Loyola College B.B.A. Business Administration April 2009 Company Accounts Question Paper PDF Download



JQ 09






Date & Time: 24/04/2009 / 9:00 – 12:00  Dept. No.                                                   Max. : 100 Marks



PART-A                                                (10 x 2 = 20 Marks)

Answer ALL questions


1.What is the meaning of forfeited shares?

2.What are the different types of  underwriting?

3.Write a short note on redemption of debentures.

4.What is meant by ex-interest price and cum-interest price?

5.The provision for tax at the end of 31.03.2007 stood at  Rs.300000.During2007-08 the tax

liabilities up to 31.03.2007 were settled for Rs.274000. provision required in respect of 2007-08

is Rs. 82000. How will you show provision for tax in profit &loss account?

  1. What are the objectives of cash flow statement?

7.How do you calculate time ratio and sales ratio?

8.In order to provide capital reduction scheme, a debenture holder of  Rs.  400000 has agreed to

take over stock worth Rs. 100000 and book debts of Rs.  80000 in full satisfaction of the amount

due to him. Pass journal entry  to record  the above transaction.

9.Write a note on voluntary winding up.

10.Ascertain the value of an equity share under networth method from the  following data

assuming preference shares have priority as to the payment  of capital only :


10% preference shares of Rs.10 each fully paid       :           Rs   600000

Equity shares of Rs. 10 each fully paid                    :           Rs   800000

Net assets available to shareholders                           :          Rs.2800000


                           PART-B                                                                     (5 x 8 = 40 Marks)    

      Answer any FIVE questions:


11.Define a share. Explain the various  types shares.

12.PQR Ltd. issued 25000 shares of 100 each.The whole issue was underwritten by James. In

addition, there is firm underwriting of  3000 shares by James. Applications for 17000 shares

were received by the company in all. Calculate the liability of James.

  1. What is a debenture? How does it differ from a share?
  2. How will you deal with the following items while preparing a company’s final accounts for the

year ended 31.03.2009?

[a] Land& Buildings [cost Rs.1000000; depreciation provided

Rs. 160000] sold for Rs.1500000.

[b] Closing stock valued at market price Rs.1240000 instead of cost which was Rs.1300000.

15.Advance petro Ltd. was incorporated on 1-3-2008 to acquire a spice powder merchant’s

business as from 1-1-2008. The purchase consideration was agreed at Rs.60000 to be satisfied

by issue of 6000 equity shares of Rs.10 each. The shares were issued to vendor on 1-4-2008.

You are required to apportion the interest paid to vendor between pre and post incorporation

periods assuming the rate of interest is 6% p.a.

16.Explain the different kinds of Alteration of Share capital which do not  require approval of a

court of law.

  1. On the date of liquidation of a company, the salaries of four clerks for  four months at the rate

of  Rs.7000 p.m. per clerk and salaries of four peons for three  months at the rate of Rs.1500

p.m. per peon are outstanding. You are required to calculate the amount to be included in

preferential creditors and unsecured creditors.


  1. Allen runs a cosmetic store. His net assets on 31st Dec. 2008 amounted to Rs. 250000. After

paying rent of Rs.2500 a year and a salary of  Rs. 12000 to his manager, he earns a profit of

Rs. 75000. His landlord is interested in acquiringthe business. 15% is considered to be

reasonable return on capital employed. Calculate the value of  goodwill by capitalising super





                                                   PART-C                                             (2 x 20 = 40 Marks)


      Answer any TWO questions:


  1. ABC Ltd. had Rs. 400000 5% Debentures outstanding on 1.1.2008  [redeemable on 31.12.08]

on that date the sinking fund stood at Rs.374500, represented by Rs. 50000 own debentures

purchased at an average price of  Rs.99 and Rs. 330000  3% stock. The annual installment

added to the fund was Rs.14200.  On 31st Dec. 2008  the investments were realised at Rs. 98

and the debentures were redeemed.Write up the accounts for 2008.


20.Balance sheets of M/s. Green and Red as on 1st Jan.2008 and 31st  Dec. 2008 were as follows:


Liabilities    1.1.08     31.12.08          Assets          1.1.08        31.12.08

Rs.            Rs.                                        Rs.               Rs.

creditors      40000       44000             cash               10000           7000

Red’s loan   25000          –                   Debtors          30000         50000

Bank loan    40000       50000             stock              35000         25000

Capital       125000     153000             Machinery      80000         55000

Land               40000         50000

Buildings       35000         60000


Total         230000     247000                                   230000       247000


During the year machine costing Rs. 10000 [accumulated depreciaton  Rs.3000] was sold for

Rs.5000. The provision for depreciation against machinery as on 1st Jan. 2008 was Rs. 25000

and on 31st Dec. 2008  Rs. 40000. Net profit for the year 2008 amounted to Rs. 45000.

Prepare Cash flow statement.


  1. The following was the Balance sheet of Bharat construction Ltd.as on 31st March 2009.


Liabilities                  Rs.                 Assets                         Rs.


Issued and paid up                              Goodwill                  10000

capital                                                 Land& Buildings     20500

12000 shares of                                    Machinery                50850

Rs. 10 each  1,20,000                         Preliminary exp.        1500

Less:                                                   Stock                         10275

calls in arrear                                      Debtors                     15000

Rs.3 per share                                     Bank balance              1500

on 3000 shares     9000                         Profit&loss a/c          20800

———-  1,11,000

Creditors                            15,425

Provision for tax                 4,000


Total                            1,30,425                                          1,30,425


Machinery value was Rs. 10000 excess. It is proposed to write down  this asset and  to

extinguish the profit &loss a/c debit balance and to write off goodwill and preliminary expenses

by adoption of the following scheme:

[a] Forfeit the shares on which the call are outstanding ;

[b] Reduce the paid-up capital by Rs.3 per share;

[c] Re-issue the forfeited shares at Rs. 5 per share and

[d] Utilise the provision for tax  if necessary.


You are required to draft the journal entries necessary and the

Balance sheet after carrying out the scheme.



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