Corporate Accounting Question Paper May' 2012, Dibrugarh University B.Com 2nd/4th Sem

Dibrugarh University Corporate Accounting Question Papers
Corporate Accounting – 2012 (Old course)
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) Chose the correct Answer:

i. A company can issue shares at a discount under Section (77/78/79).

ii. Profit on re-issue of forfeited shares is transferred to (capital reserve/general reserve).

iii. Account for amalgamation is associated with Accounting standard (14/15/16).

(b) Fill in the blanks:

i. Section __ of the Companies Act provides for liquidation of a company.

ii. In case of holding company shares held by outsides are known as __

iii. Reduction of capital is unlawful except when sanctioned by the __.

i. Preference share cannot be redeemed unless they are fully paid up.

ii. Profit made by subsidiary company after the date of acquisition of shares by the holding company are treated as revenue profits.

2. Answer the following:

a) Distinguish between Bonus shares and Right Shares.

b) State the SEBI regulations relating to buy-back of share.

c) Write four points of distinction between Amalgamation in the Nature of purchase.

d) Explain the steps to be following by a liquidator while preparing a liquidator’s Final Statement.

3. (a) Explain the provisions of law with regard to redemption of redeemable preference shares as laid down in Sections 80 of the Companies Act, 1956. State the purpose for utilisation of Securities premium sccount.

(b) ABC Ltd issued 1000000 debentures on Jan 1, 2009. These were to be redeemed on 31^st Dec,20011. For this purpose, the company established a sinking fund . Investments were expected to earn 5% interest p.a. Sinking Fund Table show that 0.317208 invested actually at 5% interest amounts to 1 in three years. On 31^st dec 2011 the bank blc was 420000 before receipt of interest on sinking fund investments. On that date the investments were sold for 656000. Calculate the interest to the nearest of a rupee assuming investments are made in multiples of Rs. 100. Show the debenture account , Sinking Fund Account and sinking fund investments account in the book of the company.

4. (a) Following is the balance sheet of P Ltd. As at 31^st March, 2011:

Liabilities	Amount	Assets	Amount
Share capital: Issued and paid up 250000 Equity Share of Rs. 10 each, 8 per share paid up 100000, 10% Pref. share of Rs 10 Reserve and Surplus: General Reserve Profit and Loss Account Current Liabilities: Creditors Workemen’s Profit Sharing Fund	2000000 1000000 600000 800000 400000 300000	Fixed Assets: Goodwill Building Plant and Machinery Current Assets: Stock Sundry Debtors Bank Balance Miscellaneou Exp: Preliminary Expenses	800000 700000 1300000 700000 900000 660000 40000
	5100000		5100000

Q Ltd deciside to absorb the business of P Ltd. At the respective book value of assets and trade liabilities except Building which was valued at Rs. 1200000 and Plant & Machinery at Rs. 1000000. The purchase Consideration was payable as follows:

i. Assumption of trade liabilities at book value.

ii. Payment of liquidation expenses Rs. 5000 and Workmen’s Profit sharing Fund at 10% premium.

iii. Issue of equity share of 10 each fully paid at Rs. 11 per share for every Preference share and every equity share of P Ltd and a payment of 4 per share in cash

Calculate the Purchase consideration and show the Realisation Account Share Accounts in the book of P Ltd. And Opening Journal Entries in the books of Q Ltd.

(b) In what ways can a company alter its share capital? State the procedure is to be follow by a company for reducing share capital. Also explain the cases where procedure of reduction of capital is not called for.

5. (a) Assam Air Product Ltd went into voluntary liquidation on 31 Dec 2011 when their Balance Sheet was as Follows:

Liabilities	Amount	Assets	Amount
Issued and Subscribed Capital: 10000, 10% Cumulative Preference Sharesof Rs. 100 each fully Paid 5000 Equity Shares of Rs. 100 each, 75 paid 15000 Equity Shares of Rs. 100 each, 60 paid 15% Debentures secured by a floating charge Interest outstanding on Debentures Creditors	1000000 375000 900000 500000 75000 637500	Land and Buildings Machinery and Plant Patents Stock Sundry Debtors Cash at Bank Profit and Loss A/c	500000 1250000 200000 275000 550000 150000 562500
	3487500		3487500

Preference dividends were in arrears for 2 years and the Creditors included Preferential Creditors of Rs. 76000. The assets realised as follows:

Land and building - 600000, Machinery and Plant – 1000000, Patents – 150000, Stock – 300000, Sundry debtors – 400000.

The expenses of liquidation amounted to Rs. 545000. The liquidator is entitled to a commission of 3% on assets realized except cash. Assuming the final payments including those on debentures are made on 31^st March 2012, show Liquidator’s Final Statement of Account.

(b) Write notes on the followings:

i. Preferential creditors

ii. Voluntary winding-up of a company

iii. Order of payment followed by a liquidator for settlement of various claims

6. (a) Define a holding company. What is minority interest and how is it calculated? Give four examples of transactions which must be eliminated while preparing Consolidated Balance Sheet

(b) Balance Sheet of A Ltd. And its subsidiary B Ltd. On 31^st March, 2010 were as under:

Liabilities	A Ltd.	B Ltd	Assets	A Ltd.	B Ltd.
Share Capital: Equity Share of Rs. 10 each Fully Paid General Reserve on 1.4.2009 Profit and Loss on 1.4.2009 Profit for the year ended 31.3.2010 Bills payable Creditors Bank Overdraft	2000000 300000 400000 500000 150000 300000 200000	500000 100000 200000 250000 --------- 300000 --------	Land and Building Plant and Machinery Fixture and Furniture 30000 Shares in B Ltd. at Cost Stock Debtors Cash in Hand Bills Receivable	600000 2000000 90000 650000 400000 100000 100000 --------	-------- -------- 100000 -------- 750000 280000 20000 200000
	3850000	1350000		3850000	1350000

30000 Shares in B Ltd. Were acquired by A Ltd. On 1^st October, 2009. Bills Receivable held by B Ltd is a sum of 60000 owing by A ltd in respect of goods supplied by B Ltd. Contingent Liability for bill discounted by B Ltd. Is Rs. 25000. You are required to prepare a Consolidated Balance Sheet of a Ltd. With its subsidiary B Ltd. As at 31^st March, 2010.

Corporate Accounting Question Papers and Solutions (Dibrugarh University)

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