DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, DECEMBER 2017.
Second Semester
CORPORATE ACCOUNTING
(Upto 2012-13 Academic Year 2013 Calendar Year)
Time Three hours Maximum 100 marks
PART A — X 8 40 marks)
Answer any FIVE questions.
1. What is forfeiture of Shares? State the procedure for
forfeiting shares.
2. Ganesh Ltd., was registered on 1.7.2014 to acquire the
running business of Suneel Co., with effect from
1.1.2014. The following was the profit and Loss A/c of the
company on 31-12-2014.
Particulars Rs. Particulars Rs.
To office expenses 54,000 By Gross Profit b/d 2,25,000
To Formation expenses
(written off) 10,000
To Stationery Postage 5,000
To Selling Expenses 60,000
To Directors' Fees 20,000
To Net Profit 76,000
2,25,000 2,25,000
Prepare a statement showing profit earned by the
company in the pre and post incorporation periods. The
total sales for the year took place in the ratio of 1:2 before
and after incorporation respectively.
Sub. Code
25
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3. Write a note on
Internal Reconstruction
External Reconstruction.
4. The Balance Sheets of C Ltd. and D Ltd. as at
31st December, 2015 are as follows
Liabilities C Ltd D Ltd Assets C Ltd D Ltd
Rs. Rs. Rs. Rs.
Share capital
(Rs. 10 each)
2,00,000
1,00,000
Sundry assets 1,32,500 1,38,200
General
Reserve
18,000
20,000
Goodwill 20,000
Profit Loss
A/c
24,500
23,000
Shares in D Ltd.
at cost 1,40,000
Creditors 30,000 15,200
2,72,500 1,58,200 2,72,500 1,58,200
In the case of Ltd., profit for the year ended
31st December 2015 is Rs. 12,000 and transfer to
reserve is Rs. 5,000. The holding of C Ltd. in D Ltd
is 90% acquired on 30th June 2015. Draft a
consolidated Balance Sheet of Ltd. and its
subsidiary.
5. What are the difference between Capital Profit and
Revenue Profit?
6. From the following particulars, prepare a profit and loss
account of New Bank Ltd, for the year ended 31.12.2015.
Particulars Rs. Particulars Rs.
Interest on loans 2,60,000 Interest on Cash
Credits 2,25,000
Interest on fixed deposits 2,80,000 Rent and Taxes 20,000
Rebate on bills discounted 50,000 Interest on overdrafts 56,000
Commission charged to
customers
9,000
Directors and Auditor
Fees 4,500
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Particulars Rs. Particulars Rs.
Establishment of Expense 56,000 Interest on saving
bank A/c 70,000
Discount on bills discounted 2,00,000 Postage and telegrams 1,500
Interest on current accounts 45,000 Sundry charges 1,800
Printing and Advertisement 3,000
7. Determine the maximum remuneration payable to the
part time directors and Manager of Bharat Ltd.
manufacturing company) under Sections 309 and 387
of the Companies Act 1956 from the following
particulars
Before charging any such remuneration, the Profit Loss
account showed a credit balance of Rs. 23,05,000 for the
year ended 31st March 1998 after taking into account the
following matters
Rs.
Profit on sale of investments 2,05,000
Subsidy received from government 4,10,000
Loss on sale of fixed assets 65,000
Ex-gratia to an employee 30,000
Compensation paid to injured workman 75,000
Provision for taxation 2,79,000
Bonus to foreign technicians 3,12,000
Multiple shift allowance 1,00,000
Special depreciation 75,000
Capital expenditure 5,10,000
Company is providing depreciation as per Section 350 of
the Companies Act 1956.
8. Explain about Discloser of Accounting Policies.
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PART B — X 15 60 marks)
Answer any FOUR questions.
9. X Co. Ltd. issued 4,000 shares of Rs. 10 each at a
premium of Rs. 2 per share.
The amount was payable as under
On application Rs. 3 per share
On allotment Rs. 4 per share (including premium)
On first call Rs. 3 per share
On second call Rs. 2 per share
The company received applications for 5,000 shares and
the allotment was made as under
Applicants for 200 shares Nil
Applicants for 800 shares Full
Applicants for 4,000 shares 3,200 shares
All moneys were duly received except the first call on 200
shares and final call on 300 shares. Pass journal entries
and prepare balance sheet of the company.
10. Moon and Star Co.Ltd is a company with an authorized
capital of Rs 5,00,000 divided into 5,000 equity shares of
Rs. 100 each on 31-12.2015 of which 2,500 shares were
fully called up. The following are the balances extracted
from the ledger as on 31.12.2015.
Trail balance of Moon and Store Co. Ltd.
Debit Rs. Credit Rs.
Opining Stock 50,000 Sales 3,25,000
Purchase 2,00,000 Discount 3,150
Wages 70,000 P/L Account 6,220
Discount Allowed 4,200 Creditors 35,200
Insurance (Upto 31.3.2016) 6,720 Reserves 25,000
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Debit Rs. Credit Rs.
Salaries 18,500 Loan from M.D 15,700
Rent 6,000 Share Capital
General expenses 8,950 (2500 X Rs. 100) 2,50,000
Printing 2,400
Advertisement 3,800
Bonus 10,500
Debtors 38,700
Plant 1,80,500
Furniture 17,100
Bank 34,700
Bad debits 3,200
Calls in Arrears 5,000
6,60,270 6,60,270
You are required to prepare profit and loss account for
the year ended 31.12.2015 and a balance sheet as on that
date. The following further information is given
Closing stock was valued at Rs 1,91,500
Depreciation on plant at 15% and on furniture at
10% should be provide.
A Tax provision of Rs 8,000 is considered necessary.
The directors declared an interim dividend on
15.8.85 for six months ending June 30, 2015 6%.
11. What are the difference between Amalgamation and
Absorption?
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12. The following are the Balance Sheets of H Ltd. and its
subsidiary S Ltd as on 31.3.2015.
Liabilities H Ltd S Ltd Assets H Ltd. S Ltd
Rs. Rs. Rs. Rs.
Share capital Machinery 3,00,000 1,00,000
Rs.10 each fully
paid
6,00,000
2,00,000
Furniture 70,000 45,000
General Reserve 1,50,000 70,000 70% shares in
S Ltd. at cost 2,60,000
Profit Loss A/c 70,000 50,000 Stock 1,75,000 1,89,000
Creditors 90,000 60,000 Debtors 55,000 30,000
Cash at bank 50,000 10,000
Preliminary
expenses 6,000
9,10,000 3,80,000 9,10,000 3,80,000
H Ltd acquired the shares of S Ltd. on 30th June 2014. On
1st April 2014, S Ltd's general reserve and profit and loss
account stood at Rs. 60,000 and Rs. 20,000 respectively.
No part of the preliminary expenses was written off in
the year ended 31.3.2015.
Prepare consolidated balance sheet of H Ltd. and its
subsidiary S Ltd. as on 31.3.2015, giving all your working
notes separately.
13. The following balances are abstracted from the books of
new Bharat life insurance corporation, as on 31-12-2015.
Particulars Rs. Particulars Rs.
Life Assurance Fund
(1.1.2015)
15,00,000
Claims paid during the
year 64,900
Premiums 4,96,000 Annuities 2,050
Consideration for
annuities Granted
15,000
Bonus in reduction of
premiums 1,600
Interest on Dividends 1,00,000 Medical fees 2,400
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Particulars Rs. Particulars Rs.
Finance for Revival of
polices
750
Surrenders
Commission
4,000
18,650
Reinsurance premium 20,750 Management Expenses 22,000
Claims outstanding
(1.1.2015)
4,500
Income Tax on
Dividends 8,500
Prepare revenue account after making the following
adjustments.
Outstanding balances Rs.
Claims 14,000
Premiums 4,600
Further bonus for premium 2,400
Claim under reinsurance 8,000
14. The following is the Trial Balance of Big Bank Ltd., as on
31.12.2015.
Particulars Debit Credit
Rs. Rs.
Share capital 7,500 shares of
Rs. 100 each
7,50,000
Loans and advances 80,20,000
Bank premises 5,32,500
Government securities 15,30,000
General reserve 4,50,000
Deposits 96,46,000
Interest and discounts 8,00,000
Interest on deposits and borrowings 2,00,000
Balance with other banks 1,00,500
Money at call and short notice 85,500
General expenses 82,500
Rent, rates and taxes 6,900
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Particulars Debit Credit
Rs. Rs.
Director's fees 4,200
Auditor's fees 1,200
Bills discounted 90,000
Furniture (Depn. upto 1.1.2015
Rs. 20,000) 80,000
Borrowings from other banks 1,05,000
Salaries and allowances 85,500
Computer 35,000
Profit Loss A/c 1.1.2015 37,500
Miscellaneous income 300
Commission 10,000
Interim dividend 30,000
Cash in hand and with RBI 9,15,000
1,17,98,800 1,17,98,800
Considering the following information furnished, prepare
Profit and Loss Account for the year ending 31.12.2015
and balance sheet as on that date in the proper form.
Bills worth Rs. 50,000 were received for collection.
Interest accrued on investment Rs. 12,000.
Rebate on bills discounted Rs. 15,000.
Debts amounting to Rs, 65,000 were doubtful and
provision is to be made.
Depreciation to be charged at 10% on the original
cost of the furniture.
15. What is Accounting Standards? Explain the need for
Accounting Standards?