2017
CORPORATE ACCOUNTING
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. State whether True or False: 1x10=10
a) Expenses incurred at the time of formation of a company are termed as _______. (Fill in the blank)
b) Remuneration paid to an auditor is shown in the Statement of Profit and Loss as ‘Other Expenses’ under the main head _______. (Fill in the blank)
c) Write the meaning of ‘Right share’.
d) Write the meaning of ‘Purchase consideration’ for amalgamation.
e) Write the meaning of ‘option price’ relating to a scheme of ESOP.
f) “Financial gain is one of the advantages of amalgamation”. (State whether the statement is true or false)
g) Income tax payable on interest on debentures is shown in the Balance Sheet as ‘Other Payables’ under the main head _______. (Fill in the blank)
h) Write the meaning of redemption of debentures out of profit.
i) After the redemption of all debentures, the balance is the Sinking Fund Account is transferred to _______ Account. (Fill in the blank)
j) AS-17 deals with accounting for amalgamation. (State whether the statement is true or false)
2. Answer the following: 2x5=10
a) What are the two advantages of amalgamation?
b) Write any two characteristics of a debenture.
c) State the meaning of ‘Issue of bonus shares’.
d) State the accounting treatment of ‘Loss on issue of debentures’.
e) Explain the treatment of ‘Proposed dividend’ while preparing the final accounts of a company.
3. Answer any four of the following: 5x4=20
(a) Write the importance of ESOP.
Or
Write the objectives of ‘Right issue’.
(b) The following is the extract of Trial balance of Kamrup Tea Ltd. as on 31.03.17:
| | Rs. |
| Sales Purchases Opening inventory Purchase return Salaries Dividend received Carriage inward Advertisement Staff welfare expenses Dividend paid | 6,00,000 4,50,000 1,40,000 20,000 1,00,000 12,000 1,000 15,000 6,000 16,000 |
Prepare a Statement of Profit and Loss for the year ended 31st March, 2017 after considering the additional information given below:
1) Closing inventory on 31.03.17 Rs. 2,00,000.
2) Outstanding salary Rs. 5,000.
3) Brahmaputra Ltd. having a paid up capital of Rs. 6,00,000 divided into 60,000 shares of Rs. 10 each has a Reserve of Rs. 4,25,000. The company has decided to declare bonus out of the Reserve and to distribute the same in the form of bonus shares of Rs. 10 each as fully paid up to the existing shareholders in the ratio of one bonus share for every five shares held in the company.
Calculate the amount of bonus to be declared and show the journal entries in the books of the company.
(c) Write any five points of distinctions between amalgamation in the nature of merger and amalgamation in the nature of purchase.
(d) Write a note on ‘Corporate Dividend Tax’.
(e) Indian Traders Ltd. issued 1,000, 14% Debentures of Rs. 100 each at par on 1.1.2015, under the following terms of issue:
1) Debenture interest is annually payable on 31st December every year; and
2) 1/5th of the debentures are annually redeemable, the 1st redemption occurring on 31.12.2017.
Pass journal entries for the years 2015 and 2016.
4. Answer the following questions: 10x4=40
(a) From the following balance of NER Ltd. as on 31st March, 2017, prepare a Balance Sheet as per Companies Act, 2013: 10
| | Rs. |
| 8% Debentures Preference Share Capital Finished goods Fixed Assets Stores Debtors Equity Share Capital General Reserve Securities Premium Provision for Taxation Investments Loose tools Cash balance Trade Creditors Term Loans | 8,00,000 4,00,000 10,08,000 41,00,000 4,50,000 10,00,000 11,68,200 21,00,000 6,25,000 2,00,000 5,55,200 1,75,000 2,50,000 11,00,000 11,45,000 |
(b) Ganesh Traders Ltd. has Rs. 5,00,000 in Equity shares of Rs. 10 each. It has Rs. 90,000 in General Reserve and Rs. 40,000 in Securities premium. The company had passed necessary resolutions to buy back 10,000 Equity shares at par. However, for the purpose of giving effect to the resolution, the company issued Rs. 40,000, 10% Debentures at 5% discount repayable after five years at par. Give the journal entries relating to the resolution.
Or
State the meaning of ‘Buy back of shares’ and the accounting entries to be made for the same.
(c) Blue Sky Ltd. issued 5,000, 8% debentures of Rs. 100 each. Pass journal entries on issue and redemption when:
1) The debentures are issued at a premium of 10% and are redeemable at a discount of 10%.
2) The debentures are issued at a premium of 5% and are redeemable as a premium of 10%. 10
Or
Nezone Ltd. issued 5,000, 9% debentures of Rs. 100 each at a discount of 10% on 1.4.2016. 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 the Loss on issue of debentures Account over the period. 3+7=10
(d) Show the accounting entries in the books of the Selling Company. 10
Or
Explain the meaning and objectives of amalgamation of companies. 4+6=10
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