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








Date : 24-04-2012              Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00




Answer ALL questions:                                                             (10×2=20 marks)


  1. Distinguish between Firm underwriting and Pure underwriting.


  1. Mention two purposes for which share premium can be used.


  1. What is a Contingent liability? Give an example.


  1. Distinguish between sub division and consolidation of share.


  1. What is a vendor’s suspense account?


  1. Pass the entries at the time of issue and redemption for the following transaction:

Issued 1000 9% debentures of Rs.100 each at 10% discount, redeemable at 5% premium.


  1. Unsecured creditors at the time of liquidation amounted to Rs.39,500. Liquidator is entitled to 2% commission on amount paid to unsecured creditors.

Calculate the commission payable if the amount available before paying unsecured creditors is  (a) Rs.40,000  (b) Rs.60,000.


  1. A Ltd issued 5000 equity shares of Rs.10 each at par. 80% of the issue was underwritten by X for a commission of 2%. Applications were received for 3500 shares. What is the liability of X in terms of number of shares he has to take up and in terms of Rupees he has to pay to the company.


  1. X Ltd had the following balances in its books:

Redeemable Preference share capital                     Rs.2,00,000

Securities premium                                              Rs.15,000

General reserve                                                  Rs.90,000

Preference shares are redeemable at 10% premium. Calculate the minimum number of equity shares of RS.10 to be issued at 5% premium to redeem the preference shares.


  1. X Ltd forfeited 100 shares of Rs.10 each, issued at 10% discount for failure to pay the final call of Rs.2.

80 shares are reissued at Rs.7 fully paid.

Pass forfeiture and reissue entries.




Answer ANY FIVE questions:                                                     (5×8=40 marks)


  1. Explain the various methods used to value shares of a Joint Stock Company.


  1. List out the preferential creditors at the time of liquidation of a company.





  1. The following scheme of reconstruction has been approved for B Ltd:
  2. i) The shareholders to receive in lieu of their present holding of 60,000 shares of Rs.10 each fully paid, the following:
  3. a) fully paid equity shares, equal to one third of their holding.
  4. b) 8% preference shares fully paid, equal to one fifth of the above new

equity shares.

  1. c) Rs.60,000 8% debentures.
  2. ii) Debenture holders total liability of Rs.75,000 is to be reduced to Rs.25,000. This will be satisfied by the issue of 2500 8% preference share of Rs.10 each, fully paid.

iii)     Goodwill is to be written down by Rs.2,50,000, Machinery by Rs.25,000 and the balance in the scheme to be used to write down premises.

  1. iv) Company issued Rs.50,000 6% debentures for cash.

Journalize the above transactions.


  1. X Ltd was incorporated on 1/5/2011 to take over a business on 1/1/2011.

The first accounts were drawn up to 30/9/2011, which included the following details:

Gross profit Rs.56,000; General expenses Rs.14,220; Director’s fees Rs.5,000; Preliminary expenses Rs.1500; Rent up to 30/6/2011 was Rs.1200 per annum, after which it was increased to Rs.3,000 per annum. Salary of Manager was Rs.6,000 per annum. He was made a Director on date of incorporation and thereafter his remuneration was included in the Director’s fees given above.

The purchase consideration of Rs.1,00,000 was settled on 1/7/2011 along with interest at 12% per annum.

The monthly average of sales for the first four months of 2011 was one half of that of the remaining period.

Calculate profit before and after incorporation.


  1. B Ltd has Rs.3,00,000 12% debentures on 1/4/2011. Interest is payable on 31st March each year.

On 1/5/2011 Rs.20,000 own debentures are purchased at Rs.94 cum interest and immediately cancelled.

On 1/8/2011 Rs.50,000 own debentures were purchased at Rs.95 (ex interest) and held as investment.

On 1/12/2011 Rs.60,000 own debentures were purchased at Rs.96 cum interest and held as investment.

On 31/3/2012 all the own debentures held as investments were cancelled.

Show Journal entries in the books of the Company.


  1. H Ltd had 10000 equity shares of Rs.10 each fully paid and 5000 7% redeemable Preference shares of Rs.10 each fully paid, redeemable at a premium of 10%. It had a credit balance of Rs.40,000 in P/L and Rs.50,000 in General Reserve.

The company resolved to redeem the Preference shares, for which purpose it issued 3000 equity shares of Rs.10 each at Rs.12 per share.

Subsequently the company made a bonus issue of 1 share for every 2 held.

Pass necessary Journal entries.


  1. H Ltd issued 60000 shares which were underwritten as follows:

X – 30000 shares, Y – 18000 shares and Z – 12000 shares.

In addition there was a firm underwriting as follows:

X – 3000 shares, Y- 1500 shares and Z – 4500 shares.

Total subscriptions received, including firm underwriting, were for 45600 shares.


The applications included the following marked forms:

X – 9000 shares, Y – 13500 shares and Z – 5,100 shares

Show the liability of each underwriter when,

  1. a) firm underwriting is treated as marked forms.
  2. b) firm underwriting is treated as unmarked forms.


  1. The average capital employed by K Ltd is Rs.35,00,000, whereas the net trading profits before tax for the last three years have been Rs.14,75,000, Rs.14,55,000 and Rs.15,25,000.

During these three years the Managing Director was paid a salary of Rs.10,000 per month. But now he would be paid a salary of Rs.12,000 per month. The normal rate of return expected in the industry to which K Ltd belongs is 18%. Tax rate is 50%.

Calculate Goodwill on the basis of three years purchase of super profits.




Answer ANY TWO questions:                                                  (2×20=40 marks)


  1. A Ltd invited applications for 2,00,000 shares of Rs.10 each at a premium of Rs.5 per share payable as follows:

On application  Rs.2.50 per share

On allotment Rs.7.50 per share (including premium)

On first call Rs.4 per share

On final call Rs.1 per share

Applications were received for 3,00,000 shares and allotment was made pro-rata to the applicants of 2,40,000 share – the remaining applications being refused. Excess application money was adjusted to allotment.

X who was allotted 4000 shares failed to pay the allotment and first-call money and his shares were forfeited.

Y the holder of 6000 shares failed to pay the two calls and his shares were also forfeited.

All these shares were sold to Z at Rs.8 per share, fully paid.



  1. a) A Ltd went into liquidation on 31/12/2011, on which date his liabilities stood as follows:

10000 equity shares of Rs.10 each fully paid            Rs.1,00,000

10000 equity shares of Rs.10 each, Rs.8 paid up      Rs.80,000

Preferential creditors                                            Rs.30,000

Unsecured creditors                                             Rs.1,40,000

12% debentures                                                  Rs.1,00,000

Assets realised                                                    RS.4,00,000


Liquidation expenses were Rs.10,000

Liquidator is entitled to 5% commission on amounts paid to unsecured creditors and 10% commission on amounts repaid to shareholders.

Debenture holders were paid on 31/3/2011.

Prepare liquidators final statement of account.


  1. b) From the following data prepare a Cash flow statement as per AS3 and ascertain the cash and cash equivalents as on 31st March 2010:

Cash and cash equivalents on 1st April 2009 Rs.40,000

Sale of machinery during the year Rs.20,000 (loss on sale Rs.4,000)

Depreciation provided on machinery Rs.15,000

Machinery purchased during the year Rs.1,45,000

Investments costing Rs.30,000 was sold at a profit of Rs.5,000


Increase in equity capital during the year Rs.1 lakh

IDBI loan repaid Rs.60,000

Interest paid on loan Rs.9,000

Debentures issued during the year Rs.50,000

Dividend received on investments Rs.2,000

Income tax paid Rs.30,000

Profit before tax Rs.60,000

Increase in creditors Rs.8,000

Decrease in debtors Rs.6,000

Increase in stock Rs.5,000


  1. The following Trial Balance is extracted from the books of XYZ Ltd on 31/12/2011

Particulars                                  Debit         Credit

Rs.            Rs.

Furniture and fittings                        6,400        –

Machinery                                  1,37,500        –

Equity Share Capital Rs.10 each           –         1,22,000

P/L balance on 1/1/2011                     –            11,000

Bad Debts                                       2,000       –

Sundry Debtors and Creditors          38,000      25,000

Stock on 1/1/2011                         34,600        –

Purchases and Sales                      56,000    1,55,000

12% debentures                                 –                   25,000

Advertising                                     4,500        –

Calls in arrears                                2,000        –

Commission                                       –                  12,000

Cash                                               6,500         –

Taxes and Insurance                       12,500        –

Salaries                                       40,000        –

Bills receivable and payable             20,000      10,000

———   ———-

3,60,000 3,60,000


  1. Stock on 31.12.2011 was Rs.33,250.
  2. Depreciate machinery @ 5%, Furniture @ 10%.
  • Debentures were issued on 1st July 2011.


  1. One-half of commission received is in respect of work to be done next year.
  2. Write off further Rs.1,000 as bad debts and provision for bad debts is to be made at 5% on Sundry Debtors.
  3. Prepaid insurance Rs.250 and outstanding salaries are Rs.300
  • Directors propose 10% dividend on equity shares, subject to 10% dividend tax.
  • Provide Income tax at 50%

Prepare Trading and Profit and Loss account for the year ending 31.12.2011 and a Balance sheet as on that date.



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