2014
CORPORATE ACCOUNTING
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. Answer as directed: 1x10=10
a) Remuneration paid to an auditor is shown in the statement of Profit and Loss as Other Expenses under the main head. [Fill in the blanks]
b) Write the meaning of Transfer Fee.
c) What are the various options to the shareholders on receiving the offer for right issue of shares?
d) The Provision for buy back of share is given in Section _______ of Companies Act 1956. [Fill in the blanks]
e) Discount/Loss on issue of debentures is treated as ‘Borrowing cost’. [State whether the statement is true or false]
f) A company cannot redeem its debentures at a discount. [State whether the statement is true or false]
g) In case of redemption, Companies Act states that at least _______ % of debentures must be redeemed out of profit. [Fill in the blanks]
h) Write the meaning of ‘Option price’ relating to a scheme of ESOP.
i) Cost reduction is one of the objectives of amalgamation. [State whether the statement is true or false]
j) In case of amalgamation in the nature of purchase, assets and liabilities may be shown at revalued figures. [State whether the statement is true or false]
2. Answer the following:
a) How would you deal with the following items while preparing the final accounts of a company - 2+2=4
1) Director’s fees.
2) Managerial remuneration.
b) Write four accounts of profits/reserves of which balances can be used for issue of bonus shares. 2
c) Barpeta Ltd. purchased a machine worth Rs. 99,000 from Darrang Ltd. and issued sufficient nos. of 10% debentures of Rs. 100 each at a premium of 10%, pass journal entry for the above (show calculations). 2
d) Name the different types/categories of the amalgamation for the purpose of accounting.
3. Answer the following:
(a) The following is the extracted of Trial Balance of Dhubri Ltd. as on 31.3.2014. 5
| | Rs. |
| Sales Purchases Custom duty Wages Salaries General Expenses Opening inventory Dividend received Machinery | 4,80,000 1,70,000 4,000 30,000 90,000 6,000 60,000 3,000 6,00,000 |
Prepare a statement of Profit and Loss for the year ended 31st March 2014 after considering the following information.
1) Closing inventory Rs. 90,000
2) Outstanding salary Rs. 3,000
3) Depreciation Machinery @ 10%
Or
Write a note on ‘Corporate Dividend tax’. 5
(b) Write five advantages of right issue. 5
Or
State the employees who are
1) Eligible to participate in ESOP and
2) Not eligible to participate in ESOP.
(c) On 1st April, 2012 Guwahati Ltd. issued 10,000 12% debentures of Rs. 100 each at a discount of 10% repayable in five years in annual equal installments.
Pass journal entries in the books of the company on that date of issue and show the treatment of discount of debentures. 5
Or
Discuss the treatment relating to expenses and losses on issue of debenture. 5
(d) Marykom Ltd. is taken over by Priyanka Ltd. on the following conditions:
1) The assets of Marykom Ltd. are valued at Rs. 6,20,000.
2) The liabilities of Marykom Ltd. are valued at Rs. 1,80,000.
3) Cash Rs. 1,40,000 paid to the shareholders of Marykom Ltd.
4) The balance of consideration is discharged by issue of equity shares of Rs. 100 each at Rs. 200 per share.
Show how the purchase consideration for amalgamation is discharged by Priyanka Ltd. 5
Or
Write a note on Net asset method for calculation of purchase consideration for amalgamation. 5
4. Answer as directed:
(a) From the following balances and other information Bajaj Ltd. prepare a Balance Sheet as on 31.3.2004 (as per Revised Schedule VI). 10
| | Rs. |
| Fixed assets Trade debtors Loose tools Cash in hand Unexpired insurance Advanced tax paid Share Capital General Reserve (1.4.2013) Securities Premium Trade Creditors Outstanding Salary Bills Payable Calls in advance Profit and Loss A/c (1.4.2013) Term Loan | 4,41,000 1,70,000 20,000 20,000 1,000 25,000 1,48,000 1,20,000 35,000 80,000 10,000 32,000 10,000 25,000 1,00,000 |
Other Information:
1) Share capital consists of 5,000 Equity shares of Rs. 15 each. Rs. 10 called and 1,000, 10% Preference Shares of Rs. 100 each fully paid.
2) Depreciation fixed by Rs. 35,000.
3) Closing inventory is valued at Rs. 35,000 and work-in-progress at Rs. 20,000.
4) Bills payable include a bill for Rs. 10,000 having due date of 1st May, 2015.
5) Fixed assets include Rs. 71,000 spent during the year for construction of new factory building. The work of which has not yet been completed.
6) Calls in arrears on Equity shares amounted to Rs. 2,000.
7) Provide Rs. 12,000 for taxation.
8) Profit before tax for the current year is Rs. 1,37,000.
9) Transfer Rs. 40,000 to General Reserve.
(b) The paid up capital of Tata Ltd. Rs. 10,00,000 consisting of 60,000 equity shares of Rs. 10 fully paid up and 50,000 equity shares of Rs. 10 each. Rs. 8 per share paid up.
The company has Rs. 25,000 in Securities Premium A/c, Rs. 35,000 in Capital Redemption Reserve, Rs. 1,50,000 in profit and loss A/c (Cr.) and Rs. 1,80,000 in General Reserve.
By way of bonus, the partly paid up shares are converted into fully paid up shares and the holders of fully paid up shares are also allotted fully paid up bonus shares in the same ratio.
Pass journal entries showing separately these two types of bonus issue. The company decided that there should be minimum reduction in free reserves.
Or
Write the conditions to be fulfilled by a company for buy-back of shares. 10
(c) On 1.4.2013, Bharat Ltd. issued 10,000 10% debentures of Rs. 100 each at a discount of 10%. These debentures are redeemable at a premium of 10% after 5 years. You are required to pass journal entry on issue of debentures and prepare Loss on issue of debentures A/c over the period. 10
Or
Eastern Ltd. issued 3,000, 10% debentures of Rs. 100 each. Pass journal entries on redemption and on transfer/adjustment of profit or loss on issue when:
1) The debentures are issued at a premium of 10% but are redeemable at a discount of 10%.
2) The debentures are issued at a premium of 5% and are redeemed at a premium of 5%.
(d) What are the accounting entries to be passed by a transfer company for: 10
1) Transfer of assets and liabilities taken over,
2) Consideration for amalgamation becomes due,
3) On receipt of purchase consideration,
4) On sale of assets not taken over by the purchasing company,
5) On payment of liabilities not taken over by purchasing company.
6) Liquidation expenses.
7) Profit/Loss on realization,
8) Payment of preference shareholders,
9) Transfer of share capital, accumulated profits etc to equity shareholders account.
Or
Discuss briefly the amalgamation in the nature of merger. 10
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