DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2017.
First Semester
CORPORATE ACCOUNTING
(Upto 2012 2013 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
SECTION A — 8 40 marks)
Answer any FIVE questions.
All questions carry equal marks.
1. Sakthi Ltd. purchased Land and Buildings costing
Rs. 20,00,000 and in payment allotted 20,000 equity
shares of Rs. 100 each as fully paid. Further the company
issued 40,000 equity shares to the public. The shares
were payable as follows:
On application Rs. 20; On allotment Rs. 40;
On call Rs. 40.
The public applied for all the shares which were allotted.
All moneys were received.
Give journal entries and the balance sheet of the
company.
2. Kumar Co. Ltd was formed with a capital of Rs. 10,00,000
in Rs. 10 shares, the whole amount being issued to the
public. The underwriting of these shares was as follows:
A 35,000 B 30,000 C 20,000
D 10,000 E 3,000 F 2,000
Sub. Code
15
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All the marked application forms were to go in relief of
the underwriters whose stamp they bear. The application
forms marked by the underwriters were:
A 10,000 B 2,25,000 C 20,000
D 7,500 E 5,000 F Nil
Applications for 20,000 share were received on forms not
marked. Draw up a statement showing the number of
shares each underwriter had to take up.
3. From the following Profit and Loss Account of Raja Ltd.
for the ended 31.12.2012 and additional data given,
calculate commission due to Managing director at of
net profit. Salary of Managing Director is to be treated as
part payment of the commission:
Profit and Loss A/c for the year ended 31.12.2012
Rs. Rs.
To opening stock 11,000 By sales 1,70,000
To bonus (including
Rs. 500 for 2011)
5,000
By closing stock 15,000
To director's fees 3,000 By other incomes
To managing director Discount 2,000
Salary 2,000 Profit on sale of
fixed assets 1,000
Commission 1,000
To development rebate
reserve
800
To provision for tax 3,000
To establishment
expenses
40,000
To loss on sale of
investments
200
To net profit c/d 1,22,000
1,88,000 1,88,000
The book value of the fixed assets sold was Rs. 2,000 and
their original cost was Rs. 2,600.
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4. Anbu Ltd. and Balu Ltd. decided to amalgamate on
31-3-2013. On that date the position was:
Anbu Co.: Net Assets Rs. 38,700;
Net Liabilities Rs. 12,900;
Balu Co.: Net Assets, Rs. 28,440;
Net Liabilities Rs. 7,440.
The share capital of the combined company is to be 2,400
preference shares of Rs. 10 each and balance in equity
shares of Rs. 5 each fully paid. The allocation of shares
between Anbu Co. and Balu Co. is equal extent that the
surplus capital of any company is to be discharged in
preference shares. Calculate purchase consideration and
show the details of distribution of shares.
5. On 31st March, 2012 the Balance sheets of H Ltd. and its
subsidiary S Ltd. Stood as follows:
Liabilities H Ltd.
Rs.
S Ltd.
Rs.
Assets H Ltd.
Rs.
S Ltd.
Rs.
Equity
Share
Capital
8,00,000
2,00,000
Fixed
Assets 5,50,000 1,00,000
General
Reserve
Profit and
Loss A/c
1,50,000
90,000
70,000
55,000
75%
Shares
in
S Ltd.
(at cost) 2,80,000 —
Creditors 1,20,000 80,000 Stock 1,05,000 1,77,000
Other
Current
Assets 2,25,000 1,28,000
11,60,000 4,05,000 11,60,000 4,05,000
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Draw a consolidated Balance Sheet as at 31st March, 2012
after taking into consideration the following information
H Ltd., acquired the shares on 31st July, 2011
S Ltd., earned a profit of Rs. 45,000 for the year
ended 31st March, 2012.
6. A life fund has been ascertained without adjusting the
following. Calculate the correct Life Assurance Fund.
Rs.
Life assurance fond as ascertained 56,70,000
Unadjusted items:
Premium outstanding 2,30,000
Claims outstanding 1,80,000
Claims covered under re-insurance 20,000
Claims of last year paid during the year 5,000
Bonus paid in cash 14,000
Bonus utilized in reduction of premium 16,000
Interest and dividends accrued 7,500
Income tax there on 800
7. What are the Difference between Share and Debentures?
8. Present the profit and Loss and Balance sheet of a bank
with imaginary figures as per the new norms.
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SECTION B — × 15 60 marks)
Answer any FOUR questions.
All questions carry equal marks.
9. Sibi 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. Moorthi Ltd. which had Rs. 50,00,000 10% debentures
outstanding, made following purchase in the open market
for immediate cancellation:
1.4.2007 1,000 debentures of Rs. 100 each at Rs. 99
1.9.2007 2,000 debentures of Rs. 100 each at Rs. 97.
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You are required to give the journal entries for purchase
and cancellation of the debentures.
If the above purchase rates are 'Ex-interest'
If the above purchase rates are 'Cum-interest'.
Assume that interest payable every year on
30th June and 31st December.
11. 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 31.12.2005 of which 2,500 shares were
fully called up. The following are the balances extracted
from the ledger as on 31.12.2005.
Trial balance of Moon and Star Co.Ltd.
Debit Rs. Credit Rs.
Opening 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 31.3.2006) 6,720 Reserves 25,000
Salaries 18,500 Loan from M.D 15,700
Rent 6,000 Share capital
General Expenses 8,950 (2500 Rs. 100) 2,50,000
Printing 2,400
Advisement 3,800
Bonus 10,500
Debtors 38,700
Plant 1,80,500
Furniture 17,100
Bank 34,700
Bad Debts 3,200
Calls in Arrears 5,000
6,60,270 6,60,270
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You are required to prepare profit and loss account for
the year ended 31.12.2005 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 provided.
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, 2005 6%.
12. The following is the Balance Sheet of C Ltd. as on
31-3-2003:
Liabilities Rs. Assets Rs.
Issued and Paid up: Goodwill 20,000
25,000 Pref. Shares of
Rs. 10 each
2,50,000
Leasehold
Premises 1,07,000
25,000 Equity Shares
of Rs. 10 each
2,50,000
Plant and
Machinery 60,000
Current Liabilities: Patents 1,73,900
Sundry Creditors 40,000 Stock 34,000
Bank Overdraft 36,000 Debtors 56,000
Cash 100
Preliminary
Expenses
2,000
Profit and Loss
A/c 1,23,000
5,76,000 5,76,000
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The Company proved unsuccessful and resolutions were
passed to carry out the following scheme of reconstruction
by reduction of capital:
That the Preference Shares be reduced to an equal
number of fully paid shares of Rs. 5 each.
That the Equity Shares be reduced to an equal
number of fully paid shares of Rs. 2.50 each.
That the amount so available be utilised towards
wiping out losses and reduction of assets as follows:
Preliminary Expenses, Goodwill and Profit and Loss
Account to be written off entirely, Rs. 27,000 to be
written off Leasehold Premises, Rs. 14,000 to be
written off stock, Rs. 6,000 to be provided for
doubtful debts, 20% should be written off plant and
Machinery and the balance be written off Patents.
Make journal entries in the books of the company
and prepare the Balance Sheet giving effect to the
above scheme.
13. H Ltd. acquired 80,000 shares of Rs. 10 each in S Ltd. on
1st October, 2001. The summarised Balance Sheets of
H. Ltd. and S Ltd. on 31st March, 2002 were:
Balance Sheets
Liabilities H. Ltd.
Rs.
S. Ltd.
Rs.
Assets H. Ltd.
Rs.
S. Ltd.
Rs.
Share
capital
in shares of
Rs.10 each
20,00,000 10,00,000 Goodwill 1,00,000
Reserves 1,00,000 1,50,000 Machinery
Furniture
5,00,000
20,000
4,50,000
40,000
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Liabilities H. Ltd.
Rs.
S. Ltd.
Rs.
Assets H. Ltd.
Rs.
S. Ltd.
Rs.
Prove and
loss A/c
50,000 45,000 Shares in
S. Ltd. 8,80,000

debentures
2,00,000 Debenture
in S. Ltd. 80,000
Creditors 4,00,000 2,00,000 Stock 5,20,000 6,50,000
Bills
payable
20,000 10,000 Debtors 1,80,000 2,70,000
Bills receivable 10,000 15,000
Cash 2,80,000 1,80,000
25,70,000 16,05,000 25,70,000 16,05,000
Bills Receivable of S. Ltd. include bills for Rs. 8,000
accepted by H. Ltd and creditors of S. Ltd. include
Rs. 20,000 due to H. Ltd. An amount of Rs. 30,000 was
transferred by S. Ltd. from the current year's profits to
reserves.
You are required to prepare the Consolidated Balance
Sheet as on 31st March. 2002 showing therein how your
figures are made up.
14. From the following particulars, prepare the final accounts
of KSRCAS Bank Ltd. for the year ended 31.3.2015.
Particulars Dr. Cr.
Share Capital (1,00,000
shares of Rs.10
each, Rs.5 paid up) 5,00,000
Reserve Fund 10,00,000
Fixed deposits 20,00,000
Savings Bank deposits 30,00,000
Current Accounts 70,00,000
Borrowed from banks 2,00,000
Investments 30,00,000
Premises 12,00,000
Cash in hand 60,000
Cash at Bank 28,00,000
Money at call and short notice 3,00,000
Interest accrued and paid 2,00,000
Salaries 80,000
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Particulars Dr. Cr.
Rent 30,000
P and L A/c (1.4.2014) 1,60,000
Interest earned 4,50,000
Bills discounted 5,00,000
Bills payable 8,00,000
Loans advances, overdraft and
credits
70,00,000
Unclaimed dividends 30,000
Sundry creditors 30,000
Total 1,51,70,000 1,51,70,000
The bank had the bills for Rs. 14,00,000 as collection for
the its constituents and also acceptance and
endorsements for them amounting to Rs. 4,00,000.
15. List out the difference between internal reconstruction
and external reconstructions.