Loyola College B.Com Corporate & Secretaryship April 2008 Company Accounts Question Paper PDF Download

October 23, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

GF 9

FOURTH SEMESTER – APRIL 2008

BC 4502 – COMPANY ACCOUNTS

Date : 26-04-08 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

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

What is minimum subscription?
What is meant by underwriting?
Write a note on capital redemption reserve.
How do you apportion the following expenses while ascertaining profits prior to incorporation: Depreciation, advertisement, director’s fee, preliminary expenses.
Briefly explain consolidation and subdivision of shares with an example.
What is interim dividend?
A company forfeits 100 shares of Rs 10 each, issued at Rs 11 per share. The premium was payable on allotment. The shareholder failed to pay the allotment money of Rs.3 per share and second and final call of Rs 5 per share. Pass the journal entry.
A company issued 1000 8% debentures of Rs 100 each at a discount of 5%, redeemable at a premium of 10%. Pass journal entry.
How is provision for tax treated in the final accounts of a company?
The following extract from the balance sheet of G and Company Limited as on 31^st December 1997 is given to you Rs.

Share capital:

200000 equity shares of Rs.10 each 20,00,000

300000 6% redeemable preference shares of Rs 10 each 30,00,000

Capital reserve 15,00,000

General reserve 9,00,000

Profit and Loss account 25,50,000

The company exercises its option to redeem the preference shares on 1.1.98. The company has sufficient cash. Give journal entries to record the redemption.

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

On 1.1.92 a company issued Rs 20,00,000 7% debentures at 5 % discount repayable in five years at par. The company reserved the right to redeem to the extent of Rs 2,00,000 in any year by purchase in the open market. The interest was payable half-yearly on 30^th June and 31^st December and the same was duly paid.

On 31^st December 1992, the company purchased Rs 200000 debentures at a cost of Rs. 1,91,000. Pass necessary journal entries in the books of the company up to 31^st December 1992 including closing entries on that date if the above redemption was out of profit.

F ltd issued 60000 shares which were underwritten as follows.

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

In addition there was firm underwriting as follows.

X – 3000 shares Y – 1500 shares Z – 4500 shares.

The total subscription including firm underwriting were 45600 shares. The following marked form were included in the subscription

X – 9000 shares Y – 13500 shares Z – 5100 shares.

Show the allocation of liabilities of each underwriter if the benefit of firm underwriting is given to individual underwriters by treating them like marked forms.

Distinguish between debentures and shares.
What is capital reduction? What are the provisions of the companies act with regard to reduction of share capital?
Explain the provisions relating to redemption of preference shares.
The following particulars are available in respect of the business carried on by Mitra.

Capital invested 50000
Trading results

1994 profit 12200

1995 profit 15000

1996 loss 2000

1997 profit 21000

Market rate of interest on investment 8%
Rate of risk return on capital invested in business 2%
Remuneration from alternative employment of the proprietor( if not engaged in business) 3600 per annum

Compute the value of good will of the business on the basis of 3 years purchase of super profits taking average of last four years.

S limited was incorporated on 1.7.98 and received its certificate of commencement of business on 1.8.98. the company bought the business of m/s p and co. with effect from 1.3.98. from the following figures relating to the year ending 31^st March 99, find out the profits before and after incorporation.

Sales for the year were Rs. 6,00,000 out of which sales upto 1.7.98 were 250000
Gross profit for the year was Rs 1,80,000
The expenses debited to profit and loss account were:

particulars	Rs	Particulars	Rs
Rent	9,000	General expenses	4,800
Salary	15,000	Advertising	18,000
Directors fees	4,800	Stationery	3,600
Interest on debentures	5,000	Commission on sales	6,000
Audit fees	1,500	Bad debts(Rs 500 relate to debts prior to incorporation)	1,500
Discount on sales	3,600	Interest to vendor on purchase consideration up to 1.9.98	3,000
depreciation	24,000

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

Preferential creditors Rs 25000, unsecured creditors Rs.58,000, 6% debentures Rs.30,000.

The assets realized Rs 80,000. The expense of the liquidation were Rs 1500 and the liquidators remuneration was agreed at 2.5% on the amount realized and 2% on the amount paid to unsecured creditors including preferential creditors. Show the liquidators final statement of accounts.

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

A Limited issued a prospectus inviting applications for 200000 shares of Rs 10 each at a premium of Rs 5 per share payable on application Rs 2.50 per share, allotment Rs 7.50, (including premium) on first call Rs 4, and on final call Re 1 per share. Applications were received for 300000 shares and allotment was made on pro-rata to the applicants of 240000 shares, and the remaining applications being refused. David to whom 4000 shares were allotted failed to pay the allotment money and on his failure to pay the first call his shares were forfeited. Madan the holder of 6000 shares failed to pay the two calls and his shares were forfeited all these shares were sold to Robert at Rs 8 per share fully paid. Pass journal entries.
From the following balance sheets of X Limited prepare cash flow statement.

Liabilities	31.03.06	31.03.07	Assets	31.03.06	31.03.07
Equity share capital	3,00,000	4,00,000	Goodwill	1,15,000	90,000
Preference share capital	1,50,000	1,00,000	Land and building	2,00,000	1,70,000
General reserve	40,000	70,000	Plant	80,000	2,00,000
Profit and loss account	30,000	48,000	Debtors	1,60,000	2,00,000
Creditors	55,000	83,000	Stock	77,000	1,09,000
Bills payable	20,000	16,000	Bills receivable	20,000	30,000
Provision for taxation	40,000	50,000	Cash	15,000	10,000
Proposed dividend	42,000	50,000	bank	10,000	8,000
	6,77,000	8,17,000		6,77,000	8,17,000

Additional information:

Depreciation of Rs 10000 and Rs 20,000 has been charged on plant and land and building respectively
And interim dividend of Rs 20,000 has been paid
Income tax of Rs 35,000 has been paid.

From the following trial balance prepare profit and loss a/c and balance sheet for the year ended 31.03.02.

Particulars	Debit (Rs)	Particulars	Credit(Rs)
Plant at cost	3,00,000	Equity share capital	4,00,000
Land and Building	5,00,000	8% preference share capital	2,00,000
Investment in shares	2,00,000	Depreciation upto 31.03.01 Plant Building	1,00,000 1,50,000
Stock	70,000	Dividend equalization reserve	10,000
Bank	60,000	Profit and loss a/c on 1.4.01	25,000
Debtors	50,000	Creditors	30,000
Income tax deducted at source on dividend	2,200	Dividend (gross)	10,000
Establishment expenses	15,000	Miscellaneous receipts	2,300
Rent and taxes	6,000	Trading account balance	3,04,400
Audit fees (including Rs 1000 paid for other services	2,500
M.D.’s minimum remuneration	12,000
Directors fees	2,000
Sundry expenses	6,000
Income tax for previous year not provided	6,000
	12,31,700		12,31,700

You ascertain that:

Depreciation is to be charged on the written down value of plant @ 10% and land and building @ 5%
The directors propose to recommend a dividend of 15% on equity shares.
Provision for taxation is to be made at 55%.
D. is entitled to 5% on the net profits subject to a minimum of Rs.12,000 per annum.
A sum of Rs 15,000 is to be transferred to dividend equalization reserve.

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Loyola College B.Com Corporate & Secretaryship April 2011 Company Accounts Question Paper PDF Download

October 23, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FOURTH SEMESTER – APRIL 2011

BC 4502/BC 4500 – COMPANY ACCOUNTS

Date : 08-04-2011 Dept. No. Max. : 100 Marks

Time : 1:00 – 4:00

SECTION – A

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

What is partial underwriting of shares ?
Name any four preferential creditors.
Write a note on Capital Redemption Reserve ?
What do you understand by the term ‘Forfeiture of shares’ ?
Distinguish between ‘Ex-Interest’ and ‘Cum-Interest’ ?
Calculate the goodwill at one year’s purchase of the last three year’s average profit. The profit for the 1^st year was Rs.6,000, 2^nd year Rs.12,000 and the 3^rd year Rs.18,000.
Raj Ltd. issued 40,000 equity shares of Rs.10 each payable as Rs.5 on application and Rs.5 on allotment. Applications were received for 50,000 shares and the allotment was made on pro-rata basis. Krishna to whom 400 shares were allotted, failed to pay the allotment money and his shares were forfeited. Calculate the net amount received on allotment for the remaining shares.

X Ltd. decides to redeem 650, 15% redeemable preference shares of Rs.100 each at premium of 10%. It has a general reserve of Rs.70,000 and Securities premium of Rs.4,000. Calculate the amount required to be transferred to Capital Redemption Reserve a/c in the following cases :-

(a) If it is decided to issue 1,950 Equity shares of Rs.10 each at 30% premium for the

purpose of redemption of Preference shares.

(b) If it is decided to issue 3,125 Equity shares of Rs.10 each at 20% discount for the

purpose of redemption of Preference shares.

The liquidator of a company is entitled to a remuneration of 2% on assets realized and 3% on the amount distributed to unsecured creditors. The assets realized Rs.1,00,000 including cash balance of Rs.5,000. Amount available for distribution to unsecured creditors before paying liquidators remuneration was Rs.43,100. Calculate liquidator’s remuneration.

75% of an issue of 3,00,000 shares of Rs.10 each is underwritten by R & Co. Applications totaled 2,00,000 shares. Determine the liability of the underwriters ?

SECTION – B

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

State the provisions of the Companies Act regarding the calculation of net profits available for managerial remuneration.

State the legal requirements for alteration of share capital.
G Ltd. issued 2,000, 12% debentures of Rs.100 each on 1.1.2005 at a discount of 10%, redeemable at premium of 15% in equal annual drawings in 4 years out of profits. Give journal entries both at the time of issue and redemption of debentures.

Determine the maximum remuneration payable to the part time directors and manager under

Section 309 and 387 from the following particulars:

Before charging any such remuneration the Profit & Loss account showed a credit balance of Rs.23,05,000 for the year ended 31.03.2008 after taking into account the following particulars: Rs.

Profit on sale of investments 2,05,000

Subsidy received from government 4,10,000

Loss on sale of fixed assets 65,000

Ex-gratia to an employee 30,000

Compensation paid to an injured workman 75,000

Provision for taxation 2,79,000

Bonus to foreign technicians 3,12,000

Multiple shift allowance 1,00,000

Special depreciation 75,000

Capital expenditure 5,10,000

AB Ltd. issued 1,50,000 equity shares. The whole of the issue was underwritten as follows:

X – 50%; Y – 25% and Z – 25%. Applications for 1,20,000 shares were received in all, out of which applications for 30,000 shares under stamp of X, those for 15,000 shares that of Y and those for 30,000 shares that of Z. The remaining shares did not bear any stamp. Determine the liability of the underwriters.

The balance sheet of Wallace Ltd. as on 31.12.2007 was a under:

Rs. Rs.

Redeemable preference shares Sundry assets 3,65,000

of Rs.100 each 1,00,000 Bank 1,40,000

Equity shares of Rs.100 each 2,00,000

General reserve 80,000

P & L a/c 50,000

Creditors 75,000

———– ————

5,05,000 5,05,000

On this date the preference shares were redeemed at par. Journalize and prepare balance sheet after redemption.

A company went into voluntary liquidation on 31.03.2008, when the following balance sheet was prepared.

Liabilities Assets

Rs. Rs.

3,000 shares of Rs.10 each 30,000 Goodwill 6,960

Unsecured creditors 15,532 Freehold property 5,000

Partly secured creditors 5,836 Machinery 7,480

Preferential creditors 810 Stock 11,710

Bank O/D 332 Debtors 9,244

Cash 100

P & L a/c 11,816

——– ———-

52,310 52,310

The liquidator realized the assets as follows:

Freehold property Rs.3,600; Machinery Rs.5,000; Stock Rs.6,200; Debtors Rs.8,700.

The expenses of liquidation amounted to Rs.100 and the liquidator’s remuneration was agreed at 2.5% on the amount realized including cash and 2% on the amount paid to unsecured creditors. Prepare the liquidator’s final statement of account.

Following are the Balance sheets of two companies as on 31.3.2006

Liabilities XLtd. Y Ltd.

Share capital ( shares of Rs.10 each ) 25,000 40,000

Capital reserves 5,000 ___

General reserves 18,000 50,000

Loans 11,000 20,000

Creditors 21,000 23,000

Provision for tax 5,500 26,000

Proposed dividend ___ 5,000

____________________

85,500 1,64,000

___________________

Assets

Fixed assets 41,500 80,000

Investments 8,500 _

Current assets 34,500 84,000

Goodwill 1,000 –

____________________

85,500 1,64,000

___________________

Additional information :

X Ltd is absorbed by Y Ltd
Goodwill of X Ltd is worthless
Fixed assets of X Ltd are valued at Rs.39,500
Shareholders of X Ltd are given shares of Y Ltd on the basis of the intrinsic value of these two companies.

Calculate the intrinsic value of shares of both companies.

SECTION – C

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

Unstable Ltd. went into compulsory liquidation . Their summarized Balance Sheet as at 31^st March 2009 appears as under:

Liabilities Rs. Assets Rs.

2,50,000 Equity shares of Rs.10 each 25,00,000 Land and Buildings 5,00,000

Secured Debentures

(secured on Land & Building) 10,00,000 Other Fixed Assets 20,00,000

Unsecured Loans 20,00,000 Current Assets 45,00,000

Trade Creditors 35,00,000 Profit & Loss a/c 20,00,000

90,00,000 90,00,000 Contingent liabilities are : Rs.

for Bills Discounted 1,00,000

for Excise duty demands 1,50,000

On investigation, it is found that the contingent liabilities are certain to devolve and that the assets are likely to be realized as follows : Rs.

Land and Buildings 11,00,000

Other Fixed Assets 18,00,000

Current Assets 35,00,000

Prepare the Statement of Affairs and Deficiency A/c.

The following is the Balance sheet of United Industries Ltd on 31.3.2008

Liabilities Rs. Assets Rs.

Share capital:

6,000 6% preference shares 6,00,000 Goodwill 45,000

Of Rs.100

12,000 equityshares of Rs.100 12,00,000 Land &Building 6,00,000

8% Debentures 3,00,000 Plant 9,00,000

Bank overdraft 3,00,000 Stock 1,30,000

Sundry creditors 1,50,000 Debtors 1,40,000

Cash 15,000

Profit&loss account 7,00,000

Preliminary expenses 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 share to be reduced to fully paid shares of Rs.75 each.
The debenture holders took over stock and debtors in full satisfaction of their claim.
The land and buildings to be appreciated by 30% and plant and machinery to be depreciated by 30%.
The fictitious and intangible assets are to be eliminated.
Expenses of reconstruction amounted to Rs.5,000.

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

From the following Balance sheets prepare a Cash Flow Statement. 2008 2009 2008 2009

Rs. Rs. Rs. Rs.

Capital 1,80,000 1,80,000 Cash 40,000 50,000

P & L a/c 23,000 16,000 Debtors 73,000 77,000

Reserve 50,000 60,000 Investments 84,000 1,10,000

Debentures 1,14,000 1,30,000 Prepaid expenses 2,000 1,000

Prov. for tax 22,000 13,000 Stock 1,06,000 92,000

Creditors 96,000 1,03,000 Machinery 1,79,000 1,71,400

Goodwill 1,000 600

————- ———– ———– ————

4,85,000 5,02,000 4,85,000 5,02,000

————- ———– ———– ————

Additional information:

New machinery for Rs. 15,000 was purchased but old machinery costing Rs. 6,000 was sold for Rs.2,000 on which accumulated depreciation was Rs. 3,000.
Interim dividend paid 10,000.
Tax paid during the year Rs.25,000.

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

October 23, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

FOURTH SEMESTER – APRIL 2012

BC 4502/BC 4500 – COMPANY ACCOUNTS

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

Time : 1:00 – 4:00

PART – A

Answer ALL questions: (10×2=20 marks)

Distinguish between Firm underwriting and Pure underwriting.

Mention two purposes for which share premium can be used.

What is a Contingent liability? Give an example.

Distinguish between sub division and consolidation of share.

What is a vendor’s suspense account?

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.

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.

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.

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.

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.

PART – B

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

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

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

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

equity shares.

c) Rs.60,000 8% debentures.
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.

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

Journalize the above transactions.

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.

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

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.

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,

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

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.

PART – C

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

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.

Journalize.

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.

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

Cash and cash equivalents on 1^st 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

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

Adjustments:

Stock on 31.12.2011 was Rs.33,250.
Depreciate machinery @ 5%, Furniture @ 10%.

Debentures were issued on 1^st July 2011.

One-half of commission received is in respect of work to be done next year.
Write off further Rs.1,000 as bad debts and provision for bad debts is to be made at 5% on Sundry Debtors.
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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Loyola College B.Com April 2009 Company Accounts Question Paper PDF Download

October 20, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

KP 18

FOURTH SEMESTER – April 2009

CO 4502 – COMPANY ACCOUNTS

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

SECTION – A

Answer any TEN questions. (10 x 2 = 20)

What conditions must a company satisfy for issuing shares at discount?
Distinguish between marked and unmarked applications.
How do you value goodwill under capitalization of super profit?
Write short notes on (i) rights issue of shares, (ii) bonus shares.
What is the need for valuation of shares?
A company purchased assets for Rs. 5,00,000. The vendors were paid Rs. 1,40,000 in cash and the balance in 10% debentures of 100 each is issued at 90%. Journalise.
From the following particulars determine maximum remuneration available to full- time director of a manufacturing company.

The P&L A/c of the company showed net profit of Rs. 40,00,000 after taking into account the following

items:

i) depreciation Rs. 1,00,000(including special depreciation Rs. 40,000
ii) provision for income tax Rs. 2,00,000

iii) donation to political party Rs. 50,000,iv) capital profit on sale of assets Rs. 15,000

A company forfeited 10 shares of Rs. 10 each. Rs. 6 called up, issued at a discount of 10% on which Rs. 2 per share was paid. These shares were reissued at Rs. 8 called up for Rs. 5 per share. Pass forfeiture and reissue entries.
Company has following shares as a part of its share capital. 20,000 equity shares of Rs. 10 each, Rs. 8 called up and paid up and 10,000, 10% preference shares of Rs. 10 each. The company decided to alter the share capital as follows: i)To convert the partly paid-up equity shares into fully paid-up shares of Rs. 8 each, ii) To consolidate the preference share into shares of Rs. 50 each. Journalise the alterations.
X Ltd. decides to redeem Rs. 2,00,000, 10% preference shares at a premium of 10% out of profits. The company has general reserve balance of Rs. 3,00,000. Write entries for redemption.

SECTION-B

Answer ANY 5 questions (5 x 8 = 40)

How do you ascertain underwriter’s liability in the following cases:

(a) Complete underwriting

(b) Partial underwriting

Write short notes on: (i) Capital Redemption Reserve, and (ii) Ex-Interest and Cum- Interest Quotations

A company earned the following net profits during the last four years after taxes:

1996-Rs. 60,000, 1997-Rs. 65,000,1998-Rs. 75,000, and 1999-Rs. 70,000. The capital employed in the business was Rs. 60,000. Reasonable rate of return, normal in the industry was 10%. Super profits of the company can be maintained for l5 years.

Find out goodwill of the company:

If the present value of annuity of Re. 1 for five years at 10% is 3.78 and the goodwill should be valued

on Annuity basis.

2) If the super profit should be capitalized at normal rate of return.

3) If goodwill is 5 years purchase of the super profits.

The Quick Ltd., went into voluntary liquidation on 31-3-05 at which date its capital consisted of 2,000

shares of Rs. 100 each fully paid and particulars of the assets and liabilities were as under:

Cash in hand 1,000

Machinery which realized 35,000

Stock which realized 20,000

Debtors which realized 10,000

Unsecured creditors (including Rs. 5,000 preferential creditors) 55,000

Secured creditors(securities realized Rs. 30,000 by themselves) 22,000

8% Debentures(having floating charge) 40,000

The liquidator’s remuneration was fixed at 4% commission on the assets realized by him including surplus from secured creditors and 2% on the distribution made to unsecured creditors. The liquidation expenses came to Rs. 2,380 and the interest on debentures was due for one year to the date of winding up.

Prepare the liquidator’s final statement of account showing the rate and amount distributed as final dividend

to the unsecured creditors.

Ashok Ltd. was incorporated on 1^st April to take over as from 1^st January in the same year an existing

business of Desai Bros. Under the agreement all the profits made from 1^st January are to belong to the

company. The following balances appeared in the company’ ledger as at 31^st December:

Share Capital

Bank Overdraft

Sundry Creditors

Fixed Deposits

Freehold Land

Building at Cost

Furniture

Transport Vehicles

Stock on 1^st January

Book Debts

Cash at Hand

Goodwill

4,50,000

1,65,000

65,000

35,000

50,000

1,30,000

15,000

35,000

4,20,000

95,000

12,000

3,100

Preliminary Expenses

Written off

Salaries

Rent Received

Rates and Taxes

Repairs to Building

Miscellaneous Expenses

Directors Fees

Interest to Vendors

(upto 30^th June)

Purchases

Sales

8,000

48,000

13,000

7,000

3,000

22,000

2,400

17,500

7,70,000

9,10,000

Stock on 31^st December amounted to Rs. 4,80,000. Bad debts amounting to Rs. 1,000 of which Rs. 500

related to book debts taken over by the company and a provision of Rs. 5,000 to be made for doubtful debts.

Depreciation has to be written off at 5% on buildings, 10% on furniture and 20% on Vehicles.

Prepare(a) Trading Account (b) Profit and Loss Account showing profit post and prior to incorporation of the company (assuming that the sales are evenly spread over throughout the year)

A company has 10,000 9% redeemable preference shares of Rs. 100 each fully paid. The company

decides to redeem the shares on 31^st Dec. 2007 at a premium of 10%. The company makes the following

issues:

6,000 equity shares of Rs. 100 each at a premium of 10%
4,000 8% Debentures of Rs. 100 each.

The issue was fully subscribed and allotments were made. The redemption

was duly carried out. The company has sufficient profits.

You are required to give the necessary entries.

On 31^st Dec. 1998, the balance sheet of a limited company disclosed the following position.

Liabilities

Rs.

Assets

Rs.

Issued capital in Rs. 10 shares

Profit & Loss A/c

Reserves

5% Debentures

Current Liabilities

8,00,000

40,000

1,80,000

2,00,000

2,60,000

Fixed assets

Current assets

Goodwill

10,00,000

4,00,000

80,000

14,80,000

On Dec. 31, 1998, the fixed assets were independently valued at Rs. 7,00,000 and the goodwill at

Rs. 1,00,000. The net profits for the three years were:

1996-Rs. 1,03,000;1997-Rs. 1,04,000;and 1998-Rs. 1,03,300 of which 20% was placed to reserve, this proportion being considered reasonable in the industry in which the company is engaged and where a fair return on investment may be taken at 10%. Compute the value of the company’s share by (a) the net assets method and (b) the yield method.

Ltd. was promoted as a Joint Stock Company in 2000. The working of company was not successful. On 31-12-2001 company’s balance sheet stood as under:

Liabilities

Rs.

Assets

Rs.

Share Capital- Authorised

Subscribed & paid up:

12000 shares of Rs. 100 each

fully paid

Debentures

Creditors

20,00,000

12,00,000

5,00,000

7,00,000

Land & Buildings

Machinery

Furniture

Stock

Debtors

Goodwill

Profit & Loss Account

Preliminary Expenses

Discount on Issue of shares

5,00,000

2,60,000

20,000

3,70,000

1,80,000

2,00,000

5,00,000

2,00,000

1,70,000

24,00,000

It is resolved to reconstruct the company on the basis of the following scheme:

(1) The 12,000 shares of Rs. 100 each are to be reduced to an equal number of fully Paid shares of Rs. 50 each.

(2) Debenture holders are to be discharged by the issue of 8,000 unissued shares as fully paid up shares of

Rs. 50 each in full settlement of their claim

(3) The claims of creditors be reduced by 50% as agreed by them.

(4) The amount available be used to write off Profit and Loss Account, Preliminary Expenses, Discount on issue of shares, 50% off Goodwill; Rs. 20,000 off Stock; and Rs. 30,000 off Machinery; and also provision for doubtful debts to be made to the extent of Rs. 10,000.

Give the necessary Journal entries:

SECTION—C

Answer ANY 2 Questions: (2 x 20 = 40)

The balance sheets of Gargi Ltd., as at December 31, 2006 and 2007 are given below:

Assets 2007 2006

Cash Balances Rs 60,000 50,000

Trade Debtors 1,00,000 75,000

Inventory 1,20,000 1,40,000

Land 80,000 1,00,000

Plant & Machinery 2,50,000 2,00,000

Accumulated depreciation on plant (80,000) (60,000)

Total of assets 5,30,000 5,05,000

Liabilities and Capital

Trade creditors 40,000 30,000

Debentures 90,000 1,50,000

Equity share capital 2,40,000 2,00,000

Retained Earnings 1,60,000 1,25,000

Total of liabilities and capital 5,30,000 5,05,000

Cash dividends of Rs. 25,000 have been paid during the year.

You are required to prepare a cash flow statement.

On 1^st April 1999, ABC Ltd. issued 1,00,000 equity shares of Rs. 10 each at Rs. 12 per share, payable as to Rs. 5 on application, Rs. 4 on allotment, and the balance on 1^st July 1999.

The lists closed on 12^th April 1999 by which date applications for 1,40,000 shares had been received. Of the cash received, Rs. 80,000 was returned and Rs. 1,20,000 was applied to the amount due on allotment, the balance of which was paid on 19^th April 1999. All share holders paid the call due on 1^st July 1999, with the exception of one allottee for 1,000 shares. These shares were forfeited on 30^th November 1999 and reissued as fully paid at Rs. 8 per share on 2^nd January 2000.

Pass Journal entries in the books of ABC Ltd.

From the following trial balance of Vishal Trading Co. Ltd. as at 31.3.2000 and the adjustments given

below prepare the trading and profit and loss account, profit and loss appropriation account and the

balance sheet:

Share Capital

6000 shares of Rs. 10 each…………………………..

Buildings …………………………………………….

Furniture(including Rs. 2,500 additions made on 1.4.1999)

Shares of Rs. 10 in X Co Ltd. , Rs. 8 paid………….

Stock on 1.4.1999…………………………………….

Dividend Equalisation Reserve ……………………..

10% Debentures ……………………………………

Interest on Debentures(paid for ½ year)

Goodwill . . . . . . . . …………………………………..

Bank Overdraft(unsecured)

Bill Receivable and Bills Payable……………………

Debtors and Creditors

Loans to Employees

Discount on Issue of Shares

Purchases and Sales…………………………………

Carriage Inwards

Carriage outwards

Salary to Staff

Salary to Managing Director

General Expenses

Interest on Bank Overdraft

Legal Charges

Profit & Loss Appropriation Account(1.4.1999) …..

Discount ……………………………………………..

Miscellaneous Income ……………………………….

Cash in hand………………………………………….

40,000

8,000

20,000

500

32,500

8,000

14,000

3,500

3,600

2,00,000

5,000

600

6,000

4,000

5,000

300

400

100

————

3,59,500

60,000

2,000

10,000

7,000

4,500

19,000

2,40,000

15,000

1,400

600

————–

3,59,500

Adjustments:

Closing stock was valued at Rs. 25,000
Provide for ½ year’s outstanding interest on debentures
Write off ¼ of discount on issue of shares
Provide for Rs. 10,000 for income tax and 10% tax on proposed dividend
The directors have proposed dividend at 15%
Transfer Rs. 3,000 to dividend equalization reserve
Depreciate buildings at 2.5% and furniture at 10%.

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Loyola College B.Com April 2011 Company Accounts Question Paper PDF Download

October 19, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FOURTH SEMESTER – APRIL 2011

CO 4502/CO 4500 – COMPANY ACCOUNTS

Date : 07-04-2011 Dept. No. Max. : 100 Marks

Time : 1:00 – 4:00

Part – A

Answer ALL Questions: 10 X 2 = 20 marks

State any two legal provisions as to the utilization of securities premium.
Enumerate the various ways of redemption of debentures.
Give an imaginary Profit & Loss appropriation account of a limited company.
Write a note on “Intrinsic Value of Shares”.
What do you understand by “Consolidation of shares”?
Ltd. forfeited 1,000 equity shares of Rs.10 each, issued at a discount of 10% for non-payment of the first call of Rs.2 and the final call of Rs. 3 per share. Show the necessary journal entry.
Ltd. redeemed Rs.10,000, 12% debentures out of capital by drawing a lot and it has also redeemed Rs.20,000 10% debentures out of profit by drawing a lot. Journalize.
Dharran Ltd. earned a profit after tax of Rs.10,00,000 in 2008-09 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 & Loss A/c.
Give journal entries for the following transactions in connection with internal reconstructions:-
- 30,000 equity shares of Rs.10 each fully paid reduced to shares of Rs.5 each fully paid.

300 9% debentures Rs.1000 each converted into 1500

12% debentures of Rs.100 each.

Total assets of the firm is Rs.8,40,000. The liabilities of the firm is Rs.4,40,000. Normal rate of return in this class of business is 12.5%. The firm earned a profit of Rs.64,000. Calculate goodwill, if it is to be valued at 2 years’ purchase of super profit.

PART – B

5 X 8 – 40 MARKS

Answer any FIVE Questions:

Explain the law relating to calculation of ‘Managerial Remuneration’.
What are preference shares? What are the conditions for the redemption of preference shares?
Define goodwill. What are the different methods of calculation of goodwill?
A company issued 10,000 equity shares of Rs.10 each at a premium of Rs.3 per share payable. Rs.5 on application, Rs.5 (including Premium) on allotment and the balance on call. All the shares offered were applied for and allotted. All the moneys due on allotment were received except on 200 shares. Call was made. All the amount due thereon was received except on 300 shares. Directors forfeited 200 shares on which both allotment and call money was not received.

Pass the necessary journal entries to record the above and also show how this will appear in the Balance Sheet of the Company.

On 1^st January ‘X’ Ltd. has Rs.1,00,000 6% debentures. In accordance with the power under the deed the directors acquire the debentures as follows in the open market for immediate cancellation:

March 1 – Rs.20,000 at Rs.98

August 1 – Rs.40,000 at Rs.100.25

December 15 – Rs.10,000 at Rs.98.5

You are required to give journal entries for purchase and cancellation of debentures.

If the above purchase rates are ‘Ex-Interest’
If the above purchase rates are ‘Cum-Interest’.

Assume that interest is payable every year on 30^th June and 31^st December.

From the following Balance Sheet as on 31.12.2005 and 31.12.2006. You are required to prepare a cash flow statement:

Liabilities 2005 2006 Assets 2005 2006

Share Capital 1,00,000 1,50,000 Fixed Assets 1,00,000 1,50,000

Profit & Loss A/c 50,000 80,000 Goodwill 50,000 40,000

General Reserve 30,000 40,000 Inventories 50,000 80,000

12% Bonds 50,000 60,000 Debtors 50,000 80,000

Sundry Creditors 30,000 40,000 Bills receivable 10,000 20,000

Outstanding Expen. 10,000 15,000 Bank 10,000 15,000

2,70,000 3,85,000 2,70,000 3,85,000

P Mills Ltd., was incorporated on 31^st July 2007 to purchase the business of H. & Co., as on 1.4.2007. The books of account disclosed the following on 31^st March 2008.
- Sales for the year Rs.32,10,400 (1^st April to 31^st July 2007 Rs.8,02,600; 1^st July 2007 to 31^st March 2008 Rs.24,07,800)
- Gross Profit for the year Rs.4,12,800; Managing Directors’ Salary Rs.12,000; Preliminary expenses written off Rs.18,000; Company Secretary’s salary Rs.58,000.
- Bad debts written off Rs.14,890 (prior to 31^st July Rs.4,020, after 31^st July Rs.10,870)
- 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 apportioning properly the net profit of the company as between pre-Incorporation and post-incorporation.

The issued Share Capital of a company was Rs.10,00,000 consisting 10,000 equity shares of Rs.100 each. The net profits for the last 5 years were Rs.1,00,000; Rs.80,000 ; Rs.1,20,000; Rs.1,60,000 and Rs.1,40,000 of which 20% was placed to reserve, this proportion being considered reasonable in the industry in which the company is engaged and where a fair investment return may be taken at 12%. Compute the value of Company’s share by the yield value method.

PART – C

Answer any two questions: – Marks: 2 X 20 – 40

The following is the Trial Balance of Bee Ltd. as on 31^st March 2008

Rs. Rs.

Stock on 1.4.2007 75,000 Purchase returns 10,000

Purchases 2,45,000 Sales 3,40,000

Wages 30,000 Discount 3,000

Carriage 950 Profit & Loss A/c. 15,000

Furniture 17,000 Share Capital 1,00,000

Salaries 7,500 Creditors 17,500

Rent 4,000 General Reserve 15,500

Sundry Trade Exp. 7,050 Bills Payable 7,000

Dividend Paid 9,000

Debtors 27,500

Plant & Machinery 29,000

Cash at Bank 46,200

Patents 4,800

Bills receivable 5,000

5,08,000 5,08,000

Prepare the Profit and Loss account for the year ended 31.03.2008 and a balance sheet as on that date after considering the following adjustments:

Stock on 31.3.2008 Rs.88,000
Provide for Income tax at 50%
Depreciate Plant & Machinery at 15%, furniture at 10%, and patents at 5%
On 31.3.2008 outstanding rent amounted to Rs.800 and Salaries Rs.900.
The Board recommends payment of a dividend of 15% p.a. Transfer the minimum required amount to General reserve.
Provide Rs.510 for doubtful debts.
Provide for managerial remuneration at 10% on profit before tax.

The following was the Balance Sheet of ABC Limited as on 31.12.2006.

Liabilities Rs. Assets Rs.

Share Capital Goodwill 10,000

12000 shares of Land & Building 20,500

Rs.10 each 1,20,000 Machinery 50,850

Less Calls in arrear Preliminary Exp. 1,500

Rs.3 per share Stock 10,275

300 shares 9,000 1,11,000 Debtors 15,000

Creditors 15,425 Bank 1,500

Provision for tax 4,000 P & L A/c 22,000

(-) net

profit of 1,200 20,800

this year

1,30,425 1,30,425

Machinery value was Rs.10,000 in 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 the adoption of the following scheme:-

forfeit the shares on which the calls are outstanding.
Reduce the paid up Capital by Rs.3 per share.
Re-issue the forfeited shares at Rs.5 per share.
Utilize the provision for tax if necessary

You are required to draft the journal entries necessary and the balance sheet after carrying out the scheme.

On 31.3.2008 the date of liquidation of a company, its balance sheet was as under:

Liabilities Rs. Assets Rs.

Share Capital:

7% preference shares 3,00,000 Land & Buildings 4,00,000

6000 Eq. Shares of Rs.10 48,000 Plant & Machinery 1,60,000

Each Rs.8 Paid up

Stock 4,00,000

3000 Eq. Shares of Rs.10 21,000 Debtors 6,40,000

Each Rs.7 paid up

Cash at Bank 51,000

6% Debentures of Rs.100 12,00,000

each

Outstanding interest on 72,000

debentures

Creditors 8,000

Bills Payable 2,000

16,51,000 16,51,000

The assets were realized as under:

Land & Buildings Rs.3,50,000 ; Plant & Machinery Rs.2,00,000 ; Debtors Rs.6,00,000 ; Stock Rs.4,61,000 ; Liquidation expenses Rs.2000. Remuneration of liquidator 0.5% on assets realized including cash and 1% on the amount paid to unsecured creditors.

Creditors shown in the balance sheet included Rs.2000 preferential. Interest on debentures is to be paid up to 31.5.2008. Dividend on preference. Shares is in arrears for 1 ½ years. Legal charges Rs.1,000/-. Prepare liquidator’s final statement of Account as on 31-3-2008.

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

October 19, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FOURTH SEMESTER – APRIL 2012

CO 4502/CO 4500 – COMPANY ACCOUNTS

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

Time : 1:00 – 4:00

PART – A

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

State the need for underwriting of shares.
Distinguish between ‘Ex-interest’ and ‘cum-interest’ price.
Under what headings will you classify the following items while preparing the Balance sheet of a company :
Preliminary expenses
Bills payable
Provision for tax
Outstanding debenture interest
Explain the term capital reduction.
What is Normal Rate of Return?
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.
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.
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.
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.

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.

PART-B

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

Explain the different kinds of ‘Alteration of share capital’ which do not require approval of court of law.
What is ‘Statement of affairs’? How is it prepared?
Describe the method of dealing with ‘unmarked applications’ in relation to an underwriting contract.
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.
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.
Sales for the year Rs.32,10,400 (1^st April1 –31^st July ,2010 Rs.8,02,600, 1^st August to 31^st March 24,07,800)
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.
Bab debts written off Rs.14,890. (prior to 31^st July Rs.4,020 and after Rs.10,870)
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.

The Balance sheet of Skey Ltd.as on 31^st2010 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 31^st 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.

The financial position of Axe Ltd. on 1^st April 2010 and 31^st 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 .

The Balance sheet of Yee Ltd. as on 31^st2010 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.

PART – C

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

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 31^st 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 31^st December 2010 in the prescribed form, after taking into account the following adjustments :

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

Neo Company was formed on 1^st 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 31^st 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.

King Ltd. went into voluntary liquidation on 31^st 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 30^th June

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

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

October 17, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FOURTH SEMESTER – NOVEMBER 2012

CO 4502/4500 – COMPANY ACCOUNTS

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

Time : 1:00 – 4:00

PART – A

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

Explain the term ‘Firm Underwriting’.
What is call money? What is the maximum amount of a call according to table A.?
What do you understand by redemption of debenture out of profits.?
What are ‘divisible profit’?
Write a note on ‘pre – incorporation profit’.
How do you calculate ‘Average capital employed’?
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.
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.
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.
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.

PART – B

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

What is ‘acquisition of Business’? Explain the methods of computing purchase consideration on acquisition of business.
Explain the Provisions Under sec 78 of the companies Act for the use of share premium.
Explain the circumstances under which valuation of shares is essential and discuss the various methods of valuation.
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.

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).
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: Discount	2,000
To Managing director: Salary: Commission	2,000 1,000	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.

A company was incorporated on 1^st May 2010 acquiring the business of a sole trader with effect from 1^st January 2010. The accounts of the company were closed for the first time on 30^th 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.

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.

PART – C

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

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 30^th June 2010, partly or fully.

Redemption were made out of profit as follows:

1,200 shares on 30^th June 2010 at par.
1,600 shares on 31^st December 2010 at 10% premium.
Remaining shares 30^th 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 30^th 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.

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

Adjustments:

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.

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.

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

October 13, 2017 by 01 prakash

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)

What is over subscription?
What is meant by firm underwriting?
How do you apportion the following expenses while ascertaining profits prior to incorporation: Insurance, carriage outwards, director’s fee, preliminary expenses.
Briefly explain calls in arrears and calls in advance.
What are contingent liabilities? Give any 2 examples.
A company issued 1000 8% debentures of Rs 100 each at a discount of 5% redeemable at a premium of 10%. Pass journal entry.
How is provision for tax treated in the final accounts of a company?
Write a note on capital redemption reserve.
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.
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

Explain the need for valuation of shares and the factors affecting the value of shares.
What is capital reduction? What are the provisions of the companies act with regard to reduction of share capital?
Explain the provisions relating to redemption of redeemable preference shares.
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.

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.
On 1.10.2004 a company issued 10000 14% debentures of Rs.100 each (interest payable on 30^th September and 31^st march) the company is allowed to purchase own debentures for immediate cancellation. On 31^st August 2005 it purchased 1000 debentures at Rs. 98 ex interest and on 31^st December 2006, 500 debentures at Rs.97 cum interest. Pass journal entries.

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.

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

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.

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.

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.

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

October 13, 2017 by 01 prakash

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?

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.

What is a debenture? How does it differ from a share?
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.

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.

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:

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 31^st 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.

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.

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