Corporate Accounting Question Paper May' 2014, Dibrugarh University B.Com 2nd/4th Sem

Dibrugarh University Corporate Accounting Question Papers
Corporate Accounting Question Paper 2014 (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

The figures in the margin indicate full marks for the questions.

1. (a) State whether the following statements are “True” or “False” 1x2=2

(i) Loss on issue of Debenture Account is an asset.

(ii) Reduction of Capital is a unlawful except when sanctioned by the Court.

(b) Fill in the blanks : 1x3=3

(i) Preference Shares can be redeemed if they are _____.

(ii) The portion of the authorized capital which can be called up only on the liquidation of the company is called _____ capital.

(iii) Dividend declared between two annual general meetings of company is knows as _____.

(i) Consolidated Financial Statements are prepared as per Accounting Standard

1) 19

2) 21

3) 23

(ii) Under Section 95 of the Companies Act, 1956 a company shall give notice of the alteration of its share capital to the Registrar within _____ days of doing so.

1) 15

2) 25

3) 30

(iii) Share Forfeited Account is Shown on the liabilities side of the Balance Sheet.

1) by adding to the paid-up capital

2) under the head Reserves & Surplus

3) Under the head Current Liabilities and Provisions

2. Write short notes of any four of the following : 4x4=16

(a) Sinking Fund

(b) Buyback of Shares

(d) Capital Reserve

(e) Minority Interest

(f) Debt Capital

3. (a) PMS Ltd. Has an authorised capital of Rs. 15,00,000 in 15000 Equity Shares of Rs. 100 each. The company issued 10000 shares at a premium of Rs. 20 per share payable us under:

Particulars	Rs.
On Application (including premium)	40
On Allotment	40
On First Call	20
On Final Call	20

Applications were received for 15000 shares and allotment was made as follows :

(i) Regret letters were issued to the applicants for 3000 shares and money refunded.

(ii) Full allotment was made to the applicants for 6000 shares

(iii) The rest of the shares were allotted to the applicants for next 6000 shares on pro-rata basis, the excess application money being adjusted against amount due on allotment.

All money due were received except one shareholder named A to whom 100 shares were allotted on pro-rata basis, failed to pay his allotment money. His subsequent failure to pay the first call, his shares were forfeited. Another shareholder named B to whom 200 shares were allotted failed to pay both the calls and his shares were forfeited after the final call. Out of the above forfeited shares, 200 shares (including 50 shares of A) were reissued at Rs. 90 each as fully paid.

Pass necessary Journal Entries in the books of the company. 14

(b) Discuss the SEBI guidelines (prior to Companies Act, 2013) regarding issue and forfeiture of shares. 14

4. (a) Ram Ltd. And Krishna Ltd. decided to amalgamate and a new company named Ramakrishna Ltd. is formed to take over both the Companies as on 31^st March, 2013. The following are the Balance Sheets of companies as on that date :

Liabilities	Ram Ltd.	Krishna Ltd.	Assets	Ram Ltd.	Krishna Ltd.
Share capital of Rs.10 fully paid-up	5,00,000	3,00,000	Goodwill	1,00,000	80,000
Reserve Fund	2,00,000	1,50,000	Land & Building	2,50,000	1,90,000
Profit & Loss A/c	30,000	50,000	Plant & Machinery	2, 00,000	2,55,000
Dividend Equalization Fund	__	1,00,000	Patents&Trade Mark	__	52,500
Workmen Compensation Fund	20,000	__	Stock	2, 00,000	1,50,000
Bank Overdraft	__	50,000	Sundry Debtors	90,000	40,000
Sundry Creditors	90,000	1,10,000	Bills Receivable	__	20,000
Bills Payable	50,000	30,000	Cash at Bank	50,000	2,500
	8,90,000	7,90,000		8,90,000	7,90,000

Show how the amount payable to each company is arrived at and prepare the amalgamated Balance Sheet of Ramakrishna Ltd. assuming amalgamation is done in the nature of purchase. 8+6=14

(b) (i) How is purchase consideration determined? What are the different ways of discharging the purchase consideration? 8

(ii) Explain the treatment of reserves of amalgamation in the nature of merger and amalgamation in the nature of purchase. 6

5. (a) (i) Write a note on modes of winding-up of a company. 4

(ii) XYZ Ltd. went into voluntary liquidation on 31^st March, 2013. The position of the company on that date was as follows :

Share Capital – 500 Equity shares of Rs. 10 each, Rs. 8 per share called up	40,000
Unsecured Creditors :
Preferential	5,000
Non-Preferential	25,000
Secured Creditors (secured on Plant & Machinery)	15,000
Cash in Hand	1,000

Plant & Machinery finally realized Rs. 10,000 and other assets realized Rs. 10,000. The liquidation expenses amounted to Rs. 500 and the liquidator was entitled to a remuneration of 5% on the amount realized excepting cash in hand and 2% on the amount distributed to the unsecured creditors. 10

(b) What do you mean by preferential creditors? State the rank of preferences to be followed by the liquidator while preparing his final statement of accounts. 5+9=14

6. (a) The following are the Balance Sheets of H. Ltd. and its subsidiary company S. Ltd. as on 31^st March, 2013 :

Liabilities	H Ltd.	S Ltd.	Assets	H. Ltd	S. Ltd.
Share Capital : Share of Rs.10 each fully paid	6,00,000	2,00,000	Machinery	3,00,000	1,00,000
General Reserve	1,50,000	70,000	Furniture	70,000	45,000
Profit & Loss a/c	70,000	50,000	Investment : 70% shares in S Ltd. at cost	2,60,000	__
Creditors	90,000	60,000	Stock	1,75,000	1,89,000
Bills payable	20,000	10,000	Debtors	55,000	30,000
			Bills Receivable	20,000	10,000
			Cash at Bank	50,000	10,000
			Preliminary Expenses	__	6,000
	9,30,000	3,90,000		9,30,000	3,90,000

H Ltd. acquired the shares of S Ltd. on 30^th June, 2012. On 1^st April, 2012, S Ltd. ’s General Reserve and Profit & Loss A/c balance stood at Rs. 60,000 and Rs. 20,000 respectively. Bills Receivable of S Ltd. include bills for Rs. 8,000 accepted by H Ltd. and creditors of S Ltd. include Rs. 20,000 due to H Ltd. No part of preliminary expenses was written off during the year ended 31^st March, 2013. 14

(b) Give in detail the particulars which shall be disclosed in the Balance Sheet of holding company regarding its subsidiaries and also state what documents shall be attached to the Balance Sheet of holding company regarding its subsidiaries. 14

Corporate Accounting Question Papers and Solutions (Dibrugarh University)

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