LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP
SUPPLEMENTARY EXAMINATION – JUNE 2009
BC 4502 - COMPANY ACCOUNTS
Date & Time: 27/06/2009 / 10:00 - 1:00 Dept. No.
Max. : 100 Marks
PART A
Answer ALL questions:
Marks:10x2=20
Explain the following:
1. Forfeited shares Account
2. Profit prior to Incorporation
3. Cash from investing activities
4. Capital redemption reserve
5. Contingent liability
6. Equity share capital of S Ltd stood at Rs.2 lakhs in shares of Rs.10 each. The Company subdivided the
shares into shares of Rs.2 each. Subsequently 90% of the shares were surrendered to the company.
Journalize.
7. R Ltd issued 1000 6% debentures of Rs.100 each at10% discount, redeemable at a premium of 5%.
Journalize.
8. X Ltd forfeited 100 equity shares of Rs.10 each, issued at a discount of Re.1, for failure to pay the final call
of Rs.2. Pass the forfeiture entry.
9. A Ltd issued 10,000 equity shares of Rs.10 each, 80% of issue was underwritten by M for a commission of
2%. Application were received from the public for 9,000 shares. Determine the liability of X and the
commission payable to him.
10. A Ltd had Rs.50,000 in securities premium account, Rs.30,000 in Capital Redemption Reserve and Rs.2
lakhs in General Reserve. The share capital of the company consisted of 50,000 equity shares of Rs.10 each.
The company decided to issue bonus shares in the ratio of 2 shares for every 5 held using revenue reserves
to the minimum extent. Journalize.
PART B
Answer ANY FIVE questions
Marks:5x8=40
11. What do you mean by Securities Premium Account? State the purposes for which it can be used.
12. List out the preferential creditors at the time of liquidation of a company.
13. A Ltd issued 1000 12% Debentures of Rs.100 each at par on 1.1.2007. Expenses of issue amounted to
Rs.1,500. Interest is payable half-yearly on 30th June and 31st December.
In 2008 the company redeemed debenture as follows:
On 1.8.2008, 50 debentures at Rs.97 ex interest
On 1.11.2008, 100 debentures at Rs.99 cum interest.
Show the entries for the year 2007 and 2008, assuming books are closed on 31st December 2008.
14. A firm which was carrying on business from 1st January, 2008 gets itself incorporated as a company on 1st
May 2008. The first accounts are drawn upto 30th September 2008. The gross profit for the period is
Rs.56,000. The general expenses are Rs.14,220; directors’ fees Rs.9,000 per annum, formation expenses
Rs.1,500. Rent upto 30th June was Rs.1,200 per annum, after which it was increased to Rs.3000 per annum.
Salary of the manager, who, upon incorporation of the company was made a director, was Rs.6,000 per
annum. His remuneration thereafter was included in the above figure of fees to directors.
Ascertain the profit for the pre and post incorporation period. The net sales were Rs.8,20,000, the monthly
average of which for he first four months of 2008 being one half of that of the remaining period.
15.
The following underwriting took place:
X – 10,000 shares; Y – 6,000 shares; Z – 4,000 shares.
In addition there was firm underwriting:
X– 1,000 shares; Y – 500 shres; Z – 1,500 shares.
The share issue was for 20,000 shares. Total subscription including firm underwriting was 18,000 shares and
the forms included the following marked forms:
X – 3,000 shares; Y – 2,000 shares; Z – 3,000 shares.
1
Show the allocation of liability of the underwriters assuming that shares underwritten firm are treated as
unmarked.
16.
X Ltd issued for public subscription 20,000 shares of Rs.10 each at a premium of Rs.2 per share payable
as under:
Rs.2 per share on application;
Rs.5 per share on allotment (including premium)
Rs.5 per share on first and final call
Applications for 30,000 shares were received. Allotment was made pro-rata to the applicants for 24,000
shares, the remaining applications being rejected. Money over paid was used towards allotment.
800 shares failed to pay the allotment and the call money and the shares were forfeited.
These shares were subsequently reissued at Rs.10 fully paid.
Give journal entries to record the above transactions.
17. The Balance Sheet of ABC Ltd on 31/12/2004 and 31/12/2005 are as follows:
2004
2005
2004
Equity Capital (Rs.10)
100,000
200,000
Machinery
120,000
P/L A/c
30,000
50,000
Furniture
30,000
12% Debenture
100,000
Stock
50,000
10% ICICI bank loan
- 150,000
Debtors
30,000
Creditors
20,000
25,000
Cash
10,000
Tax provision
40,000
60,000
Bank
50,000
290,000
485,000
290,000
2005
260,000
40,000
40,000
60,000
5,000
80,000
485,000
(a) Machinery worth Rs.50,000 were purchased and paid for by the issue of equity shares.
(c) Depreciation provided on machinery Rs.30000 and on furniture Rs.5000.
(d) During the year 2005, Income tax Rs.50,000 and interim dividend Rs.8,000 were paid.
Prepare Cash Flow statement.
18.
State the provisions of the Company’s Act relating to the redemption of Preference Shares.
PART C
Answer ANY TWO questions:
Marks:2x20=40
19. The Balance sheet of Suraj Ltd. as on 31.12.1997 was as under:
Liabilities
Rs.
Assets
Share Capital:
Fixed Assets
Issued and full paid:
Investments
5,000 6% redeemable
Cash at bank
Preference shares of Rs.10
Other current assets
each fully paid.
50,000
6,000 equity shares of
Rs.10 each fully paid
60,000
Securities Premium
20,000
General Reserve
40,000
Profit& Loss A/c
5,000
Sundry Creditors
25,000
2,00,000
Rs.
1,00,000
20,000
18,000
62,000
_______
2,00,000
The company passed the following resolutions on 1st Jan. 1998
i)
To redeem the entire preference share capital at a premium of 10%
ii)
To issue 2,000 equity shares of Rs.10 each at a premium of Rs 2 per share, which has been fully
subscribed.
iii)
To sell the investments at Rs.15,000
iv)
To issue bonus shares as fully paid in the ratio of 1 share for every 2 held, to the existing shareholders
including the fresh issue.
Draft the journal entries and prepare the balance sheet as on 1st Jan. 1998.
20. B Ltd. had an authorized capital of Rs.6 lakhs divided into equity shares of Rs.10 each. The following is the
Trial Balance of the company as on 31.3.2006.
Rs.
Rs.
Advance tax paid
7,500
8% debentures
2,00,000
Building
4,00,000
P & L (.1.4.05)
24,500
Machinery
2,60,000
Creditors
40,000
Interim dividend paid
7,500
General reserve
23,000
2
Purchases
Bad debts
10% bonds
Stock (1.4.05)
Debtors
Cash
Bank
Calls in arrears
Salaries
Rent
Sundry expenses
Debenture interest
2,08,840
Share capital
5,60,000
2,000
Bills payable
33,000
50,000
Sales
4,18,500
70,000
Interest on bonds
5,000
1,09,000
26,060
30,900
14,000
62,200
30,000
10,000
16,000
------------------------Total
13,06,000
13,06,000
Prepare final accounts for the year ending 31.3.06 after considering the following adjustments:
i)
Depreciate machinery by 10% and building by 5%.
ii)
Provide for income tax Rs.30,000
iii)
Transfer Rs.15,000 to general reserve.
iv)
Stock on 31.3.06 was Rs.1,25,000
v)
Directors propose 10% final dividend on equity shares.
21. Balance sheet of M Ltd., on 31.3.2006 stood as follows:
Liabilities
Rs.
Assets
Share capital:
Land and building
5,000 equity shares of Rs.100 each
Machinery
Rs.60 paid up.
3,00,000
Stock
5,000 equity shares of Rs.100 each
Debtors
Rs.50 paid up.
2,50,000
P&L
12% preference shares of Rs.100
each fully paid.
10,00,000
15% debentures
4,00,000
Preferential creditors
1,05,000
Unsecured creditors
10,45,000
31,00,000
Rs.
3,86,000
8,21,000
1,84,000
13,37,000
3,72,000
31,00,000
Preference dividend is in arrears for 2 years and are payable on liquidation.
Assets realized as follows
Land and building Rs.9,84,000; Stock Rs.1,63,000
Machinery Rs.7,12,000 and Debtors Rs.11,91,000
Liquidation expenses was Rs.65,500
Liquidator is entitled to a commission of 3% on assets realized and 2% on payments to unsecured creditors.
All payments are made on 30.9.2006.
Prepare Liquidator’s final statement of account.
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