ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – SEPT/OCT. 2015

B.B.M – III SEMESTER

M1 11 301: CORPORATE ACCOUNTING

Duration: 3 Hours Max. Marks: 100

SECTION – A

Answer ALL the questions. Each carries 2 marks. (10×2=20)

Distinguish between calls in Arrears and calls in Advance.

Who is a contributory?

What are the different methods of calculating Purchase Consideration?

What is External Reconstruction?

State the order in which Capital Reduction Account must be used.

How do you treat Preliminary Expenses in the final accounts of company?

Who is a Liquidator?

What does Accounting Standard 26 pertain to?

Who are preferential creditors?

10.

What is the meaning of Accounting Standard?

SECTION – B

II)

Answer any FOUR questions. Each carries 5 marks. (4×5=20)

11.

Bring out the difference between two methods of accounting for Amalgamation

12.

From the following particulars, prepare Income Statement for the year ended 31^st March 2014.

Particulars	Amount (Rs)
P/L A/c balance brought forward	1,00,000
Net Profit before tax (Provision for taxation 40%)	8,75,000
Transfer to Reserve Fund	1,25,000
The share capital consists of the following : (i) 10,000 12% preference shares of Rs. 100 each fully paid (ii) 10,000 Equity shares of Rs. 100 each Rs. 80 paid
The Directors propose a dividend of 20% on equity shares.

13.

The Balance Sheet of X Ltd and Y Ltd as on 31/12/2014 are given below:

Particulars	X Ltd	Y Ltd
I. Equity and Liabilities
1. Shareholders Funds:
Share Capital (Rs.10 each)	1,00,000	1,20,000
General Reserve	50,000	70,000
Export Profit Reserve	20,000	30,000
2. Non-Current Liabilities:
14% Debenture	50,000	50,000
3. Current Liabilities
Creditors	20,000	10,000
Provisions	45,000	50,000
Total	2,85,000	3,30,000

II. Assets	X Ltd	Y Ltd
1. Non-Current Assets:
Fixed Assets	1,65,000	2,10,000
Investment	50,000	——
2. Current Assets
Stock	40,000	50,000
Debtors	25,000	65,000
Cash and Bank	5,000	5,000

Total	2,85,000	3,30,000

XY Ltd has been formed for the amalgamation , which took over X Ltd and Y Ltd and in exchange shares of XY Ltd . (of Rs. 10 each) were issued. To arrive at purchase consideration, fixed assets of X Ltd and Y Ltd were valued at Rs. 1,55,000 and Rs. 2,30,000 respectively . 14% new Debentures are to be issued to the debenture holders of X Ltd and Y Ltd . Expenses for amalgamation were Rs. 1,000.

Calculate Purchase Consideration.

14.

Calculate liquidator’s remuneration and amount available to pay unsecured creditors:

(i) Balance of cash after paying preferential creditors Rs. 2,10,000.

(ii) Other unsecured creditors are Rs. 2,50,000.

(iii) Liquidator’s remuneration is 5% on the amount paid to other unsecured creditors.

15.

Balance Sheet of a private company stood as follows on 31/12/2014:

Balance Sheet

Liabilities	Amount (Rs)	Assets	Amount (Rs)
19,000 Shares of Rs. 100 each	19,00,000	Land & Building	1,00,000
Creditors	1,00,000	Machinery	2,60,000
Debentures	1,00,000	Furniture	20,000
		Stock	3,70,000
		Debtors	1,80,000
		Goodwill	2,00,000
		Profit & Loss A/c	9,70,000
	21,00,000		21,00,000

The company is to be reconstructed as follows:

(a) Shares of Rs. 100 are to be reduced to an equal number of fully paid shares of Rs. 40 each.

(b) To issue 1,000 new shares of Rs. 40 each as fully paid up to debenture holders in full settlement.

(c) The amount available is to be utilized in writing off the goodwill and Profit and loss A/c and the balance in writing down the value of machinery .

(d) Authorized capital of the company is 20,000 shares of Rs. 100 each. Prepare Capital Reduction Account.

16.

What are the functions of Accounting Standard Board?

SECTION -C

III)

Answer any THREE questions. Each carries 15 marks. (3×15=45)

17.

Bharath Limited was absorbed by Indian Limited on 31/12/2014 on which date the Balance Sheet of Bharath Limited was as follows:

Particulars	Amount (Rs)
I. Equity and Liabilities:
1.Shareholders Funds:
Equity Share Capital	6,00,000
5% Preference Share Capital	4,00,000
2. Current Liabilities:
Sundry Creditors	1,50,000
3. Other Current Liabilities:
-P&L Account	(3,50,000)
Total	8,00,000


II.Assets	Amount (Rs)
1. Non-Current Assets:
Buildings	4,00,000
Plant	2,00,000
2.Current Assets	2,00,000
Total	8,00,000

Indian Limited took over buildings at Rs. 3,00,000, Plant at Rs. 1,40,000 and Stock at Rs. 60,000 . The purchase consideration is to be satisfied by the issue of 8% Preference Shares of Rs. 100 each and Equity Shares of Rs. 10 each in 3:2 ratio.

The Preference Shareholders are to be settled in full by the allotment of new Preference Shares. Sundry debtors realized Rs. 1,50,000 and Rs. 1,10,000 was paid to Sundry Creditors in full settlement (There were no other current assets). Cost of liquidation Rs. 1,000.

Prepare necessary ledger accounts in the books of Bharath Limited. Opening Journal Entries of Indian Limited and its Balance Sheet.

18.

Following are the balances of NSK Ltd as at 31/03/2014. You are required to prepare the final accounts of the company after taking additional information into consideration.

Particulars	Amount (Rs)	Particulars	Amount (Rs)
Premises	30,72,000	Share capital	40,00,000
Plant	33,00,000	12% Debentures	30,00,000
Stock (1/4/2013)	7,50,000	P&L A/c	2,62,500
Debtors	8,70,000	Creditors	7,70,000
Goodwill	2,50,000	Sales	41,50,000
Cash and Bank	4,06,500	General Reserve	2,50,000
Calls in arrears	75,000	Reserve for DD (1/04/2013)	35,000
Interim Dividend	3,92,500
Purchases	18,50,000
Preliminary Expenses	50,000
Wages	9,79,800
General Expenses	68,350
Salaries	2,20,250
Bad Debts	21,100
Debenture interest paid	1,62,000
	1,24,67,500		1,24,67,500

Adjustments:

1. Closing stock is valued at Rs. 10,50,000

2. Depreciate plant at 15%

3. Write off Rs. 5,000 from preliminary expenses.

4. Half yearly debenture interest is due.

5. Write off Rs. 20,000 further bad debts and unused new RDD at 5% on debtors.

6. Transfer Rs. 25,000 to General Reserves.

19.

The following is the Balance Sheet of X ltd as on 31/12/2014

Liabilities	Amount (Rs)	Assets	Amount (Rs)
4,000 6% Preference Shares of Rs. 100 each	4,00,000	Land	2,00,000
2,000 Equity shares of Rs. 100 each Rs. 75 paid up	1,50,000	Plant	5,00,000
6,000 Equity shares of Rs. 100 each, Rs. 60 per share paid up	3,60,000	Patents	80,000
5% Debentures	2,00,000	Stock	1,10,000
Outstanding Debenture Interest	10,000	Debtors Cash	2,20,000 60,000
Creditors	2,90,000	Profit & Loss A/c	2,40,000
	14,10,000		14,10,000

On the date of Balance Sheet the company went into liquidation . The dividends on preference shares are in arrears for 2 years. The arrears are payable on liquidation as per Articles of Association. The Debentures have a floating charge on the assets of the company. Creditors include a loan of Rs. 1,00,000 secured by mortgage of land. The assets realized are as under:

Land Rs. 2,40,000 ;Plant Rs. 4,00,000 ; Patents Rs. 60,000 ; Stock Rs. 1,20,000; Debtors 1,60,000.

The expenses of liquidation amounted to Rs. 21,800. The liquidator is entitled to a commission of 3% on all assets realized including cash and a commission of 2% on the amount distributed to unsecured creditors. Preferential creditors amounted to Rs. 30,000.

Prepare Liquidators final Statement of Account.

20.

The Creditors and Shareholders having agreed upon a scheme of Reconstruction for the Unsound Company Ltd. which went into voluntary liquidation . The Balance Sheet as on 31/12/2014 stood as follows:

Particulars	Amount (Rs)
I. Equity and Liabilities:
1. Shareholders Funds:
25,000 Shares of Rs. 10 each	2,50,000
2. Non-Current Liabilities:
8% Debentures	1,00,000
Depreciation Fund	27,000
3. Other Non-Current Liabilities:
P/L Account	(75,000)
4. Current Liabilities
Trade Creditors	40,000
Total	3,42,000

II. Assets	Amount (Rs)
1. Non-Current Assets:
Goodwill	30,000
Factory Building	95,000
Plant	1,05,000
2. Current Assets:
Stock	50,000
Debtors	60,000
Cash at Bank	2,000
Total	3,42,000

The scheme of reconstruction provided:

(i) That a new company called Sound Ltd to be formed with a share capital of Rs. 5,00,000 in 50,000 shares of Rs. 10 each to take over from the above company stock and debtors at 20% less than the book value, Factory Buildings and Plant at Rs. 77,000 and Rs. 1,00,000 respectively.

(ii) The Debenture holders were to be satisfied by the issue of 9% Mortgage Debentures of Rs. 1,05,000 in Sound Ltd., in exchange for the old Debentures.

(iii) The trade creditors agreed to receive Rs. 35,000 from Sound Ltd., in full satisfaction of their claims.

(iv) The Shareholders agreed to receive 25,000 shares of Rs. 10 each, credited with Rs. 5 per share paid-up, with a call of Rs. 2.50 per share to be made forthwith.

(v) The Bank balance was utilised in payment of reconstruction cost.

Pass necessary journal entries to close the Books of UnsoundLtd. and also the opening entries in the Books of Sound Limited assuming that the call made on the shareholders was duly received.

21.

Briefly explain the following Accounting Standards:

a) Accounting Standard-10

b) Accounting Standard-6

c) Accounting Standard -1.

SECTION – D

IV)

Compulsory question. (15 marks)

22.

a) Prakash Ltd. went into liquidation on 31.12.2014. Following information is available with the liquidator.

Creditors amount to rs.75,660 of which Rs.8,000 are preferential, 6% Debentures having a floating charge on the assets of the company amounted to Rs.80,000. Debentures to be paid interest upto 30.6.2015.

The Assets realised as follows:

Stock Rs.84,000

Plant and Machinery Rs.60,600

Cash in hand stood at Rs.500. Debentures were paid off on 30-6-2015 with interest. Liquidator’s expenses amounting Rs. 1,902 and he is to be given a remuneration at 3% on the amount realised and 2% on the amount distributed to unsecured creditors excluding preferential creditors.

Calculate the amount payable to unsecured creditors.

b) From the following particulars prepare Income statement for the year ending 31^st March 2013.

i) P&L A/c balance from last year Rs.62, 500.

ii) N/P for the year before tax 5,40,000 (provision for tax at 40%)

iii) Transfer to General reserve Rs.52,500, Dividend Equalisation fund 40,000 and development reserve 37,500.

iv)Dividend on 7.5% on preference shares 3,00,000

v) Dividend on 12.5% on 50,000 equity shares of Rs.10/- Rs.7.50 called-up (calls in arrears Rs.13,000).

&&&&&&&&&&&&&&&&&&&&&&&&&&

Latest Govt Job & Exam Updates:

St. Joseph’s College of Commerce B.B.A. 2015 III Sem Corporate Accounting Question Paper PDF Download

View Full List ...