Loyola College B.Com April 2012 Company Accounts Question Paper PDF Download








Date : 21-04-2012              Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00



Answer ALL Questions:                                                                                           (10 x 2 =20 marks)

  1. State the need for underwriting of shares.
  2. Distinguish between ‘Ex-interest’ and ‘cum-interest’ price.
  3. Under what headings will you classify the following items while preparing the Balance sheet of a company :
  4. Preliminary expenses
  5. Bills payable
  6. Provision for tax
  7. Outstanding debenture interest
  8. Explain the term capital reduction.
  9. What is Normal Rate of Return?
  10. 50,000 shares of Rs.10 each are issued at a premium of 10%, the full amount of shares will be paid in one lump sum.
  11. Sadan Ltd. issued 20,000 equity shares of Rs.10 each at par.  The issue was underwritten for maximum remuneration permissible by law.  The public applied for and received 16,000 shares.  Calculate the commission payable to the underwriter.
  12. Forex Ltd. issued 2000,12% debentures of Rs. 100 each at a discount of 5% , repayable at a premium of 10% . Give the appropriate journal entry.
  13. Calculate managerial remuneration, assuming there are two whole time directors, a part time director and manager from the details given below :

Net profit before provision for income tax and managerial remuneration but after depreciation Rs.8,70,410.

Depreciation provided in the books Rs.3,10,000 and allowable depreciation is Rs.2,60,000.

  1. 5,000 equity shares of Rs.10 each are reduced to fully paid shares of Rs.6 each. Show the effect of the above in the books of the company.


    Answer any FIVE Questions:                                                                                (5 x 8 =40 marks)


  1. Explain the different kinds of ‘Alteration of share capital’ which do not require approval of court of law.
  2. What is ‘Statement of affairs’? How is it prepared?
  3. Describe the method of dealing with ‘unmarked applications’ in relation to an underwriting contract.
  4. Axe Ltd. issued 40,000 shares of Rs.10 each at a premium of Rs.2 per share.  The shares were payable as follows : Rs.2 on application, Rs.5 on allotment (including premium)and Rs.5 on first and final call.  All the shares were applied for and allotted.  All moneys 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 Rs.8 per share.  Give the necessary journal entries.
  5. Irone Ltd was incorporated on July 31, 2010 to purchase the business of Rode Ltd. as on April1,2010. The books of accounts disclosed the following on March31,2011.
  6. Sales for the year Rs.32,10,400 (1st April1 –31st July ,2010 Rs.8,02,600, 1st August to 31st March  24,07,800)
  7. Gross profit for the year Rs.4,12,800, managing director’s salary Rs.12,000, preliminary expenses written off Rs.18,000, company secretary’s salary 58,000.
  8. Bab debts written off Rs.14,890. (prior to 31st July Rs.4,020 and after Rs.10,870)
  9. Depreciation on machinery Rs.25,200, general expenses Rs.51,000, Advertising Rs.7,400, Interest on debentures Rs.20,000.

You are required to prepare a statement showing the Pre-incorporation and Post-incorporation profits.


  1. The Balance sheet of Skey Ltd.as on 31st2010 is as follows :

Liabilities                    Rs.                               Assets                          Rs.

Share Capital:

15,000 equity shares of

Rs.100 each fully paid                        15,00,000                    Land& Buildings          6,60,000

Profit and loss account              3,09,000                   Plant & Machinery        2,85,000

Sundry creditors                        2,31,000                   Stock                           10,50,000

Bank overdraft                              60,000                   Sundry Debtors             4,65,000

Provision for taxation                1,35,000

Dividend equalization fund       2,25,000

___________                                                    ___________

24,60,000                                                          24,60,000

___________                                                     __________

The net profit of the company after deducting all working charges and providing for depreciation and taxation were as under :

2006 – Rs.2,25,000 ;   2007 – Rs.2,88,000;    2008 – Rs.2,70,000;  2009 – Rs.3,00,000;  2010 – Rs.2,85,000

On 31st December 2010, land and buildings were valued at Rs.7,50,000 and Plant and machinery at Rs.4,50,000.

10% is considered as the reasonable return on capital.

Calculate the value of the company’s shares after taking into account the revised values on fixed assets and goodwill  based on four years purchase of the annual super profits.


  1. The financial position of Axe Ltd. on 1st April 2010 and 31st March 2011 was as follows :

Liabilities                                                        1.4.2010(Rs.)              31.3.2011(Rs.)

Current liabilities                                             72,000                                     82,000

Loan from associate company                        –                                               40,000

Loan from bank                                              60,000                                     50,000

Capital and Reserves                                   2,96,000                                  2,98,000


 Assets                                                         1.4.2010                              31.3.2011

Cash                                                                8,000                                         7,200

Debtors                                                         70,000                                       76,800

Stock                                                             50,000                                       44,000

Land                                                              40,000                                       60,000

Building                                                     1,00,000                                    1,10,000

Machinery                                                  2,14,000                                    2,44,000

Provision for depreciation                           (54,000)                                    (72,000)


During the year Rs.52,000 was paid as dividends .  Prepare Cash Flow Statement as per

AS-3 .

  1. The Balance sheet of Yee Ltd. as on 31st2010 disclosed the following information :

15% Debentures                                  Rs.8,00,000

Debenture Sinking Fund                          3,40,000

Debenture Sinking fund investment represented by Rs.80,000 own Debentures purchased at 98 and the remaining amount by Rs.2,80,000 4% stock.

On the above date , directors redeemed all the debentures . For this purpose, they realized 4% stock at par.  They utilized Rs.1,20,000 for redemption out of current year’s profits.  You are required to give journal entries.



    Answer any TWO Questions:                                                                              (2 x 20 =40 marks)

  1. Bigge Ltd. has a nominal capital of Rs.6,00,000 divided into shares of Rs.10 each. The following Trial Balance is extracted from the books of the company as on 31st December 2010.

Calls in arrear                                  7,500       6% Debentures                        3,00,000

Premises (Rs.60,000 added                            Profit and loss account              14,500

On 1.7.2010)                              3,60,000       Creditors                                    50,000

Machinery                                  3,00,000       General reserve                          25,000

Interim dividend paid                    7,500       Share capital (called up)          4,60,000

Purchases                                   1,85,000       Bills payable                               38,000

Preliminary expenses                       5,000       Sales                                        4,15,000

Freight                                           13,100       Provision for bad debts                3,500

Director’s fees                                 5,740

Bad debts                                        2,110

4% government securities             60,000

Stock (1.1.2010)                           75,000

Furniture                                         7,200

Sundry Debtors                             87,000

Goodwill                                       25,000

Cash                                                   750

Bank                                               39,900

Wages                                            84,800

General expenses                           16,900

Salaries                                           14,500

Debenture interest                            9,000

_________                                                    _________

13,06,000                                                      13,06,000

__________                                                   __________

Prepare final accounts for the year ending 31st  December 2010 in the prescribed form, after taking into account the following adjustments :

  1. Depreciate machinery by 10% and furniture by 5%
  2. Write off half of the preliminary expenses
  3. Wages include Rs.10,000 paid for the construction of a compound wall to the premises and no adjustment was made.
  4. Provide 5% for bad debt on sundry debtors
  5. Transfer Rs.10,000 to general reserve.
  6. Provide for income tax Rs.25,000
  7. Stock on 31st December was Rs.1,01,000.



  1. Neo Company  was formed on 1st January 2010 with an authorized capital of Rs.7,00,000 divided into 50,000 equity shares of Rs.10 each and 2,000 preference shares of Rs.100 each to acquire the business of Wilson as a going concern. The Balance sheet of Wilson at 31st December 2010 is given below :

Liabilities                        Rs.               Assets                                                   Rs.

Sundry creditors           7,500             Cash at bank                                         3,800

A’s Loan account        15,500             Sundry debtors                                     9,700

Wilson’s capital       1,57,000              Stock                                                   36,000

Furniture                                               3,500

Plant and machinery                           70,000

Land and Buildings                            57,000

_________                                                                   _________

1,80,000                                                                       1,80,000

__________                                                                 __________

The purchase consideration was to be discharged by the issue of 15,000 equity shares of

Rs.10 each, 500 preference shares of Rs.100 each and Rs.20,000 in cash.  Neo Co. also

agreed to discharge the sundry creditors but declined to accept A’s loan.  All the assets of

the old company  were taken over at their balance sheet values except stock which was

valued at Rs.40,000. A provision of 5% was also created against sundry debtors.

To provide necessary working capital and to pay the purchase consideration the

remaining equity shares were issued at a premium of 10% and all cash was duly received.

The preliminary expenses amounting to Rs.15,000 were paid by the company

immediately after the issue.

Show the opening entries in the books of the  Neo Company Ltd. and also the opening

Balance sheet.


  1. King Ltd. went into voluntary liquidation on 31st December 2010 when their Balance sheet read as follows :

Liabilities                    Rs.                   Assets                          Rs.

Issued and subscribed capital :                                   Land and Buildings      7,50,000

15,000 10% cumulative preference                             Plant and machinery   18,75,000

Shares of Rs.100 each fully paid        15,00,000        Patents                                      3,00,000

7,500 equity shares of Rs.100                                     Stock                             4,02,500

Each,, Rs.75 paid                                  5,62,500       Sundry Debtors             8,25,000

22,500 equity shares of Rs.100                                   Cash at bank                 2,25,000

Each, Rs.60 paid                                 13,50,000        Profit and loss account 8,53,750

15% debenture secured by a

Floating charge                                     7,50,000

Interest outstanding on debentures      1,12,500

Creditors                                               9,56,250

________                                         _________

52,31,250                                         52,31,250

________                                         _________

Preference dividends were in arrears for 2 years and the creditors included preferential

creditors of Rs.38,000.

The assets were realized as follows :

Land and buildings     Rs.9,00,000, Plant and machinery      Rs.15,00,000, Patents

Rs.2,25,000, Stock   Rs.4,50,000, Sundry debtors     Rs.6,00,000.

The expenses of liquidation amounted to Rs.27,250.

The liquidator is entitled to a commission of 3% on assets realized except cash.

Assuming the final payments including those on debentures were made on 30th June

2010,  Show the liquidator’s final statement of accounts.


Go To Main page

Loyola College B.Com Nov 2012 Company Accounts Question Paper PDF Download








Date : 03/11/2012             Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00



Answer All Questions:                                                                                              (10 X 2 = 20 marks)


  1. Explain the term ‘Firm Underwriting’.
  2. What is call money? What is the maximum amount of a call according to table A.?
  3. What do you understand by redemption of debenture out of profits.?
  4. What are ‘divisible profit’?
  5. Write a note on ‘pre – incorporation profit’.
  6. How do you calculate ‘Average capital employed’?
  7. 5,000 Equity shares of Rs 100 each reduced to Rs 75 each and 1000 preference shares of Rs 50 each is reduced by Rs 25 Pass Journal entries.
  8. Amount needed after 5 years for debenture redemption is Rs 60,00,000. Rate of interest on investment expected is 5% Annual investment needed to get Rs 15 after 5 years, Rs 2.71462. Ascertain the annual transfer to sinking fund.
  9. Padma co.Ltd was formed for taking over the business of Mr. Ganapathi. The purchase consideration was Rs 1,92,000 which will be settled by issue 960 shares of Rs 100 each at a discount of 5% and balance in cash. Assets taken over were Rs 2,08,000 and liabilities taken over were Rs 28,000. Give journal entries in the books of padma co.Ltd.
  10. Calculate Net profit before tax and Extra ordinary items. P&L a/c balance on 31/03/10:

Rs. 10,00,000 and on 31/03/11 Rs 11,00,000 Transfer to General Reserve Rs.10,000,

Proposed Dividend Rs. 25,000,  Provision for taxation Rs. 40,000.




Answer any FIVE questions:                                                                                     (5 x 8 = 40 marks)


  1. What is ‘acquisition of Business’? Explain the methods of computing purchase consideration on acquisition of business.
  2. Explain the Provisions Under sec 78 of the companies Act for the use of share premium.
  3. Explain the circumstances under which valuation of shares is essential and discuss the various methods of valuation.
  4. WYE Co.Ltd. issued 20,000 shares of Rs.10 each. These shares were underwritten as follows:

X: 10,000 shares,     Y: 6,000 shares.  The public applied for 16,000 shares which included market application as follows:-     X: 2,400 shares;     Y: 600 shares.

Determine the obligating of the underwriters.

  1. Ltd issued 2,000 12% Debentures of Rs.100 each on 1.1.2008 at a discount of 10%, redeemable at premium of 15% in equal annual drawings in two years out of profits. Give journal entries both at the time of issue and redemption of debentures.   (ignore the treatment of loss on issue of debentures and interest).
  2. From the following Profit & Loss Account of Soundarya Ltd. For the year ended 31.12.2010 and additional data given, calculate commission due to managing director at 5% of net profit.  Salary of managing director is to be treated as part payment of the commission.

Profit & Loss A/c  of the year ended 31.12.2010.

  Rs.   Rs.
To opening stock 11,000 Pay sales 1,70,000
To Bonus (including Rs.500 for 2009) 5,000 By closing stock 15,000
To Director’s fees 3,000 By other income:


To Managing director:






Profit sale of fixed assets 1,000
To Development rebate reserve 800    
To provision for Tax 3,000    
To Establishments Expenses 40,000    
To Loss on sale of investments 200    
To Net profit c/d 1,22,000    
  1,88,000   1,88,000

The book value of the fixed assets sold was Rs.2,000 and their original cost was Rs.2,600.


  1. A company was incorporated on 1st May 2010 acquiring the business of a sole trader with effect from 1st January 2010. The accounts of the company were closed for the first time on 30th September 2010, disclosing a gross profit of Rs.1,68,000.  The establishment expenses were Rs.42,660. Directors’ fees Rs.3,000 per month, preliminary expenses written off Rs.4,000, rent upto  June, 2010 was Rs.300 per month which was there after increased to Rs.750 per month.  Salary to the manager was at Rs.1500 per month who was appointed a director at the time of incorporation of the company.

Prepare a statement showing profits prior and subsequent to incorporation assuming that the net sales were Rs.24,60,000.  The monthly average of which for the first four months of 2010 was half of that of the remaining period.

  1. From the following information, calculate the value of good will on the basis of 3 years purchase of super profit.
  • Average capital employed in the business is Rs.20,00,000.
  • Rate of interest expected from capital having regard to the risk involved is 10%.
  • Net trading profits of the firm for the past three years were Rs.3,50,400; Rs.2,80,300; and Rs.3,10,100.
  • Fair remuneration to the partners for their services is Rs,48,000 p.a.
  • Sundry assets of the firm are Rs.23,50,400 and current Liabilities are Rs.95,110.



Answer any TWO questions:                                                                                   (2 x 20 = 40 marks)


  1. Swan ltd., issued 8,000 9% Redeemable preference shares of Rs.100 each at par 1.7.2004, redeemable at the option of the company on or after 30th June 2010, partly or fully.

Redemption were made out of profit as follows:

  • 1,200 shares on 30th June 2010 at par.
  • 1,600 shares on 31st December 2010 at 10% premium.
  • Remaining shares 30th June 2011 at a premium of 5% by making a fresh issue of 40,000 equity shares of Rs.10 each at premium of Re.1 each,

On 30th June 2011, the company also decided to capitalize 50% of its Capital redemption reserve by issuing bonus shares of Rs.10 each fully paid at a premium of Rs.2.50 per share.   Pass necessary entries to record the above transactions.

  1. The Silver Ore co.ltd. was formed on 1.4.2007 with an authorized capital of Rs.6,00,000 in shares of Rs.10 each of these 52,000 shares had been issued and subscribed but there was calls in arrear on 100 shares.  From the following trial balance as on March 31, 2008, Prepare the Trading and Profit & Loss Account and the Balance sheet:
  Rs.   Rs.
Cash at bank 1,05,500 Share Capital 5,18,750
Plant 40,000 Sale of Silver 1,79,500
Mines 2,20,000 Interest on F.D. up to Dec.31 3,900
Promotion expenses 6,000 Dividend on Investment 3,200
Advertising 5,000    
Cartage on plant 1,800    
Furniture & Buildings 20,900    
Administrative Expenses 28,000    
Repairs to plant 900    
Coal and oil 6,500    
Royalties paid 10,000    
Railway Track & wagons 17,000    
Wages of miners 74,220    
Cash 530    
Investment – shares of tin mines 80,000    
Brokerage on above 1,000    
6% FD in syndicate bank 89,000    
  7,06,350   7,06,350


  • Depreciate plant and Railways by 10% . Furniture & building by 5%
  • Write off a third of the promotion expenses.
  • Value of silver ore of march 31, 2008 Rs.15,000.
  • The directors forfeited on Dec. 20, 2007, 100 shares on which only Rs.7.50 had been paid.


  1. Knight co.ltd went into voluntary liquidation on 31.12.2010 when their balance sheet read as follows:
Liabilities Rs. Assets Rs.
Issued & subscribed capital: 15,000 10% cumulative preference shares of Rs.100 each fully paid 15,00,000 Land  & Buildings 7,50,000
7,500 Equity shares of Rs.100 each Rs.75 paid 5,62,500 Plant & Machinery 18,75,000
22,500 equity shares of Rs.100 each Rs.60 paid 13,50,000 Patents 3,00,000
15% debenture secured by a floating charge 7,50,000 Stock 4,02,500
Interest outstanding on debentures 1,12,500 Sundry debtors 8,25,000
Creditors 9,56,250 Cash at bank 2,25,000
    Profit & Loss a/c 8,53,750
  52,31,250   52,31,250

Preference dividends were in arrears for 2 years and the creditors included Preferential creditors of Rs.38,000.

The assets were realized as follows:  land & Buildings Rs.9,00,000; Plant & machinery Rs.15,00,000; patents Rs.2,25,000; Stock Rs.4,50,000; Sundry debtors Rs.6,00,000.


The expenses of liquidation amounted to Rs.27,250.  The liquidator is entitled to a commission of 3% on assets realized except cash.  Assuming the final payments including those on debentures were made on 30.6.2011, show the liquidator’s final statement of account.

 Go To Main Page

© Copyright Entrance India - Engineering and Medical Entrance Exams in India | Website Maintained by Firewall Firm - IT Monteur