Loyola College B.B.A. Business Administration April 2008 Company Accounts Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

RO 31

 

FOURTH SEMESTER – APRIL 2008

BU 4502 – COMPANY ACCOUNTS

 

 

 

Date : 26/04/2008                Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

PART A          (Answer all the questions)                      (10 x 2 = 20)

                       

  1. What is over subscription?
  2. What is meant by firm underwriting?
  3. How do you apportion the following expenses while ascertaining profits prior to incorporation:  Insurance, carriage outwards, director’s fee, preliminary expenses.
  4. Briefly explain calls in arrears and calls in advance.
  5. What are contingent liabilities? Give any 2 examples.
  6. A company issued 1000 8% debentures of Rs 100 each at a discount of 5% redeemable at a premium of 10%. Pass journal entry.
  7. How is provision for tax treated in the final accounts of a company?
  8. Write a note on capital redemption reserve.
  9. From the following information calculate the minimum fresh issue of shares. Redeemable Preference shares 400000, premium on redemption 10%. Divisible profits available Rs 80000. Fresh issue of equity shares of Rs. 10 each is to be made at 25% premium.
  10. B Ltd. Has 60000 equity shares of Rs.100 each, Rs.80 per share called up. The company decided to pay off Rs.20 per share of the paid up capital and at the same time to reduce the Rs.100 share to Rs. 60 share fully paid up by canceling the unpaid amount. Give journal entries.

 

                                                     PART B (answer any five questions only)                        5 x 8 = 40

           

 

  1. Explain the need for valuation of shares and the factors affecting the value of shares.
  2. What is capital reduction? What are the provisions of the companies act with regard to reduction of share capital?
  3. Explain the provisions relating to redemption of redeemable preference shares.
  4. B ltd. Issued 10000 shares of Rs.100 each. The entire issue was underwritten as follows. A 50%, B 30%, and

C 20%. In addition there was firm underwriting as follows. A 1000 shares, B 750 shares, and C 500 shares. The total subscription including firm underwriting was 8000 shares and the subscription included the following marked applications. A 1500, B 2000 and C 750. Find the liability of the underwriters.

  1. Average capital employed in K ltd. Is Rs 35,00,000 net trading profits before tax for the last 3 years were Rs 14,75,000 Rs 14,55,000 Rs 15,25,000.  In these 3 years the M.D. was paid a salary of Rs.10,000 pm. But now he would be paid a salary of Rs 12,000 pm. Normal rate of return is 18% , rate of tax is 50%. Calculate goodwill on the basis of 3 years purchase of super profits.
  2. On 1.10.2004 a company issued 10000 14% debentures of Rs.100 each (interest payable on 30th September  and 31st march) the company is allowed to purchase own debentures for immediate cancellation. On 31st August 2005 it purchased 1000 debentures at Rs. 98 ex interest and on 31st December 2006, 500 debentures at Rs.97 cum interest. Pass journal entries.

 

  1. The following particulars relate to a company which went into voluntary liquidation.

Preferential creditors Rs. 600, secured creditors Rs.20,000(securities realised Rs.25,000) unsecured creditors Rs.30,500. The assets realized Rs 26,000(excluding securities) the expense of the liquidation were Rs. 252 and the liquidators remuneration was agreed at 3% on the amount realized and 1.5% on the amount paid to unsecured creditors. Show the liquidators final statement of accounts.

 

  1. Z  ltd was incorporated. On 1.7.05 to acquire a running business of Y with effect from 1.1.05. The following was the profit and loss account of the year ending 31.12.05.

 

Particulars Rs. particulars Rs
To. Office expenses 1,08,000 By gross profit 4,50,000
To. formation exps 20,000
To stationary 10,000
To selling expenses 1,20,000
To directors fees 40,000
To Net profit 1,52,000
  4,50,000   4,50,000

 

Prepare a statement showing profits earned by the company in the pre and post incorporation periods. The total sales for the year took place in the ratio of 1:2 before and after incorporation respectively.

 

 

PART C (answer any two questions only)                            2 x 20 = 40

  1. The following is the balance sheet of united industries ltd. On 31.3.06.

 

Liabilities Rs. Assets Rs.
Share capital Goodwill 45,000
6000 6% pref sh of Rs. 100 each 6,00,000 Land and building 6,00,000
12000 equity shares of Rs 100 each 12,00,000 Plant 9,00,000
8 % debentures 3,00,000 Stock 1,30,000
Bank over draft 3,00,000 Debtors 1,40,000
Sundry crs. 1,50,000 Cash 15,000
P &L a/c 7,00,000
Preliminary exps 20,000
  25,50,000   25,50,000

 

              On the above date the company adopted the following scheme of reconstruction.

  • The equity shares are to be reduced to shares of Rs 40 each fully paid and the preference shares to be reduced to fully paid shares of Rs 75 each.
  • The debenture holders took over stock and debtors in full satisfaction of their claims.
  • Land and buildings to be appreciated by 30% and plant to be depreciated by 30%.
  • The fictitious and intangible assets to be eliminated.
  • Expenses of reconstruction amounted to Rs 5000.

Give journal entries incorporating the above scheme of reconstruction and prepare the reconstructed balance sheet.

 

  1. The Beta co. was registered with a capital of Rs 6,00,000 in equity shares of Rs. 10 each. The following is the list of balances extracted from its books on 31.3.07

 

Particulars Amount Particulars Amount
Wages 84,865 Freight 13,115
Calls in arrears 7,500 Salary 14,500
Plant and machinery 3,30,000 Directors fee 5,725
Premises 3,00,000 Bad debts 2,110
Interim dividend 37,500 Debentures 9,000
Opening Stock 75,000 capital 4,00,000
Fixtures 7,200 6% debentures 3,00,000
Sundry debtors 87,000 P & l a/c (cr) 14,500
Goodwill 25,000 Bills payable 38,000
Cash in hand 750 Sundry crs. 50,000
Bank 39,900 Sales 4,15,000
Purchases 1,85,000 General reserve 25,000
Preliminary exps 5,000 Bad debts reserve 3,500
General exps 16,835

 

Prepare trading and profit and loss account and balance sheet in proper form after making the following adjustments.

  • Depreciate plant and machinery by 10%.
  • Write off Rs. 500 from preliminary expenses.
  • Provide half years debenture interest due.
  • Bad and doubtful debts reserve at 5%.
  • Stock on 31.3.07 was Rs. 95,000.
  1. From the following Balance sheet prepare cash flow statement.

 

liabilities 31.12.06

Rs

31.12.07

Rs

Assets

Rs

31.12.06

Rs

31.12.07

Rs

Creditors 36,000 41,000 Cash 4,000 3,600
Bank loan 60,000 45,000 Debtors 35,000 38,400
Share Capital 1,00,000 1,20,000 Stock 25,000 22,000
Profit and loss 18,000 29,000 Land 20,000 30,000
Buildings 50,000 55,000
machinery 80,000 86,000
2,14,000 2,35,000   2,14,000 2,35,000

 

  • Dividend paid during the year 2007 Rs 20,000
  • Depreciation provided on machinery Rs 10,000
  • During the year machinery whose book value is Rs 8000 was sold for Rs 5,000.

Go To Main page

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

       LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

JQ 09

FOURTH SEMESTER – April 2009

BU 4502 – COMPANY ACCOUNTS

 

 

 

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

profits.

 

                                       

 

                                                   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.

 

 

Go To Main Page

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