M.Com. DEGREE EXAMINATION, NOVEMBER 2017
Third Semester
ADVANCED CORPORATE ACCOUNTING
(CBCS 2016 onwards)
Time 3 Hours Maximum 75 Marks
Part A x 3 15)
Answer all questions.
All questions carry equal marks.
1. What do you mean by forfeiture and reissue of shares?
2. Gajendra Industries Ltd. provides the following
information. You are required to calculate the profit prior
to and after incorporation. The ratios of the sales between
pre and post incorporation periods are
Time Ratio Sales ratio Gross Profit
Rs. 5,00,000. The expenses are
Rs. Rs.
Salaries 96,000 Preliminary expenses 1,00,000
General expenses 12,000 Directors fee selling
Discount 40,000 expense 18,000
Advertisement 50,000 Stationery 7,000
Rent 5,000 2,000
Prepare a statement showing profit before and after
incorporation.
3. What are the types of purchase consideration?
Sub. Code
611301
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4. What is meant by holding company?
5. What is the purpose of accounting statement?
Part B x 10 50)
Answer all questions choosing either or
6. State the important provisions relating to
redemption of Preference shares.
Or
Explain the procedure under companies Act relating
to the issue of bonus shares.
7. America Chemicals Co. Pvt. Ltd. was incorporated
on 1 July 2015 to take over the business carried on
by Arjun Bros. as a going concern with effect from
1 April 2015. The following is the profit and loss
account for the year ended 31 March 2016 of
America Chemicals Pvt. Ltd.
Rs. Rs.
To Opening stock 6,00.000 By Sales 15,00,000
To Purchases 8,75,000 (Up to 30th June
To gross Profit 3,75,000 2015 Rs. 5,00,000)
By Closing stock 3,50,000
18,50,000 18,50,000
To administration
expenses
90,000 By Gross Profit 3.75,000
To Directors fee 15,000
To Selling expenses 1,80,000
To audit fee 5,000
To preliminary
expenses
15,000
To Net Profit 70,000
3,75,000 3,75,000
Prepare a statement showing the profit prior to and
after incorporation.
Or
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Big Co. Ltd., is a company with an authorized
capital of Rs. 5,00,000 divided into 5,000 equity
share of Rs. 100 each. On 31.3.2016, 2,500 share
were fully called up
The following are the balance extracted from the
ledger of the company as on 31.3.2016.
Rs. Rs.
Stock 50,000 Advertising 14,300
Sales 4,25,000 Debtors 38,700
Purchases 3,00,000 Creditors 35,200
Wages 70,000 Plant and
machinery
80,500
Discount allowed 4,200 Furniture 17,100
Insurance upto
30.6.2016
6,720 Reserves 25,000
Salary 18,500 Loan from M.D 15,700
Rent 6,000 Bad debit 3,200
General Expenses 8.950 Calls in Arrears 5,000
Profit and Loss
Account
6.220 Bonus to
employees
4,700
Printing and
Stationary
2,400 Bank 1,30,000
Discount received 3.150
You are required to prepare trading and Profit
and Loss Account for the year ended 31.3.2016
and the Balance sheet of the company as on that
date. The following further information is given
below
Closing Stock Rs. 1,91,500
Outstanding liabilities: Wages Rs. 5,200;
salary Rs. 1.200; Rent 600
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Deprecation to be charged on Plant and
Machinery and Furniture at 15% and
10% respectively
A tax provision of Rs. 10,000 is to be
made
Dividend on paid up share capital is
to be provided
8. Following is the balance sheet of Lotus Ltd. As on
31 March 2016.
Rs. Rs.
Share capital 2,50,000
Reserves 1,00,000 Land and building 3,00,000
Bank loan 2.00,000 Furniture 2,00,000
Creditors 1,50,000 Stock 1,00,000
Debtors 50,000
Profit and Loss A/c 50,000
7,00,000 7,00,000
Lotus Ltd. Was absorbed by Mani Ltd on a
purchase consideration of Rs. 6,00,000 payable
Rs. 4,00,000 in cash and 20.000 shares of Rs. 10
each. Liquidation Expenses were Rs. 0,000. Give
journal entries and ledger accounts in the books
of Lotus Ltd. Also, pass journal entries in the
books of Mani Ltd.
Or
The following is the summarized balance sheet of
Careless Ltd. As at 31 March 2016.
Liabilities Rs. Assets Rs.
1,00,000 equity shares of Sundry asset 4,30,000
Rs. 10 each, fully paid 10,00,000 Profit and loss a/c 5,70,000
10,00,000 10,00,000
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The management of the company feels that the worst is
over and adopts a scheme of reconstruction reducing all
its equity shares into an equal number of fully paid
equity shares of Rs. 4 each.
Pass journal entries and prepare the balance sheet
immediately after the reconstruction.
9. Balance sheet of H Ltd And S Ltd. as at
31st March 2016 are given below
H Ltd S Ltd Assets H Ltd S Ltd
Rs. Rs. Rs. Rs.
Share capital 5,00,000 2,00,000 Fixed assets 3,00,000 1,00,000
Reserves 1,00,000 50,000 60% shares in S Ltd.
Creditors 80,000 60,000 (Acquired on
31.3.2016) 1,62,000
Current assets 2,18,000 2,04,000
Preliminary expenses 6,000
6,80,000 3,10,000 6,80,000 3,10,000
On 31 March 2016, S Ltd. revalued its fixed assets
at Rs. 1,10,000. Prepare the consolidated balance
sheet of H Ltd. and, its subsidiary S Ltd as at
31 March 2016.
Or
Ganesh Ltd purchased 60% shares of Muruga Ltd.
on 1 January 2014 when the balance in their Profit
Loss A/c and general reserves were Rs. 1,50,000
and Rs. 1,60,000 respectively. On 31 December
2014, the balance sheet of Y Ltd. showed Profit
Loss A/c balance of Rs. 4,00,000 and general reserve
of Rs. 3,00,000. Calculate capital profit and revenue
profits.
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10. The following information is available for the year
1998 in the books of Jyothi Ltd. to its suppliers and
customers.
Particulars 1.1.1998 31.12.1998
Trade debtors 3,60,000 4,00,000
Trade creditors 2,00,000 1,60,000
The average age of the debtors and creditors is two
months. The following index number is applicable.
November 1997 480
December 1997 500
November 1998 560
December 1998 580
You are required to calculate Monetary working
Capital Adjustment (M.W.C.A) as required under
Current Cost Accounting method.
Or
Tigron Ltd. Provides you the following data
computed as per CCA method and requests you to
prepare its Current Cost Profit and Loss account for
the year ended 31 March 1996.
Rs.
Net Profit before Interest and tax 3,25,000
Interest paid on loans 75,000
Provision for Tax needed 1,25,000
Proposed Dividend 50,000
Adjustments Computed
COSA 45,000
MWCA 7,500
Deprecation Adjustment 50,000
Gearing Adjustment 39,875
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Part C x 10 10)
Compulsory
11. From the following information, you are required to
prepare the Profit and Loss Account of the Bajaj Bank for
the year ended 31 March 2016 under the provisions of the
Banking Regulation Act.
Rs. Rs.
Interest on loans 5,18,000 Rent, Taxes and Lighting 36,000
Interest on Cash credit 4,46,000 Auditors fees 2,400
Interest on Overdraft 1,08,000 Postage Telephones 2,800
Discount on bills
discounted
3,90,000 Sundry Charges 2,000
Commission, Exchange Advertisement Publicity 1,400
and brokerage 16,400 Directors fee 6,000
Lockers rent 1,400 Printing and Stationery 500
Transfer fee 700 Law charges 1,400
Interest in Fixed Deposit 5,54,000 Payment to employees 1,08,000
Interest on saving bank Deprecation on banks
deposit 2,20,000 property 10,000
Supplementary information
Rebate on bills discounted Rs. 98,000
Provide for Bad Debts Rs. 58,000.