| ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) | ||||||||||||||||||||||||||||||||||||||||||||
| SUPPLEMENTARY EXAMINATION – SEPT/OCT. 2015 | ||||||||||||||||||||||||||||||||||||||||||||
| B.COM – III SEMESTER (12 BATCH) | ||||||||||||||||||||||||||||||||||||||||||||
| C1 12 301: ADVANCED ACCOUNTING – II | ||||||||||||||||||||||||||||||||||||||||||||
| Duration: 3 Hours Max. Marks: 100 | ||||||||||||||||||||||||||||||||||||||||||||
| SECTION – A | ||||||||||||||||||||||||||||||||||||||||||||
| I) | Answer ALL the questions. Each carries 2 marks. (10×2=20) | |||||||||||||||||||||||||||||||||||||||||||
| 1. | ‘During the process of internal reconstruction, a company issues different classes of shares’. Which form of internal reconstruction does the above statement talk about? Does it lead to reduction in Share capital? | |||||||||||||||||||||||||||||||||||||||||||
| 2. | Mention the methods of calculating purchase consideration. | |||||||||||||||||||||||||||||||||||||||||||
| 3. | Mention any 2 legal provisions relating to redemption of preference shares. | |||||||||||||||||||||||||||||||||||||||||||
| 4. | Differentiate between capital reduction a/c and capital redemption reserve a/c. | |||||||||||||||||||||||||||||||||||||||||||
| 5. | Briefly explain ex-interest and cum-interest debentures. | |||||||||||||||||||||||||||||||||||||||||||
| 6. | Mention under each circumstance below whether a new company is formed or not with reasons.
a. Internal Reconstruction b. Absorption. |
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| 7. | Who are contributories? Explain their classification. | |||||||||||||||||||||||||||||||||||||||||||
| 8. | Who are preferential creditors, give 2 examples.? | |||||||||||||||||||||||||||||||||||||||||||
| 9. | A Ltd. has acquired 80% shares in B Ltd. for Rs. 15,00,000. The net assets of B Ltd. on the day are Rs. 22,00,000. Calculate the goodwill or capital reserve to be recorded in consolidated financial statements. | |||||||||||||||||||||||||||||||||||||||||||
| 10. | Bring out any four methods of buy back of shares as per Section 77A (5) of Companies Act, 1956. | |||||||||||||||||||||||||||||||||||||||||||
| SECTION – B | ||||||||||||||||||||||||||||||||||||||||||||
| II) | Answer any FOUR questions. Each carries 5 marks. (4×5=20) | |||||||||||||||||||||||||||||||||||||||||||
| 11. | On satisfaction of which conditions results in ‘amalgamation in nature of merger’? | |||||||||||||||||||||||||||||||||||||||||||
| 12. | Following is the balance sheet of A ltd as on 31/3/2014:
B Ltd absorbs the business of A Ltd and agrees to discharge the purchase consideration as under: a) cash payment of Rs 2 per share b) issue of sufficient number of equity shares of Rs 10 each at a premium of 100% for the balance Calculate the purchase consideration and state the number of equity shares issued assuming that fixed assets are valued at Rs 2,75,000 and current assets at Rs 45,000.
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| 13. | Excell Ltd purchased its own 12% debentures of face value of Rs 100 each (interest payable on 30th September and 31st March) as sinking fund investment as shown below: 1st August 2013 – Rs 6,00,000 @ Rs 94 ex- interest 31st December 2013 – Rs 4,00,000@ Rs 95 com-interest. The total amount of debentures outstanding on 1st April 2013 was
Rs 1, 00, 00,000. Calculate the amount to be credited to the sinking fund during the year ending 31st March 2014 by way of interest resulting from the above mentioned transactions? |
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| 14. | What determines the method of accounting in an amalgamation? Elaborate on how the two accounting methods in amalgamation different? | |||||||||||||||||||||||||||||||||||||||||||
| 15. | Kitkat Co. Ltd. issued 50,000 Equity shares of Rs.10 each and 3000, 10% Preference shares of Rs.100 each, all shares being fully paid. On 31.3.15, Profit and Loss Account showed an undistributed profit of Rs. 50,000 and General Reserve Account stood at Rs. 1,20,000. On 2.4.15, the directors decided to issue 1500, 6% Preference shares of Rs.100 each for cash and to redeem the existing preference shares at Rs.105 utilizing as much as would be required for the purpose. Show the journal entries to record the transactions. | |||||||||||||||||||||||||||||||||||||||||||
| 16. | XYZ Company went into liquidation with the following liabilities:
a) Secured creditors Rs 20,000 (securities realized Rs 25,000) b) Preferential creditors Rs 600 c) Unsecured creditors Rs 30,000 liquidators out of pocket expenses- 252 The liquidator is entitled to a remuneration of 3% on amounts realized including securities in hands of creditors and 1.5% on the amount distributed to unsecured creditors. The various assets (excluding securities in the hands of secured creditors) realized Rs 26,000. Prepare the liquidator’s account showing the compensation given to unsecured creditors.
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| SECTION – C | ||||||||||||||||||||||||||||||||||||||||||||
| III) | Answer any THREE questions. Each carries 15 marks. (3×15=45) | |||||||||||||||||||||||||||||||||||||||||||
| 17. | Blue Ltd and Star ltd were amalgamated on and from 1/4/2012. A new company called Yellow Star Ltd was formed to take over the business of the above said companies. The balance sheets of both companies as on 31/3/2012 are as follows:
Additional information: a) Preference shareholders of Blue Ltd and Star Ltd have received same number of 15% preference shares of Rs 100 each in the new company. b) 12% Debentures of Blue Ltd and Star Ltd are discharged by the new company by issuing adequate number of 16% debentures of Rs 100 each to ensure that they continue to receive the same amount of interest. c) Yellow Star ltd has issued 1.5 equity shares for each equity share of Blue Ltd and 1 equity share for each equity share of Star Ltd. The face value of shares issued by Yellow Star is Rs 100 each. You are required to prepare the Balance Sheet of Yellow Star Ltd as on 1/4/2012 after the amalgamation has been carried out using the ‘Pooling of interest method’.
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| 18. | Shutdown Ltd. have almost ceased to be a going concern. Its balance sheet as on 31st March, 2014 was as follows:
In addition there was a contingent liability of Rs. 30,000 on account of a legal dispute. Savior Ltd. was incorporated on 1st April, 2014 to take over the business of Shutdown Ltd. It agreed to take over the assets as follows:
The purchase consideration was satisfied by issuing equal number of equity and preference shares in Savior Ltd., both having a face value of Rs. 10 per share. The contingent liability did materialize but for Rs. 20,000 only. It was taken over by Savior Ltd. and settles by issue of equity shares. The preference shareholders of Shutdown Ltd. accepted the preference shares received from Savior Ltd. in full settlement. Prepare closing ledger accounts in the books of Shutdown Ltd, opening journal entries in the books of Savior Ltd.
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| 19. | Balance Sheet of Brand Ltd. as on 31st March, 2015
Following scheme of reconstruction has been passed and approved by the court on 1.4.2015: (i) The equity shares are to be reduced to shares of Rs. 6 each fully paid 8% Preference shares are to be reduced to 10% preference shares of Rs. 80 each fully paid. Number of shares to remain the same. (ii) 9% debentures are to be reduced to 10% debentures of Rs. 80 each fully paid. (iii) The amount so available will be used to write off loss and goodwill first, and there after fixed assets to the extent possible. You are required to give journal entries and Balance Sheet in the books of Brand Ltd.
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| 20. | Following are the Liabilities and Assets of a company as on 30th April, 2015
It was decided to redeem both the classes of preference shares on 30th June, at a premium of 5%. In May, 2015, the company issued for cash so many equity shares of Rs. 10 each as were necessary to provide for redemption of both classes of preference shares which could not otherwise be redeemed. The issue was fully subscribed and all the amounts were received. You are required to pass journal entries in the books of the company and draw up the amended balance sheet.
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| 21. | Luckless Ltd went into voluntary liquidation on 31/12/2001. The balance sheet as on that date was:
The preference dividends are in arrears from 1st January 1998. The Company’s articles provide for the payment of premium of Rs 12.50 per share along with any arrears of dividend to the cumulative preference shareholders in the event of liquidation of the company and payable in priority to the equity shareholders. The bank o/d was guaranteed by the directors who duly implemented their guarantee. Liquidator realized the assets: Property- Rs 7,00,000 Plant – Rs 2,40,000 Motor vehicle- Rs 50,000 Stock- Rs 1,50,000 Debtors- Rs 60,000. The calls in arrears were duly collected by him. The trade creditors agreed to receive 5% less than their claims. The cost of liquidation-Rs 2,750. The liquidators remuneration was 2.5% of the total amount realized and 1% on the amount paid to unsecured creditors. Prepare the liquidators final statement of account, indicating the amount paid on each equity share by the liquidator
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SECTION – D |
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| IV) | Case Study (1×15=15) | |||||||||||||||||||||||||||||||||||||||||||
| 22. | D Ltd. and F Ltd. were amalgamated on and from 1st April, 2009. A new Company P Ltd. was formed to takeover the business of the existing companies. The Balance Sheets of D Ltd. and F Ltd. as on 31st March, 2009 are given below :
Other information:
Prepare Journal Entries and prepare the Balance Sheet of P Ltd. after the amalgamation is carried out using under Merger Method.
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