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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
M.Com.DEGREE EXAMINATION COMMERCE
FOURTHSEMESTER APRIL 2018
CO 4958- CORPORATE ACCOUNTS AND ACCOUNTING STANDARDS
Date: 08-05-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
Section: A
Answer All Questions: 10 x 2 20
What are Notes to Accounts?
What is Contingency?
What do you understand by Substance over form?
On 1-1-2009 A Ltd has 1800 equity shares outstanding. On 31-05-2009, it issued 600 equity shares for cash (without bonus claim). On 1-11-2009 it bought back 300 shares. Calculate weighted average number of shares as on 31-12-2009.
Define Holding Company.
What is intrinsic value of share?
What do you understand by Net Value Added?
What do you understand by Contingent Asset?
Write a short note on "Market Value Added".
10) A Ltd produces chemical, X which has following production cost per unit Raw Material Rs.5; Direct Labour RS.2; Direct Expenses Rs.3; Normal Capacity 5000 units per annum; Actual production 4000 units; Fixed Production Overhead RS.20,000 per annum. The company has 2000 units unsold stock lying with it at the end of year. You are required to value the closing stock.
Section B
Answer any four only: 4 x 10 40
11) Write a short note on: Cost of Control, Minority Interest, Advantage of preparation of Consolidated Balance Sheet. Mutual Obligations
12) Define "Value Added Statement? Give a rough format of a Gross Value Added Statement for a Manufacturing Firm.
13) Define "Impairment Loss". How would an impaired Asset be identified? What are the disclosure provisions relating to impairment of assets?
14) Determine the maximum remuneration payable to the part time directors and Manager of B Ltd.of Manufacturing Company under section 309 and 387 of the Companies Act 1956 from the following particulars:
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Before charging any such remuneration the P&L A/C showed a credit balance of Rs.23, 05,000 for the year ended 31st March 2010 after taking into account the following transactions:
Profit on sale of investments Rs.2, 05,000
Subsidy received from government Rs.4, 10,000
Loss on sale of fixed assets Rs.65, 000
Ex-gratia to an employee Rs.30, 000
Compensation paid to injured workman Rs.75, 000
Provision for taxation Rs.2, 79,000
Bonus to foreign technicians Rs.3, 12,000
Multiple shift allowance Rs.1, 00,000
Special depreciation Rs.75, 000
Capital expenditure Rs.5, 10,000
Company is providing depreciation as per section 350 of the Companies Act 1956.
15) Balance sheet of H.Ltd, and S.Ltd as on 31.12.2010 given below:
Liabilities HLtd. S.Ltd. Assets H.Ltd. S.Ltd.
Share Capital 10,000 5,000 Sundry Assets 17,000 10,000
(Rs.1 each)
General Reserve 5,000 4000 shares in
S.Ltd 5000
Creditors 3,000 3,200
P&L A/C 4,000 1,800
22,000 10,000 22,000 10,000
Shares were purchased by H.Ltd. in S.Ltd. on 30th June, 2010. On 1st January, 2010 the balance sheet of S.Ltd. showed loss of Rs.3, 000 which was written off out of the profits earned during 2010. Profits are assumed to accrue evenly throughout the year. Prepare consolidated Balance sheet.
16) What is Contingent Liability as per AS 29?
Write the areas where AS29 is not applicable.
17) The Balance Sheet of A Co. Ltd as on December 31, 2010 was as follows:

Liabilities Rs. Assets Rs.

Share Capital 100000 shares 1,00,000 Fixed Assets 90,000
of Re.1 each Current Assets 10,000
Sundry Liabilities 20,000 P L A/c 20,000
1,20,000 1,20,000

B Ltd absorbed the A Ltd and took over all the assets for Rs.72,000 payable
Rs.50,000 in shares of rupee 1 each and Rs.22,000 in cash in order to enable A
Ltd to pay off its liabilities and cost of winding up) Show Realization
Shareholders A/C and Cash A/C in the books of A Ltd.
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Section C
Answer any two only: 2 x 20 40
18) B Ltd is to absorb S Ltd. the purchase consideration is the issue of 5 shares of Rs.10 each at 10% premium for every 4 shares held in S Ltd. The Balance sheets on the date of Absorption were as under:
Liabilities B Ltd S Ltd Assets B Ltd S Ltd
Share Capital 20,00,000 12,00,000 Fixed Assets 16,00,000 8,00,000
(Rs.10 each)
Reserves 2,00,000 1,60,000 24000shres in
S Ltd 3,20,000
Creditors 4,00,000 2,40,000 20000shres in
B Ltd 2,40,000
Current Assets 6,80,000 5,60,000
26,00,000 16,00,000 26,00,000 16,00,000
Prepare ledger accounts in the books of S Ltd and journal entries in the books of B Ltd along with Balance sheet after the absorption.
19) X Ltd purchased 750 shares in Y Ltd on 01.07.2004. The following were their Balance Sheets on 31.12.2004.
Liabilities X Ltd Y Ltd Assets X Ltd Y Ltd
Share Capital 3,00,000 1,00,000 Buildings 2,05,000 1,25,0000
(Rs.100 each) Stock 1,00,000 80,000
Reserves 1,00,000 70,000 Debtors 1,00,000 40,000
Profit Loss A/C 1,00,000 60,000 Investment in 1,00,000
Creditors 80,000 40,000 Y Ltd.
Bills Payable 50,000 20,000 Bills Receivable 40,000 45,000
Current A/C X Ltd 20,000 Bank 60,000 20,000
Current Ltd 25,000
6,30,000 3,10,000 6,30,000 3,10,000
Additional Information:
Bills receivable of X ltd include Rs.10,000 accepted by Y Ltd.
Debtors of X Ltd include Rs.20,000 payable by Y Ltd.
A cheque of Rs.5,000 sent by Y Ltd on 28th December was not yet received by X Ltd on 31st
December 2004.
Profit and loss a/c of Y Ltd showed a balance of Rs.20,000 on 1st Jan, 2004.
You are required to prepare a consolidated Balance Sheet of X Ltd and Y Ltd.
20) When do you recognize revenue in the following cases as per AS9:
Sales of Goods
Rendering of services.
21) Define Purchase Consideration as per AS14.
Distinguish between Merger method and Purchase method of Accounting for
amalgamation
Discuss the various methods of calculating Purchase Consideration.