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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.Com.DEGREE EXAMINATION -COMMERCE
SIXTH SEMESTER APRIL 2018
CO 6610- ADVANCED CORPORATE ACCOUNTING
Date: 21-04-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
PART A
Answer ALL the Questions: (10x2=20 marks)
1. What is meant by Non- Performing Assets?
2. Schedule 13 relates to Schedule 15 relates to
3. What is Re-insurance?
4. What is meant by Surrender Value?
5. two or more companies go into liquidation to form a new company, it is called
The price paid by the transferee company to Transferor Company is called
6. H Ltd. acquired 75% of shares in S Ltd.on 1-07-2012 the balance sheet of S Ltd. showed Reserve Fund
balance on 1-01-2012 Rs.40,000, profit earned during 2012 Rs.60,000 and preliminary expenses
unwritten off Rs.20,000. Calculate capital and revenue profits.
7. What is Purchase Consideration?
8. Define Subsidiary Company.
9. What is Minority Interest?
10. What is statement of affairs?
Part B
Answer any Fourquestions: (4x10=40)
11. The following balances are extracted from the books of Aadhar bank Ltd., as on 31st march, 2016.
particulars
Debit
Rs.
Credit
Rs.
Bills discounted
15,90,000

Rebate on bills discounted on 31st march,2015

35,176
Discount on bills discounted

2,34,128
Interest earned

6,76,342
An analysis of the bills discounted is as follows:
Amount
Rs.
Due date
Rate of Discount

1,85,000
May 20,2016
11%

2,40,000
June 18,2016
12%

5,30,000
June 6,2016
12%

6,10,000
July 14,2016
14%
Calculate rebate on bills discounted and show necessary journal entries.
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12. Explain the following terms: a Reinsurance, Claims, Commission on reinsurance ceded.
The life insurance fund of Hind Life Assurance Ltd showed a balance of Rs.55, 00,000 on 31st March,
2016. The dividend proposed for 2015-2016 was Rs.3, 00,000. The company's actuarial valuation
revealed a net liability of Rs.41, 00,000 as on 31st March, 2016.
An interim bonus of Rs.75, 000 was paid policy holders during the valuation period. Prepare a
statement showing the amount available to the policy holders as bonus.
13. The Breakfast Foods Ltd, went into voluntary liquidation on 31st march, 2014. The balances in its books were.
Liabilities
Rs.
Assets
Rs.
Share capital:
Authorized and Subscribed:
5,000 Preference shares of Rs.100 each, fully paid
5,00,000
Land and buildings
2,50,000
2,500 equity shares of Rs.100 each, Rs.75 paid
1,87,500
Machinery and plant
6,25,000
7,500 equity shares of Rs.100 each, Rs.60 paid
4,50,000
Patents
1,00,000
Mortgage debentures
2,50,000
Stock
1,37,500
Interest outstanding
12,500
Debtors
2,75,000
Creditors
3,62,500
Cash at bank
75,000
Profit and loss account
3,00,000
17,62,500
17,62,500
The liquidator is entitled to a commission of on all assets realized except cash and on amount disturbed among unsecured creditors other than preferential creditors.
Creditors include preferential creditors Rs.37, 500 and a loan for Rs.1, 25,000 secured by a mortgage on land and buildings. The preference dividends were in arrears for two years. The assets realized as follows:
Land and buildings Rs.3, 00,000, Machinery and Plant Rs.5,00,000, Patents Rs.75,000, Stock Rs.1,50,000, Sundry debtors Rs.2,00,000.The expenses of liquidation amounted to Rs.27, 250. Prepare the liquidators final statement of account.
14. On 1-07-2011, X Ltd., acquired 60% shares of Y Ltd. (with the total capital of
Rs.5,00,000) for Rs.3, 80,000. The Balance Sheet of Y Ltd., showed a P L A/c balance on
2011 Rs.1, 20,000 and profit for the year 2011 Rs.1, 00,000. Calculate the value of Goodwill or
Capital reserve.
S Ltd. has capital of Rs.15, 00,000 in shares of Rs.100 each out of which, H Ltd. purchased 75%
shares at Rs.17, 50,000. The profits of S Ltd. at the time of purchase of shares by H Ltd. were Rs.7,
50,000. S Ltd. decided to make a bonus issue out of capital profits of one share of Rs.100 each fully
paid for every three shares held. Calculate the cost of control after the issue of bonus shares.
15.The following is the balance sheet of X Ltd. as on 31-03-2006
Liabilities
Rs.
Assets
Rs.
Share Capital: 2,00,000 shares of Rs.10 each
20,00,000
Land Building
10,00,000
General Reserve
2,50,000
Plant Machinery
15,00,000
Dividend equalization reserve
2,00,000
Furniture
25,000
P L A/c
51,000
Stock
6,00,000
12% Debentures
10,00,000
Work-in-progress
3,00,000
Sundry Creditors
3,00,000
Cash at bank
1,26,000
Debtors
2,50,000
38,01,000
38,01,000
The company was absorbed by A Ltd. on the above data. The consideration for the absorption is the discharge of the debentures at a premium of 5%taking over the liability in respect of sundry creditors and a payment of Rs.7 in cash and one share of Rs.5 in A ltd. at the market value of Rs.8 per share for every share in X Ltd. The cost of liquidation of Rs.15, 000 is to be met by the purchasing company.
Pass journal entries in the books of A Ltd.`
16. Give the proforma of the Balance Sheett along with its schedule for the banking company.
17. Write short notes on: Reserve for Unexpired Risk Bonus in Reduction of Premium Double
Insurance
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Part C
Answer any TWOquestions: (2x20=40)
18. On 31st March, 2016 the following balances stood in the books of Asian Bank Ltd., after preparation of
its profit and loss account.
particulars
Rs.(in 000s)
Share capital issued and subscribed
4,000
Reserve fund (under section 17)
6,200
Fixed deposits
42,600
Savings bank deposits
19,000
Current accounts
23,200
Money at call and short notice
1,800
Investments
25,000
Profit and loss account on 1.4.2015
1,350
Dividend for 2014-15
400
Premises
2,950
Cash in hand
380
Cash with RBI
10,000
Cash with other banks
6,000
Bills discounted and purchased
3,800
Loans, cash credit and overdraft
51,000
Bills payable
70
Unclaimed dividend
60
Rebate on bills discounted
50
Short loans (borrowings from other banks)
4,750
Furniture
1,164
Other assets
336
Net profit for 2015-16
1,550
Prepare balance sheet for the bank for the year ending 31st March, 2016.
19. Prepare revenue account of Universal Life Assurance Company Ltd from the following balances
extracted from its books as on 31st March, 2015.
Rs.(000)
Life Assurance Fund on 1.4.2014
7,50,000
Premium on direct business
4,80,000
Re-insurance premium
55,000
Consideration for annuities granted
68,000
Annuities paid
17,500
Dividend paid
15,000
Claims paid
1,90,000
Re- insurance recoveries
30,000
Claims outstanding on 1.4.2014
12,000
Commission paid
26,000
Commission on reinsurance accepted
9,000
Commission on reinsurance ceded
10,000
Surrenders
20,000
Loss on sale of investments
6,500
Management expenses
45,000
Legal expenses for settlement of claims
10,000
Interest from investments NET
18,000
TDS on income from investments
2,000
Rent, rates and taxes
12,000
Printing and stationery
8,500
Depreciation
13,000
Additional information as on 31.3.2015: Rs.
1. Claims outstanding 15,000
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2. Management expenses due 11,000
3. Premiums outstanding 16,000
4. Interest accrued on investments 4,500
20. The following are the balance sheets of A Ltd and B Ltd as on 31st March, 2016.
Liabilities
A Ltd
Rs.
B Ltd
Rs.
Assets
A Ltd
Rs.
B Ltd
Rs.
Equity shares of Rs.10 each
4,00,000
2,50,000
Land and buildings
2,00,000
3,00,000
11% preference shares of Rs.100 each

1,00,000
Investment:20,000
Equity shares in B Ltd
3,40,000

General reserve
70,000
50,000
300 10% debentures in B Ltd
30,000

Profit and loss account (before appropriation for dividends)
40,000
30,000
Stock
70,000
60,000
10% Debentures (Rs.100 each)
2,00,000
1,00,000
Debtors
60,000
1,00,000
Creditors
40,000
30,000
Cash and bank
50,000
1,00,000
7,50,000
5,60,000
7,50,000
5,60,000
Additional information:
A Ltd acquired equity shares in B Ltd on 1.4.2015.
General reserve of B Ltd after appropriation of dividend on 1.4.2015 was Rs.30,000.
(iii).Dividend for 2015-16 has not been paid.
Profit and loss account of B Ltd as on 1.4.2015 was Rs.10,000.
Prepare a consolidated balance sheet.
21. The following are the abridged balance sheets of P Ltd and S Ltd as on 31st March, 2009.
(Rs. In 000)
Liabilities
P Ltd
Rs.
S Ltd
Rs.
Assets
P Ltd
Rs.
S Ltd
Rs.
Equity share capital-Rs.10 each
8,000
3,000
Fixed assets
11,000
4,730
10% Preference share capital Rs.100 each

1,000
Current assets
4,000
1,970
General reserve
4,610
980
Statutory reserve
390
125
Profit and loss a/c
563
355
12% debentures

990
Current liabilities
1,437
250
15,000
6,700
15,000
6,700
On April2009 P Ltd takes over S Ltd on the following terms:
P Ltd will issue 50,000 equity shares of RS.10 each at par to the equity shareholders of S Ltd.
P Ltd will issue 11,000 10% preference shares of RS.100 each at par to the preference
shareholders of S Ltd.
(iii). the debenture holders of S Ltd will be converted into a equal number of 12.5% debentures of the
same denomination.
You are informed that statutory reserves of S Ltd are to be maintained for two more years.
You are required to show the balance sheet of P Ltd immediately after the above mentioned
scheme of amalgamation has been implemented assuming that the amalgamation is in the nature
of merger.