Corporate Accounting Question Paper May' 2013, Dibrugarh University B.Com 2nd/4th Sem

Dibrugarh University Corporate Accounting Question Papers
Corporate Accounting Question Paper 2013 (May)
COMMERCE (General/Speciality)
Course: 203 (Corporate Accounting)
The figures in the margin indicate full marks for the questions
Full Marks: 80
Pass Marks: 32
Time: 3 hours

1. (a) state true or false

(i) Out of face value of shares, at least 10% is payable with application.

(ii) A debenture holder is an owner of the company.

(iii) Under net payment method purchase consideration is calculated by adding the various payments made by the purchasing company.

(iv) Insolvency is a necessary condition for liquidation of a company.

(b) State the correct answer:

(i) Preference shareholder are

(a) Creditors of a company

(b) owner of the company

(ii) Debentures are show in the Balance sheet at

(a) Face value

(b) Discount

(iii) Accumulated losses to the vendor company should be transferred to the

(a) Profit and Loss Account

(b) Profit and Loss Appropriation Account

(v) A contributory is a

(a) Debenture holder

(b) Share holder creditor

2. Answer the following:

(a) Explain how would you deal with---

(i) Shares forfeited but not reissued;

(ii) Shares forfeited and reissued;

(b) Distinguish between ‘preacquisition profit’ and ‘postacquisition profit’ of a company.

(d) State the order in which ordinarily made by a liquidator to satisfy the various claims in case of voluntary liquidation of a company.

3. (a) A limited company issued 6% 10000 debentures of Rs. 100 each at discount of 5 per cent, repayable after 5 years at a premium of 10 per cent. Show journal Entries in the books of the company recording the above transactions.

(b) Explain how the loss on debenture be dealt with and show how this account will appear in the books of the company over the five consecutive years.

What do you mean by buyback of shares? State the legal provisions relating to buyback of shares.

4. (a) (i) How should be premium on shares be deals with?

(ii) A limited company has an accumulated reserve of Rs.500000. It was decided to declare bonus of Rs. 300000 out of its reserve. The bonus is to utilized as:

(1)100000 to make the existing 25000 shares of Rs. 10 each fully paid of which Rs. 6 per share called and paid.

(2)200000 by issuing 5000 bonus shares at Rs. 25 each at a premium of Rs. 15 per shares to the existing shareholders. Pass the Journal Entries in the book of the company recording the above transactions.

(b) Enumerate the SEBI,s guidelines regarding issue of shares and forfeiture of shares.

5. (a) Distinguish between Amalgamation and Absorption.

(b) What do you mean by internal reconstruction of a company? Explain its scope.

Kamrup Company Ltd had the following Balance Sheet as on 31^st March, 2012:

Liabilities	Amount	Assets	Amount
Authorized Capital 5000 Shares of Rs. 100 each Issued and Subscribed Capital: 2000 Shares of Rs 100 each 200, 6% debenture of Rs 1000 each Sundry Creditors Bills Payable Bank Overdraft	500000 200000 200000 75000 25000 60000	Goodwill Land & Building Plant & Machinery Stock Sundry Debtors Cash at Bank Preliminary Expenses Profit & Loss A/c (Dr)	60000 90000 200000 47000 46000 12500 6000 98500
	560000		560000

The Following schemes of reconstruction were adopted:

(i) Without altering the number of shares in authorised, issued and subscribed capital, the face value and paid value of each shares was to be reduced to Rs. 50

(ii) The existing debentures be converted into 100, 9 1/2% Debentures of Rs. 1000 each

(iii) The assets be revalued as under;

Land and Building Rs. 82000

Plant and Machinery Rs. 175000

Stock Rs. 44500

Sundry Debtors subject to a bad debts provision Rs.5000

(iv) Goodwill, preliminary expenses and the debit balance of Profit & Loss A/C be completely written off.

Give Journal Entries to implement the above schemes of reconstruction and prepare the Balance Sheet.

6.(a) Who are the ‘Preferential Creditors’?

(b) The balance sheet of Assam Ltd. As on 31^st December, 2012:

Liabilities	Amount	Assets	Amount
Share Capital: Authorised & Issued: 2000, 6% Preference Shares of Rs. 100 each 1000 Equity Shares of Rs. 100 each,Rs. 75 paid 3000 Equity Shares of Rs. 100 each, 60 Paid 5% debentures (having a floating charges on all assets) Interest outstanding Creditors	200000 75000 180000 100000 5000 145000	Land and building Machinery Patent Stock Sundry Debtors Cash at Bank Profit & Loss	100000 250000 40000 50000 115000 30000 120000
	705000		705000

The company went into liquidation on that date. The preference divided in arrear for two years. Creditors include a loan of 50000 on the mortgage of land and building. The assets were realized as follows:

Land and Building: 120000; Machinery: 200000; Patent: 30000; Stock: 60000; Sundry Debtors: 80000

The expenses of liquidation amounted to Rs. 10900. The liquidator is entitled to a commission of 3 per cent on all assets realised except cash and a commission of 2 percent on amount distributed to unsecured creditors. Preferential creditors amounted to Rs. 1500.

Prepare Liquidators Final Statement of Account.

7. (a) Distinguish between Holding Company and Subsidiary Company.

(b) Mention two advantages and two disadvantages of Holding Company.

(c) A Ltd. Acquired 1000 shares of Rs. 10 each in B Ltd. At a cost of Rs. 16000 and 500 shares of Rs. 10 each in C Ltd. At a cost of Rs. 4000 on 1^st January 2012 out of a total issue of share capital of 1500 and 800 shares respectively. Neither of the subsidiary company had issued any Preference Shares.

At the date of acquisition, the accounts of B Ltd. Showed a General Reserve of Rs. 12000 and credit balance of Rs. 4500 in the Profit & Loss Account and the accounts of C Ltd. Showed a debit Balance of Rs. 6400 in the Profit and loss Account.

Show how these facts would be set out in the Consolidated Balance Sheet of A Ltd. and its Subsidiary companies.

Corporate Accounting Question Papers and Solutions (Dibrugarh University)

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