Loyola College B.B.A. Business Administration April 2009 Corporate Accounting Question Paper PDF Download



JQ 07






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



                                PART-A                                    (10 X 2 = 20 Marks)



  1. What is meant by calls-in-Advance?
  2. S Ltd. issued 40,000 shares of Rs.10 each payable in full on application as per a private placement

agreement. the company received application for 40,000 shares .Applications were accepted in

full. Show journal entries in the books of S Ltd.

  1. Redemption of 20,000 preference shares of Rs.100 each was carried out by utilisation of reserves

and by issue of 8,000 equity shares of Rs.100 each at Rs.125 .How much should be credited to

capital redemption Reserve a/c?

  1. Write a note on’ Rights Shares’.
  2. What are the methods of computing purchase consideration?
  3. Dinesh Ltd. earned a profit after tax of Rs.10,00,000. in 2007-08 and it wanted to pay a dividend of

18% on its capital of Rs.30,00,000.What will be  the balance left in the profit and loss a/c?

  1. What is meant by sub-division of shares?
  2. If a company is purchased for a price(i.e Rs.10,00,000. ) which is less  than the net value of the

business(i.e Rs.15,00,000) How is the difference dealt with?

  1. What is statement of affairs?
  2. From the following particulars, compute the value per equity shares under net assets method:

Total assets  at market value       :   Rs. 49,80,000.

Total outside liabilities                :   Rs. 19,00,000

2,00,000 equity shares of

Rs.10 each               :   Rs. 20,00,000.


PART-B                                                         (5 x 8 = 40 Marks)




  1. Explain forfeiture and re-issue of shares.
  2. Krishna Ltd. which had Rs.50,00,000 10% Debentures outstanding made the following purchases in

the open market for immediate cancellation:

1.4.2007      1000 Debentures of Rs.100 each at Rs.99

1.9.2007      2000 Debentures of Rs.100 each at Rs.97

you are required to give the journal entries for purchase and cancellation of debentures, if the above

purchase rates are Ex- interest.

  1. X Ltd. wishes to redeem ist redeemable preference shares of Rs.2,00,000 at a premium of 20%.For

this purpose, it has been decided to make a fresh issue of Rs.100 shares at 10% premium and utilise

the profits of Rs.42,000 available for dividend. You are required to calculate the minimum fresh

issue of shares that the company has to make to the public.

  1. Explain the legal provisions regarding issue of bonus shares by the companies.
  2. Z Ltd. does not want to take over debtors and creditors of vendor. However ,it agreed to collect

from debtors and pay to creditors for a commission of 3% on amount  collected and 1% on amount

paid The debtors realised Rs.1,70,000 only out of which Rs,50,000 was paid to creditors.

Calculate the amount of commission earned and amount payable to vendor.

  1. From the following particulars relating to Z Ltd. Calculate the balance profit to be transferred to

balance sheet-

(i)   Equity share capital                    Rs. 2,00,000

(ii)  P & L a/c(credit )                        Rs    .30,000

(iii) Net profit for the current

year                    Rs.    56,800

(iv) Dividend proposed by the directors @ 12% p.a. after the  minimum transfer to General

Reserve as required by law

  1. On 30th June 2007 Ford Ltd. passed a resolution consolidating 80,000 fully paid equity shares of

Rs.10 each into 8,000 fully paid equity shares of Rs.100 each. On 30th June 2008 the company

passed another resolution converting the shares into stock. Journalise the transactions.


  1. From the following details ascertain unsecured creditors to be shown in statement of affairs:


Creditors for goods                                         80,000

Bills payable                                                      8,000

Loan from bank                                              20,000


Bank overdraft                                                  6,000

Loan on security of machinery                       40,000

Estimated realisable value of

machinery  32,000

Bills discounted                                         31,000 (20% expected to rank)

Contingent liabilities                                 25,000 (10% expected to rank)


PART C                                                   (2 x 20 = 40)


  1. Nalli & co Ltd. was registered with an authorised capital of Rs.20,00,000 divided into 20,000

shares of Rs.100 each. The company offered 12,000 shares  to the public which were payable:

Rs. 20 per share on application ;

Rs. 40 per share on  allotment and

Rs. 40 on call.

Applications for 18,000 shares were received on which the directors allotted as follows

Applications  for 10,000 shares- full

Applications for  5000 shares-2000 shares

Applications for 3000 shares-NIL

The excess application money was adjusted towards allotment. All the money due to allotment and call was fully received.

Make necessary entries in the company’s books.

  1. The Moon Co. Ltd. and the Rising star Co. Ltd. have agreed to amalgamate . A new company

Sunshine Co. Ltd. has been formed to take over the combined concerns as on 31st March 2009.

After negotiations, the assets of the two companies have been agreed at as shown in the

following balance sheets:

The Moon co.Ltd.

Liabilities                       Rs.                       Assets                                    Rs.

Issued capital                                            Land & buildings             5,00,000

1,00,000 ordinary        10,00,000              Plant & machinery            2,00,000

shares of Rs.10                                           Patents                             1,10,000

fully paid up                                               Stock                               1,50,000

Sundry creditors               80,000               Sundry debtors                1,20,000

Profit & loss a/c                50,000               Cash at bank                        50,000

————–                                                —————

TOTAL        11,30,000                                                    11,30,000

————–                                                —————

The Rising Star co Ltd

Liabilities                       Rs.                     Assets                                    Rs

Issued capital                                            Land & buildings             3,00,000

50,000 ordinary            5,00,000              Plant & machinery            2,50,000

shares of Rs.10                                          Goodwill                             50,000

each                                                  Stock                                    20,000

Sundry creditors               50,000               Sundry debtors                    20,000

Reserve fund                    50,000               Cash at bank                        10,000

Profit & loss a/c              50,000

————-                                                    ————-

TOTAL         6,50,000                                                         6,50,000

————-                                                    ————-

Show how the amount payable to each company is arrived at and prepare amalgamated balance sheet

of the new company..


  1. It is provided in the articles of association that at the death of a share holder his shares will be

purchased by the remaining shareholders at a price to be settled on the basis of the last balance

sheet. It is further provided that goodwill shall be valued on the basis of 3 years’ purchase

of the average annual  profits for the last 5 years . The last balance sheet is as follows:


Liabilities                          Rs.                        Assets                                Rs

20,000 equity shares

of Rs.10 each                      2,00,000               Goodwill                    2,00,000

General reserve                   2,00,000               Investment                 3,00,000

Workmen’s savings fund    2,00,000               (market value Rs.2,50,000)

Employees P.F                   1,00,000               Stock                          5,00,000

Creditors                             6,00,000               Bank balance                 70,000

Profit & loss a/c                  1,70,000               Debtors                       4.00,000

—————-                                        —————-

TOTAL                  14,70,000                                              14,70,000

—————                                      —————-

The profits for the last five years were :Rs.15,000 ;Rs.20,000;Rs.25,000;

Rs.30,000 & Rs.35,000.You are required to calculate  the price to be paid for each share.



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