DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, DECEMBER 2017.
First Semester
CORPORATE ACCOUNTING
(Upto 2012-13 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — X 8 40 marks)
Answer any FIVE questions.
1. Describe the legal conditions for issuing shares at
discount.
2. State the provisions relating to the issue of bonus shares.
3. Explain the methods of computing purchase
consideration.
4. Prepare P L P L Appropriation a/c and from
the following:
Rs. Rs.
Income Tax 40,000 Advertisement 5,000
Bills payable 40,000 Dividends paid 50,000
Debentures 1,00,000 P&L a/c Cr 1,00,000
Loan from bank 12,000 Gross profit 1,30,000
O/S salaries 8,000 Salaries 10,000
Commission 12,000 Rent 5,000
Prepaid expenses written off 8,000 Prov. for taxation 12,000
Sub. Code
15
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5. Write down the treatment for profit prior to
incorporation.
6. Rohit Ltd agrees to purchase the business of Kapoor Ltd,
on the following terms:
For each of the 10,000 shares of Rs. 10 each in
Kapoor Ltd. 2 shares in Rohit Ltd of Rs. 10 each will
be issued at an agreed value of Rs. 12 per share.
In addition. Rs. 4 per share cash also will be paid.
8 Debentures worth Rs. 80,000 will be issued to
settle the Rs. 60,000, debentures in Kapoor Ltd.
Rs. 10,000 will be paid towards expenses of winding
up.
Calculate Purchase Consideration.
7. From the following balances, prepare fire revenue a/c for
the year ended 31.12.2007.
Rs.
Claims paid 4,80,000
Commission 2,00,000
Commission on reinsurance ceded 10,000
Claims intimated and accepted 60,000
but not paid 31.12.2007
Re-insurance premium 1,20,000
Bonus in reduction of premium 12,000
Claims outstanding on 01.01.2007 40,000
Claims intimated but not accepted 10,000
on 31.12.2007
Expenses of Management 3,05,000
Premium received 4,20,000
Additional provision for unexpired risk 20,000
Provision for unexpired risk on 01.01.2007 4,00,000
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8. Prepare Profit and Loss account of Suraksha Bank Ltd.
from the following:
Rs.
Interest received 1,60,000
Interest paid on deposits 84,000
Payments to employees 52,000
Commission Received 8,000
Brokerage 1,500
Advertisement 15,000
Printing and Stationery 7,700
Interest on borrowings 25,000
Directors fees and allowances 7,000
Taxes 3,000
SECTION B — 15 60 marks)
Answer any FOUR questions.
9. SB Ltd. issued 40,000 shares of Rs. 10 each at a premium
of 20% payable as follows: Rs. 2 on application, Rs. 5 on
allotment (including premium), Rs.2 on First Call and
Rs. 3 on Second Call.
Applications were received for 60,000 shares. 48,000
shares were allotted on pro-rata basis, and remaining
being cancelled and refunded. Money overpaid on
application was transferred to allotment. All the money
was received with the exception of first and final call on
1600 shares held by Mickey. Tom to whom 2000 shares
were allotted failed to pay the two calls. These shares
were forfeited and reissued to Donald for 8 per share.
Pass Journal entries and prepare a balance sheet.
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10. The following balances appear in the ledger of a company
as on 30.6.2015
Rs.
Equity Share Capital 20,00,00
Redeemable Preference
Share Capital (Fully Paid up) 20,00,000
General Reserve 6,00,000
Profit Loss a/c (Cr. balance) 17,00,000
Capital Reserve 10,00,000
The company decided to redeem the preference shares at
par out of its general reserve and undistributed profits.
Give journal entries to effect the redemption of preference
shares.
11. Raja Ltd was incorporated on 01.07.2004, which took over
the running business with effect from 01.01.2004. The
sales for the period upto 01.07.2004 was Rs. 2,70,000 and
the sales from 01.07.2004 to 31.12.2004 amounted to
Rs. 3,30,000.
The expenses debited to profit and loss account included:
Director's Fees 15,000
Bad Debts 1,800
Advertisement (Rs. 500 per month) 6,000
Salaries and General Expenses 32,000
Preliminary expenses written off 3,000
Gross profit was (01.01.2004 to 31.12.2004) 2,40,000
Ascertain the profit prior to incorporation.
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12. X Ltd agrees to acquire the assets excluding cash as on
31.12.2011 of Y Ltd. The Balance sheet of Y Ltd as on
that date was:
Liabilities Rs. Assets Rs.
Equity shares of
Rs. 100 each
3,00,000 Goodwill 60,000
General Reserve 80,000 Land and building 1,20,000
Debentures 50,000 Plant and machinery 2,00,000
Creditors 10,000 Stock 80,000
Profit and loss a/c 60,000 Debtors 30,000
Cash 10,000
5,00,000 5,00,000
The consideration was as follows:
A cash payment of Rs. 4 for every share of Y Ltd.
The issue of one share of Rs. 10 each (Market Value
Rs. 12.50) in the X Ltd. for every share in Y Ltd.
The issue of 1100 debentures of Rs. 50 each in
X Ltd. to enable debentures of Rs. 50 each in X Ltd.
to enable Y Ltd. to discharge its debentures at a
premium of 10%.
The expenses of liquidation of Y Ltd, amounting to
Rs. 4,000 were to be met by themselves.
Give the important ledger accounts in the books of
Y Ltd.
13. The following are the balance sheets of Sun Ltd and
Moon Ltd, prepared on 31st December 2006. On
1st January 2006, Sun Ltd acquired all the shares in
Moon Ltd, when the latter has a credit balance of
Rs. 35,000 on its profit Loss account.
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Balance sheet as on 31.12.2006
Liabilities Sun
Ltd.
Rs.
Moon
Ltd
Rs.
Assets Sun
Ltd.
Rs.
Moon
Ltd
Rs.
Share capital 3,00,000 2,00,000 Sundry Assets 2,20,000 4,00,000
(Equity shares
of Rs. 10 each)
Investments 3,60,000
General
Reserve
1,50,000 1,00,000 (4,000 shares
in S Ltd)
P L a/c 1,00,000 80,000
Sundry
creditors
30,000 20,000
5,80,000 4,00,000 5,80,000 4,00,000
Prepare consolidated balance sheet.
14. Prepare Balance sheet of Abhinava Bank, from the
following:
Debit Balance Rs. Credit Balance Rs.
Investment 32,00,000 Share capital
Premises 10,00,000 (80,000 shares of
Rs. 10 each)
8,00,000
Cash in hand 50,000 Statutory Reserve 7,00,000
Cash at bank 28,10,000 Fixed Deposits 15,00,000
Money at call and
short notice
3,00,000 Saving deposits 35,00,000
Interest paid 2,00,000 Current Accounts 70,00,000
Salaries 1,10,000 Borrowing from
banks
5,00,000
Loans and advances 70,00,000 Profit and loss
account
1,00,000
Bills Discounted 5,00,000 Interest received 5,00,000
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Debit Balance Rs. Credit Balance Rs.
Bills payable 4,00,000
Unclaimed
Dividends
80,000
Sundry creditors 90,000
1,51,70,000 1,51,70,000
15. Briefly explain any five of the Indian Accounting
Standards.
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