14N/152
CLASS: B.Com. C.A.
St. JOSEPH’S COLLEGE (AUTONOMOUS) TIRUCHIRAPPALLI – 620 002
SEMESTER EXAMINATIONS – NOVEMBER 2014
TIME: 3 Hrs.
MAXIMUM MARKS: 100
SEM
SET
PAPER CODE
TITLE OF THE PAPER
III
2013
11UCC330207
CORPORATE ACCOUNTING
SECTION – A
Answer all the questions:
20 x 1 = 20
Choose the correct answer:
1. The difference between subscribed capital and called up capital is
called
a) Un called capital
b) Calls in arrear
c) Paid up capital
d) Calls in advance
2. Dividends are usually paid on
a) Authorized capital
c) Paid up capital
b) Subscribed capital
d) Called up capital
3. Accounting standard for Amalgamation is
a) AS-8
b) AS-20
c) AS-14
d) AS-3
4. A company in which more than 50% of shares are held by another
company is termed as
a) Holding company
b) Subsidiary company
c) Government company
d) Public company
5. Secured creditors are shown in the statement of affairs under
a) List A
b) List B
c) List C
d) List D
Fill in the blanks:
6.
Share holders receive ______ as return for their Investment.
7.
8.
Find accounts of a company consists of two statements namely
______ and ______.
Pooling of Interest method is used to account for amalgamation in
the nature of ______.
9.
Minority Interest is shown on the ______ side of consolidated
Balance sheet.
10. The job of realizing assets and paying various liabilities during
liquidation of a company is performed by a person called ______.
State True or False:
11. A shareholder of a company is liable for the acts of the company.
12. Managerial remuneration is to be calculated only after providing
for taxation.
13. Net Assets taken over by the purchasing company is deemed as the
purchased consideration under the Net Assets method.
14. Pre-acquisition profit also called capital profits.
15. Winding up by the court is called compulsory winding up.
Match the following:
16. Share holders
- a) Includes absorption also
17. Preliminary expenses
- b) Revenue profits
18. Amalgamation
- c) Unsecured creditors
19. Post acquisition profits - d) Fictitious asset
20. List E
- e) Owners of a company
SECTION – B
Answer all the questions:
5 x 7 = 35
21. a. MTL Ltd. invited applications for 20,000 shares of ` 100 ech
payable.
` 25 on application
` 35 on allotment
` 40 on call
25,000 shares were applied for he directors accepted
applications for 20,000 shares and rejected the remaining
applications. All moneys due were fully received. Give
journal entries.
OR
b. James and Co. Ltd. offered 25,000 shares of ` 10 each to the
public on the following terms.
` 2.50 on application
` 3.00 on allotment
` 2.00 on first call
` 2.,50 on second and final call
The public applied for 22,000 shares which were allotted.
All moneys due were received except a shareholder holding
500 shares failed to pay both of the calls. Make necessary
entries in the journal book.
22. a. Determine the Maximum remuneration payable to the part time
directors and manager of Bharat Ltd. under sections 309 and
387 of the Companies Act 1956 from the following particulars.
Before charging any such remuneration, the P/L A/c showed
a credit balance of ` 23,05,000 for the year ended 31st March
1998 after taking into account the following matters:
`
i)
Profit on sale of investments
2,05,000
ii)
Subsidy received from govt.
4,10,000
iii) Loss on sale of fixed assets
65,000
iv) Ex-gratia to an employee
30,000
v)
Compensation paid to injured workman
75,000
vi) Provision for taxation
2,79,000
vii) Bonus to foreign technicians
3,12,000
viii) Multiple shift allowance
1,00,000
ix) Special depreciation
75,000
x)
Capital expenditure
5,10,000
Company is providing depreciation as per section 350 of the
Companies Act 1956.
OR
b. Nathiya Ltd. has a credit balance on P & L a/c of ` 3,00,000 on
1-4-2000 and the net profit for the year 2000-01 is ` 3,00,000.
It was decided that the following decisions be carried out
regarding provisions, reserve and dividends.
i)
General Reserve ` 3,50,000
ii) Investment allowance reserve ` 3,50,000
iii) Provision for taxation @ 50%
iv) Dividend equalization fund A/c ` 2,00,000
iv) Dividend on 10% pref. shares of ` 20,00,000
Dividend on 15% on 3,00,000 equity shares of ` 10 each
fully paid
Prepare P/L Appropriation A/c.
23. a. Ramola ltd., agrees to purchase the business of laxmi ltd. on
the following terms.
v)
a) For each of the 10,000 shares of ` 10 each in laxmi ltd. 2
shares in Ramola ltd. of ` 10 each will be issued at an
agreed value of ` 12 per share. In addition, ` 4 per share
cash also will be paid.
b) 8% debentures worth ` 80,000 will be issued to settle the
` 60,000, 9% debentures in laxmi ltd.
c) ` 10,000 will be paid towards expenses of winding up.
Calculate the purchase consideration.
OR
b. Following is the balance sheet of Samy ltd. as on 31.3.2004.
Assets
`
Fixed Assets 16,25,000
3,75,000 Investments
3,00,000
7,50,000 Current
4,50,000 Assets
2,50,000
3,50,000
2,50,000
21,75,000
21,75,000
Romy ltd. agreed to take over the business of Samy ltd.
Liabilities
Sh. Capital:
8% pref. shares of ` 100 each
Eq. shares of ` 10 each
General reserve
7% debentures
Current liabilities
`
A) Calculate purchase consideration under Net Assets method on
the basis of the following.
i) Romy ltd. agreed to discharge 7% debentures at a
premium of 10% by issuing 9% debentures of Romy ltd.
ii) Fixed assets are to be valued at 10% above book value,
the investment at par, Current Assets at 10% discount and
current liabilities at book value.
B) Calculate purchase consideration under Net Paymet method on
basis of the following:
i) Romy ltd. agrees to discharge the 7% debentures at a
premium of 10% by issuing 9% debentures of Romy ltd.
ii) Preference shares are discharged at a premium of 10% by
issuing 10%. Preference shares of ` 100 each in Romy ltd.
iii) For every 2 equity shares in Samy ltd., 3 equity shares of `
10 each in Romy ltd. will be issued in addition to cash
payment of ` 3 equity shares in Samy ltd.
24. a. Prepare a consolidated Balance sheet from the following
Balance sheets:
Liabilities
H ltd. S ltd.
Assets
H ltd. S ltd.
`
`
`
`
885 1,510
Eq. sh. Capital
Sundry Assets
@ Re 1 per share 1,400 1,000 Shares in ‘S’ ltd.
Creditors
350 190 900 shares at
P & L A/c
cost
260 320
1,125
-2,010 1,510
2,010 1,510
On the date of acquisition of shares by H ltd. in S ltd., the credit
balance on Latters profit and loss a/c was ` 220. No dividends has been
declared since that date.
OR
b. Consolidate the following Balance sheets.
H ltd. S ltd.
H ltd. S ltd.
Liabilities
Assets
`
`
`
`
Sh. Capital
900 shares in
Re. 1 per share 1,400 1,000 S ltd. at cost 1,200
-Creditors
-- 500 Sundry Assets
200 1,800
P & L A/c
-- 300
1,400 1,800
1,400 1,800
When H ltd., acquired the shares in S ltd., the profit and loss
A/c of the latter had a credit balance of ` 200.
25. a. The following particulars relate to a limited company which
went into voluntary liquidation:
Preferential creditors
` 25,000
Unsecured creditors
` 58,000
6% debentures
` 30,000
The assets realized ` 80,000. The expenses of liquidation
amounted to ` 1,500 and the liquidator’s remuneration was
agreed at 2½ % on the amount realized and 2% on the amount
paid to unsecured creditors including preferential creditors.
Show the liquidator final statement of account.
OR
b. “A” ltd. went into liquidation with the following Liabilities:
a) Secured creditors ` 20,000 (Securities realized ` 25,000)
b) Preferential creditors ` 600
c) Unsecured creditors ` 30,500
liquidation expenses are ` 252. Liquidator is entitled to a
remuneration of 3% on the amounts realized (including
securities with creditors) and 2½ % on the amount distributed
to unsecured creditors. The various assets realized ` 26,000
(excluding securities in the hands of secured creditors).
Prepare the liquidator’s final statement of account.
SECTION – C
Answer any THREE questions:
3 x 15 = 45
26. Gayathri ltd. issued 40,000 shares of ` 10 each at a premium of ` 2
per share. The shares were payable as follows:
` 2 on application
` 5 on allotment (including premium)
` 5 on first and final call.
All the shares were applied for and allotted. All money’s were
received with the exception of the first and final call on 1,000
shares which were forfeited. 400 of these were reissued as fully
paid at ` 8 per share.
Give the necessary journal entries, prepare the bank A/c and the
Balance sheet of a company.
27. Zee ltd. was registered with an authorized capital of ` 6,00,000 in
equity shares of ` 10 each. The following is its Trial Balance on
31st March 1998.
Trial Balance of Zee ltd.
`
`
Goodwill
Cash
Bank
Purchases
Preliminary expenses
Calls in arrears
Premises
Plant and machinery
Interim dividend
Stock (1-4-97)
Furniture and fixtures
Sundry debtors
Wages
General expenses
Freight & carriage
Salaries
Directors fees
Bad debts
Debenture
25,000 Sh. Capital
4,00,000
750 12% debentures
3,00,000
39,900 P/L A/c (Cr.)
25,250
1,85,000 Sales
4,15,000
5,000 Bills payable
37,000
7,500 Sundry creditors
40,000
3,00,000 General reserve
25,000
3,30,000 Provision for bad
39,250 debts
3,500
75,000
7,200
87,000
84,865
6,835
13,115
14,500
5,725
2,110
18,000
12,46,750
12,46,750
Prepare profit and loss account, profit and loss appropriation a/c
and balance sheet in proper form after making the following
adjustments:
i) Depreciate plant and machinery by 15%
ii) Write off ` 500 from preliminary expenses
iii) Provide for 6 months interest on debentures
iv) Leave bad and doubtful debts provision at 5% on sundry
debtors.
v) Provide for income tax at 50%
vi) Stock on 31.3.1998 was ` 95,000.
28. Alpha ltd. and Beta ltd. were amalgamated on 1st April 2001. A
new company Gamma ltd. was formed to take over the business of
the existing companies. The balance sheets of Alpha ltd. and Beta
ltd. as on 31st March 2001 are given below:
Liabilities
Alpha Beta
(` in (` in
lakhs) lakhs)
Assets
Alpha Beat
(` in (` in
lakhs) lakhs)
1,200 1,000
Sh. Capital:
Fixed Assets
Current Assets:
Eq. sh. of ` 100
1,000
800 Loans and
each
Advances
880
565
15% pref. sh. of
400
300
` 100 each
Reserves and
surplus:
100
80
Revaluation fund
200
150
General reserve
80
60
P & L A/c
Secured loan:
12% debentures
96
80
of ` 100 each
Current liability
204
95
and provisions
2,080 1,565
2,080 1,565
Other information:
i)
12% debentures of Alpha ltd. and Beta ltd. are discharged by
Gamma ltd. by issuing adequate number of 16% debentures
of ` 100 each to ensure that they continue to receive the same
amount of interest.
ii) Preference share holders of Alpha ltd. and Beta ltd. have
received same number of 15% preference shares of ` 100 each
of Gamma ltd.
iii) Gamma ltd. issued 1.5 equity shares for each equity share of
Alpha ltd. and 1 equity shares for each equity share of Beta
ltd. The face value of shares issued by Gamma ltd. is ` 100
each.
Required to prepare Balance sheet of Gamma ltd. as on 1st
April 2011 after the Amalgamation has been carried out using the
‘Pooling of interest method’.
29. The Balance sheets of C ltd. and D ltd. as at 31st December, 1986
are as follows:
Liabilities
Assets
C ltd. (`) D ltd.
C ltd. (`) D ltd. (`)
(`)
Share capital
Sundry
(in shares of
Assets
1,32,500 1,38,200
Goodwill
-20,000
C ltd. ` 10
2,00,000 1,00,000 Shares in D
each)
ltd. at cost 1,40,000
-General
18,000 20,000
Reserve
Profit and
24,500 23,000
Loss A/c
30,000 15,200
Creditors
2,72,500 1,58,200
2,72,500 1,58,200
In case of ‘D’ ltd., profit for the year ended 31st December 1986 is
` 12,000 and transfer to reserve is ` 5,000. The holding of C ltd. in
D ltd. is 90% acquired on 30th June 1986. Draft a consolidated
Balance sheet of ‘C’ ltd. and its subsidiary.
30. A company went into voluntary liquidation on 31.3.1998. When
the following Balance sheet was prepared.
Liabilities
Assets
`
`
Authorized capital:
Goodwill
6,960
4,000 shares of ` 10 each 40,000 Free hold property 5,000
Machinery
7,480
Issued capital:
11,710
3,000 shares of ` 10 each 30,000 Stock
15,432 Debtors
9,244
Unsecured creditors
5,836 Cash
100
Partly secured creditors
810 P/L A/c
11,816
Preferential creditors
232
Bank overdraft (unsecured)
52,310
52,310
The liquidator realized the assets as follows:
Freehold property which was used in the first instance to pay
the partly secured creditors Pro-rata ` 3,600; Machinery ` 5,000;
Stock ` 6,200; Debtors ` 8,700; cash ` 100.
The expenses of liquidation amounted to ` 100 and the
liquidator’s remuneration was agreed at 2.5% on the amount
realized including cash and 2% on the amount paid to unsecured
creditors.
Prepare the liquidator’s final statement of A/c.
**************