. 100; Deposited Rs. 3500 with the hotel
5. Room 4: Opening due from guest Rs. 575; laundry Rs. 30; lunch Rs. 120
The guest in Room 3 is a regular visitor and is entitled to a discount of 20% on room
rent. All the foregoing transactions pertain to a single day.

Problem 1: A caterer presents the following trail balance of the books of his restaurant as on
31-3-2018
Capital --- 100000
Bad debts recovered --- 100
Banqueting debtors 4000 ---
Repairs and replacements 1000 ---
Sales --- 120000
Provision for discount 200 ---
Furniture 6000 ---
Purchases returns --- 500
Postage and telephone 800 ---
Purchases 60000 ---
Wages and salaries 29500 ---
Provision for bad debts --- 300
Drawings 2500 ---
Creditors --- 6000
Stock 2000
Cash at bank 21600
Premises 90000
Gas and electricity 6800
Bad debts 500
China cutlery and linen 2000
226900 226900
Prepare trading and profit and loss account of the restaurant for the year ending 31-3-2018
and balance sheet as on that date after considering the following additional information:
a. Stock on 31-3-2018 Rs. 2200
b. Invoice for advertising Rs. 350 was due for payment, but has not been included in the
account
c. Estimated cost of staff meals Rs. 500
d. Two purchase invoices amounting to Rs. 1000 had not been entered in the books
e. Provision for bad debts should be made equal to 5% on debtors
f. It is estimated that cash discount on creditors will amount to 3% of total creditors

g. Caterer estimated that Rs. 3000 included in purchases represents private

consumption by himself and his family.
Problem 2: The following are the balances of Hotel Nanjundeshwara on 31-12-2018

Particulars Amount Particulars Amount
Capital 150000 Purchases:
Freehold premises 100000 Provision and stores 10000
China Glass and Plates 10000 Liquors 15000
Furniture and Fixtures 25000 Cigarettes 1000
Drawings 2500 Coal 5000
Wages and salaries 40000 Sales:
Rates and insurance 12500 Food items 40000
Laundry charges 4000 Beverages 10000
Linen and beddings 10000 Liquors 25000
Electricity Light 6500 Cigarettes 1500
General expenses 6000 Rent from rooms 100000
Visitors account 5000 Repairs and renewals of premises 10000
Sundry creditors 7500 Depreciation:
Stock on 1-1-2017: On premises 10000
Liquors 20000 On furniture 2500
Cigarettes 500 Glass and plates 1000
Provision and stores 4000 Linen and beddings 1500
Coal 1000 Cash in hand 5000
Cash at bank 26000
Stock on 31-12-2018:
Provisions and stores Rs. 5000
Liquors Rs. 7500
Cigarettes Rs. 250
Coal Rs. 1500

A sum of Rs. 5000 representing accommodation and Rs. 4000 representing meals is to
be charged to the proprietor.
Insurance paid in advance Rs. 500. Outstanding salaries Rs. 2500
From the above prepare the final accounts of the hotel for the ended 31-12-2017
Problem 3: The following trail balance was extracted from the books of a restaurant after the
compilation of the trading account for the year ended 31-3-2018:
Trading account -- 99500
Stock 3150 --
Kitchen equipment 14600 --
Drawings 7500 --
Postage and telegram 2450 --
Wages and salaries 36010 --
Insurance 2650 --
Creditors -- 8000
Restaurant furniture 8000 --
Printing and stationary 3210 --
China and cutlery 5200 --
Debtors 2100 --
Advertising 7430 --
Discount received -- 290
Fuel and light 7420 --
Repairs and renewals 4850 --
Bad debts 990 --
Rates 5900 --
Leasehold premises 120000 --
Capital -- 142000
Provision for discount received 150 ---
249790 249790
Prepare profit and loss account of the Restaurant for the year ended 31-3-2018 and the
balance sheet as on that date after taking into accounting the following additional
information:
a. Provide depreciation for:
• Leasehold premises Rs. 6000
• Kitchen Equipment’s at 10%
• Restaurant furniture at 12%
• China and Cutlery were revalued at Rs. 4400
b. Additional bad debts Rs. 100
c. Make provision for:
• Outstanding advertising Rs. 250

• Outstanding audit fees Rs. 350
• Outstanding stationary Rs. 120
• Bad debts 2%
d. Increase the provision for discount received to 3% of creditors
e. Rates paid in advance Rs. 200
Problem 4: Following is the trail balance of Krishna hotel as on 31-3-2018. Prepare final
accounts
Income from lodging department -- 92000
Income from restaurant department -- 64000
Provision purchases 31000 --
Stock of provisions on 1-4-2018 2040 --
Cash in hand and at bank 20000 --
Capital -- 440000
Customers debit balance 1600 --
Supplier’s Account -- 19600
Buildings (1/10th is used for restaurant department) 420000 --
Provision for depreciation on buildings -- 48000
Furniture and equipment’s 120000 --
General expenses 54820 --
Interest -- 2260
Income tax 800 --
Life insurance premium 3200 --
Wages 12000 --
665860 665860
a. The servants in the Lodging Department had occupied a room for which rent is Rs. 240
and tool meals worth Rs. 120. Similarly servants in the restaurant Department had
occupied a room worth Rs. 300 and took meals worth Rs. 180

b. Wages are charged in proportion of ½ to the lodging department and ¼ to the

restaurant and remaining to the general profit and loss account
c. A sum of Rs. 1600 representing, accommodation of Rs. 480 and meals of Rs. 1120 to be
charged to the proprietor of the hotel
d. Increase the provision for depreciation on buildings to Rs. 60000
Problem 5: Following is the trail balance of AP Hotel as on 31-3-2018. Prepare final accounts
Purchases: --
Liquors 54500 --
Provisions 65800 --
Proprietors Capital -- 225000
Sales: --
Liquors -- 62630
Provisions -- 78620
Apartment rent -- 83430
Miscellaneous incomes -- 10355
Bank loan -- 200000
Buildings 280000 --
Furniture and fittings 57830 --
Creditors -- 64900
Interest on bank loan 7500 --
Wages and salary 60940 --
Hotel expenses and establishment 36230 --
Repairs 2080 --
Stock on 1-4-2018: --
Liquors 41280 --
Provisions 13200 --

Cash 31240 --
Book Debts 23645 --
724935 724935
1. Stock on 31-3-2016: liquors Rs. 25200 and provisions Rs. 2600
2. Depreciation on buildings by 2% and furniture and fittings by 5%
3. Wages unpaid Rs. 1111
4. o/s interest on bank loan Rs. 6500

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B.

Com V Semester – Advanced financial Accounting (CBCS Syllabus) 2020-2021 1

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 2 B.Com V Semester – December 2016 (15 marks)

and its subsidiary S Ltd., as on 31-12-2015 was as follows:

Liabilities H Ltd S ltd

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 3 B.Com V Semester - November 2017 (15 Marks)

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 5 B.Com V Semester – December 2015 (15 Marks)

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 6 Profits during the year transferred to reserves

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 8 B.Com V Semester – November 2017 (15 Marks)

Liabilities P Ltd., Q Ltd., Assets P Ltd., Q Ltd.,

Share capital: Goodwill 90000 --

shares of Buildings 160000 165000

Rs.100 each 500000 300000 Plant and Machinery 140000 130000

General Reserves 120000 -- Stock 40000 80000

Profit and Loss A/c 30000 -- Sundry debtors 70000 1200000

8% Debentures 100000 200000 8% Debentures in Q Ltd 100000 --

Sundry Creditors 35000 25000 2000 shares in Q Ltd 180000 --

Bills payable 15000 10000 Bank 20000 10000

Profit and loss account -- 30000

800000 535000 800000 535000

Limited showed a debit balance of Rs. 90000 on 31-3-2016.

Buildings of Q Limited was overvalued by Rs. 20000.

Prepare a consolidated balance sheet.

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 9 B.Com V Semester – November 2016 (15 Marks)

Liabilities X Ltd Y Ltd Assets X Ltd Y Ltd

Shares of Rs.100 each 400000 200000 Fixed assets 260000 120000

Capital reserves 40000 -- Investments:

General Reserves 40000 -- In shares of Y Ltd 140000 --

Profit and Loss A/c 40000 -- Stock 80000 40000

Sundry Creditors 40000 20000 Debtors 70000 30000

Cash 10000 5000

Profit and loss account -- 25000

560000 220000 560000 220000

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 10 B.Com V Semester – November 2012 & 2014 (15 Marks)

Liabilities Sun Moon Assets Sun Moon

Share capital: Goodwill 6000 --

shares of Rs.100 each 60000 30000 Buildings 25000 1300

General Reserves 20000 -- Plant and Machinery 19000 8500

Profit and Loss A/c 10000 -- Stock 9500 5500

9% Debentures -- 12000 Sundry debtors 7000 3000

Sundry Creditors 6500 4000 9% Debentures in Moon

Bills payable 1500 Ltd at par 9000 --

2000 shares in Moon Ltd 16000 --

Bank 5000 3500

Profit and loss account -- 14000

96500 47500 96500 47500

ANIL KUMAR. ASST. PROFESSOR VVFGC. TUMKUR. PH NO: 8123999289

Problem: 11 B.Com V Semester – November 2012 & 2014 (15 Marks)

Liabilities H Ltd S Ltd Assets H Ltd S Ltd

Shares of Rs.10 each 500000 100000 Fixed assets 245500 23000