Dibrugarh University - Corporate Accounting 2010


1.                   (a) (i) Give a brief description of ‘Statutory Books’ and ‘Statistical Books’ which are required to be maintained by a company as per provisions of Indian Companies Act, 1956.
(ii) What is ‘Statutory Report’? What items are generally included in this report?
Or
(b) ABC Co. Ltd. issued prospectus inviting applications for 20000 shares of Rs 10 each at a premium of Rs 2 per share as follows :
                On Application – Rs 3
                On Allotment – Rs 5 (including premium)
                On First Call – Rs 2
                On Second Call – Rs 2
Application were received for 30000 shares and allotment made pro-rata to the applicants of 24000 shares. Money overpaid on application was employed on account of sums due on allotment.
Mr. Rajat, to whom 400 shares were allotted failed to pay the allotment money and on his subsequent failure to pay the first call, his shares were forfeited.
Mr. Kamal, the holder of 600 shares failed to pay both the calls and his shares were forfeited after second call.
Of the shares forfeited, 800 shares were issued to Mr. Anand, credited as fully paid for Rs 9 per share, the whole of Mr. Rajat’s shares being included.
Pass the necessary Journal Entries to give effect to the above and prepare Bank A/c, Forfeited Shares A/c and Balance Sheet of the company.

2.                   (a) The XYZ Co. Ltd. was registered with an authorized capital of Rs 10,00,000 divided into shares of Rs 10 each, of which 40000 shares have already been issued and fully paid up. The following is the Trial Balance extracted on 31st March, 2009 :


Dr. Rs
Cr. Rs
Stock on 1.4.2008
1,86,420

Returns
12,680
9,850
Sundry Manufacturing Expenses
19,240

18% Bank Loan (secured)

50,000
Office Salaries and Expenes
17,870

Directors Remuneration
26,250

Freehold premises
1,64,210

Furniture
5,000

Debtors and Creditors
1,05,400
62,220
Cash at Bank
96,860

Profit & Loss A/c on 1.4.2008

38,640
Share Capital

4,00,000
Purchases and Sales
7,18,210
11,69,900
Manufacturing Wages
1,09,740

Carriage Inwards
4,910

Interest on Bank Loan
4,500

Auditor’s Fees
8,600

Preliminary Expenses
6,000

Plant and Machinery
1,28,400

Loose Tools
12,500

Cash in Hand
19,530

Advance Payment of Tax
84,290


17,30,610
17,30,610

You are required to prepare Profit & Loss A/c for the year ended 31st March, 2009 and a Balance Sheet as at that date after taking into consideration the following adjustments:
(i)      On 31st March, 2009, outstanding manufacturing wages and outstanding office salaries stood at Rs 1,890 and Rs 1,200 respectively . On the same date stock was valued at Rs 1,24,840 and loose tools at Rs 10,000
(ii)    Provide for interest on Bank loan for 6 months
(iii)   Depreciation on plant and Machinery is to be provided @ 15% while on office furniture is to be @10%
(iv)  Write off one-third of balance of preliminary expenses
(v)    Make a provision for income tax @50%
(vi)  The directors recommended a maiden (first) dividend @15% for the year ending 31st March, 2009 after the minimum transfer to General Reserve as required by law
(vii) Ignore corporate dividend tax
0R
(b)Explain how the provisions laid under following standards affect the preparation of final accounts of the companies:
(i)    (AS)-5
(ii)   (AS)-12
(iii)  (AS)-15
(iv) (AS)-29

3.                   (a) X Ltd. and Y Ltd. decided to amalgamate and a new company XY Ltd. is formed to take over both the companies as on that 31st March, 2009. The following are the Balance Sheets of the companies as on that date:
Liabilities                                                                                                            X Ltd.                                     Y Ltd.
Share Capital:
Shares of Rs 10 each,fully paid                                                                   5,00,000                               3,00,000
Reserve fund                                                                                                     2,00,000                               1,50,000
Profit & Loss A/c                                                                                               30,000                                   50,000
Dividend Equalisation Fund                                                                         -------                                    1,00,000
Workmens’ Compensation fund                                                                               20,000                                   -------
Bank Overdraft                                                                                                 ------                                      50,000
Sundry Creditors                                                                                              1,00,000                               1,20,000
Bills Payable                                                                                                       50,000                                   30,000
                                                                                                                                9,00,000                               8,00,000
Assets
Goodwill                                                                                                              1,00,000                               80,000
Land& Building                                                                                                  2,50,000                               1,90,000
Plant & Machinery                                                                                           2,00,000                               2,55,000
Patents and Trademark                                                                                 ------                                      52,500
Stock                                                                                                                     2,00,000                               1,50,000
Debtors                                                                                                                                1,00,000                               50,000
Bill Receivable                                                                                                   -------                                    20,000  
Cash at Bank                                                                                                      50,000                                   2,500
                                                                                                                                9,00,000                               8,00,000
Show how the amount payable to each company is arrived at and prepare the amalgamated Balance Sheet of XY Ltd. assuming amalgamation is done in the nature of purchase.
Or
(b) (i) Describe in detail the different types of amalgamation.
      (ii) Discuss in detail the various methods of calculating purchase consideration.

4.                   (a) From the following information, prepare a Profit & Loss A/c of Adarsh Bank Ltd. for the period ended 31st March, 2009 :

Particulars
Rs (in ‘000)
Interest on Loans
5180
Interest on Fixed Deposit
6340
Commission
164
Payment to Employees
1080
Discount on Bills Discounted
2120
Interest on Cash Credit
4460
Rent, Taxes and Lighting Expenses
360
Interest on Overdrafts
3080
Director’s Fees
60
Auditor’s Fees
24
Interest on Savings Bank Deposit
1360
Postage, Telegrams and Telephone Exp.
28
Printing and Stationery
58
Sundry Expenses
34

Additional Information :
(i)      Provide for contingencies Rs 4,00,000
(ii)    Transfer Rs 3,00,000 to Reserves
(iii)   Transfer Rs 4,00,000 to Central Government
Or
(b) (i) Explain the method followed for assessing the profit in the life insurance business.
(ii) Point out the main features of accounts of General Insurance Companies.

5.                   (a) From the Balance Sheet and information given below, prepare Consolidated Balance Sheet of H Ltd. and its subsidiary S Ltd. :

Balance Sheet as on 31st march, 2009
Liabilities
H Ltd. (Rs)
S Ltd. (Rs)
Assets
H Ltd. (Rs)
S Ltd. (Rs)
Share Capital :
Share of Rs 10 each fully paid


5,00,000


1,00,000
Fixed Assets
4,00,000
60,000
Profit & Loss A/c

2,00,000

60,000
Stock
3,00,000
1,20,000
Reserves
60,000
30,000
Debtors
75,000
85,000
Bills Payable

15,000
Bill Receivable
20,000

Creditors
1,10,000
60,000
7500 shares in S Ltd. at cost

75,000


8,70,000
2,65,000

8,70,000
2,65,000

Additional Information :
(i)      The bills accepted by S Ltd. are all in favour of H Ltd.
(ii)    The stock of H Ltd. includes Rs 25,000 bought from S Ltd. at a profit to latter of 20% on sales.
(iii)   All the profit of S Ltd. has been earned since the shares were acquired by H Ltd. but there was already the reserve of Rs 30,000 at that date
Or
(b) (i) Define a holding company. How does it come into existence? Explain briefly.
(ii) How would you ascertain the amount of goodwill or capital reserve while preparing a Consolidated
Balance Sheet?

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