Dibrugarh University Corporate Accounting
Question Papers
Corporate
Accounting Question Paper 2016 (May)
COMMERCE (General/Speciality)
Course: 203 (Corporate Accounting)
The figures in the margin indicate full
marks for the questions
Full Marks: 80
Pass Marks: 32
Time: 3 hours
i.
Out of the face value of shares, at least ____
is payable with application under Section 39 of the Companies Act, 2013.
ii.
Capital Reserve is not used for issue of ____
shares.
iii.
The dividend which is declared in between two
annual general meetings of a company is called ____ dividend.
iv.
Section ____ of the Companies Act, 2013
defines a subsidiary company.
(b) State
the following statements whether ‘True’ or ‘False’: 1x4=4
i.
Shares can be converted into debentures.
ii.
Accounting Standard – 14 relates to Accounting
for Amalgamation.
iii.
Under Income-tax Act, 1961, companies are
required to pay advance income tax on their expected profits.
iv.
If the holding company has 100% shares in a
subsidiary company, then only assets of the subsidiary company belongs to the
holding company.
2. Write
brief notes on any four of the following: 4x4=16
a)
Securities Premium Reserve A/c.
b)
Sinking Fund.
c)
Advance Payment of Tax.
d)
Reduction of share capital.
e)
Consolidated Balance Sheet.
3. (a) A
company invited the public to subscribe for 100000 equity shares of Rs. 10 each
at a premium of Rs. 1 per share payable on allotment. Payments were to be made
as follows:
On
application – Rs. 3 per share.
On
allotment – Rs. 3 per share.
On first
call – Rs. 3 per share.
On final
call – Rs. 2 per share.
Applications
were received for 130000 shares. Applications for 20000 shares were rejected
and allotment was made proportionately to the remaining applicants. Both the
calls were made and all the money received expect the final call on 3000 shares
which were forfeited after due notice. Later on these shares were reissued as
fully paid at Rs. 8.50 per share. Pass Journal Entries in the books of the
company. 14
Or
(b)
Discuss the provisions of law with regard to redemption of redeemable
preference shares as laid down in Section 55 of the Companies Act, 2013. 14
4. (a)
Draw a company Balance Sheet as per Schedule VI of the Companies Act, 2013.
Write a short note on International Financial Reporting Standard – 2, 3 and 5
(IFRS – 2, 3 and 5). 7+7=14
Or
(b)
Following is the Trial Balance of Luit Co. Ltd. as on 31st March,
2016:
|
|
Dr. Balances
Rs.
|
Cr. Balances
Rs.
|
|
Stock, 1st April, 2015
Sales
Purchases
Wages
Discount
Furniture and Fittings
Salaries
Rent
Sundry Expenses
Surplus A/c, 1st April,
2015
Dividend paid
Share Capital
Debtors and Creditors
Plant and Machinery
Cash at Bank
Reserve fund
Patents and Trade Mark
|
75,000
2,45,000
50,000
17,000
7,500
4,950
7,050
9,000
37,500
29,000
16,200
4,830
|
3,50,000
5,000
15,030
1,00,000
17,500
15,500
|
|
|
5,03,030
|
5,03,030
|
Prepare
the Statement of Profit and Loss for the year ended 31st March, 2016
and Balance sheet as on that date. Take into consideration of the following
adjustments: 7+7=14
i.
Stock on 31st March, 2016 was
valued at Rs. 82,000.
ii.
Depreciation on fixed assets @ 10% p.a.
iii.
Make a provision for income tax @ 50% p.a.
iv.
Ignore corporate dividend tax.
5. (a)
What do you mean by amalgamation? What are its features? Discuss ‘pooling of
interest method’ of amalgamation. 2+4+8=14
Or
(b) The
ledger balances of HiFi Ltd. as on 31st March, 2016 are as follows:
|
Cr. Balances
|
Amount (Rs.)
|
Dr. Balances
|
Amount (Rs.)
|
|
Share Capital: Authorized Capital:
50000 Preference shares of Rs. 10 each
50000 Equity shares of Rs. 10 each
Issued and Paid-up:
25000 Preference shares of Rs. 10
each
25000 Equity shares of Rs. 10 each
Current Liabilities:
Sundry Creditors
Bank Overdraft
|
5,00,000
5,00,000
|
Goodwill
Leasehold Premises
Plant and Machinery
Patents
Stock
Debtors
Cash
Surplus A/c (negative balance)
|
60,000
1,07,000
60,000
1,73,900
34,000
56,000
100
1,25,000
|
|
2,50,000
2,50,000
40,000
36,000
|
|||
|
|
5,76,000
|
|
5,76,000
|
The
company proved unsuccessful and resolutions were passed to carry out the
following scheme of reconstruction by reduction of capital:
i. That the Preference Shares be converted to an
equal number of fully paid shares of Rs. 5 each.
ii. That the Equity shares be reduced to an equal
number of fully paid shares of Rs. 2.50 each.
iii. That the amount so available be utilized
towards wiping out losses and reduction of assets as follows: Goodwill and Surplus A/c (negative balance) to
be written off entirely; Rs. 27,000 to be written off from Leasehold Premises,
Rs. 14,000 to be written off from Stock; Rs. 6,000 to be provided for Doubtful
debts, 20% should be written off from Plant and Machinery and the balance be
written off from patents. Make Journal
Entries in the books of the company and prepare Balance Sheet giving effect to
the above scheme.
6. (a)
Following are the Balance Sheets of H Ltd. and its subsidiary company S Ltd. as
on 31st March, 2014:
|
Liabilities
|
H Ltd Rs.
|
S Ltd. Rs.
|
Assets
|
H Ltd. Rs.
|
S Ltd. Rs.
|
|
Share Capital:
Shares of Rs. 10 each fully paid-up
General Reserve
Profit & Loss A/c
Creditors
|
6,00,000
1,50,000
70,000
1,30,000
|
2,00,000
70,000
50,000
1,00,000
|
Machinery
Furniture
Investment: 70% Shares in S Ltd. at cost
Stock
Debtors
Cash at Bank
Preliminary Expenses
|
3,00,000
70,000
2,60,000
1,75,000
95,000
50,000
-
|
1,00,000
45,000
-
1,89,000
70,000
10,000
6,000
|
|
|
9,50,000
|
4,20,000
|
|
9,50,000
|
4,20,000
|
H Ltd.
acquired the shares of S Ltd. as on 30th June, 2013. On 1st
April, 2013, the balance of General Reserve and Profit & Loss A/c of S.
Ltd. stood at Rs. 60,000 and Rs. 20,000 respectively. No part of preliminary
expenses was written off during the year ended on 31st March, 2014. Prepare
the Consolidated Balance Sheet of H. Ltd. and its subsidiary company S Ltd. as
at 31st March, 2014. 14
(b) (i)
State the distinction between Holding Company and Subsidiary Company.
(ii) State
three merits and three demerits of holding company. 8+6=14
(OLD
COURSE)
Full
Marks: 80
Pass
Marks: 32
1. (a) State whether the following
statements are ‘True’ or ‘False’: 1x4=4
i.
A debenture holder is an owner of the company.
ii.
Out of the face value of the shares, at least
20% is payable with application.
iii.
Reduction of share capital is unlawful except
when sanctioned by the court.
iv.
Insolvency is not a necessary condition for
liquidation of a company.
(b) Fill
in the blanks: 1x4=4
i.
Preference shares can be redeemed if they are
____.
ii.
The portion of the authorized capital which
can be called up only on the liquidation of the company is called ____ capital.
iii.
Consolidated Financial Statements are prepared
as per Accounting Standard ____.
iv.
Accounting Standard ____ relates to Accounting
for Amalgamation.
2. Write
short notes on any four of the following: 4x4=16
a)
Preliminary Expenses.
b)
Sinking Fund.
c)
Minority Interest.
d)
Amalgamation in the nature of purchase.
e)
Winding-up of a company.
3. (a)
Give a brief description of the books of accounts and registers which are to be
maintained by a company as per provisions of the Indian Companies Act, 1956. 7+5=12
Or
(b) The
Balance Sheet of J. K. Ltd. as on 31st March, 2016 is given below:
|
Liabilities
|
Amount (Rs.)
|
Assets
|
Amount (Rs.)
|
|
9% Redeemable Preference Shares of
Rs. 100 each fully paid-up
Equity Shares of Rs. 5 each fully
paid-up
General Reserve
Profit & Loss A/c
Sundry Creditors
|
6,50,000
2,25,000
1,00,000
2,60,000
57,500
|
Sundry Assets
Investments
Cash at Bank
|
9,50,000
2,75,000
67,500
|
|
|
12,92,500
|
|
12,92,500
|
The
Preference Shares are to be redeemed on 1st April, 2016 at a premium
of 7 ½ %. In order to facilitate redemption, the company had decided the
following:
a)
To sell the investments for Rs. 2,60,000.
b)
To finance a part of the redemption from the
company’s Reserve Fund.
c)
To issue sufficient equity shares at a premium
of Rs. 1 per share to raise the balance of the fund required.
d)
Minimum bank balance to be retained at Rs.
10,500. The investments were sold, the equity shares were fully subscribed and
the preference shares were dully redeemed.
Show the
Journal Entries and prepare the balance sheet after redemption. 7+5=12
4. (a) (i)
What do you mean by ‘buyback of shares’? State the legal provisions relating to
buyback of shares. 2+3=5
(ii)
Mention any three advantages and three disadvantages of buyback of shares. 3+3=6
Or
(b) XYZ
Co. Ltd. issued 500, 6% debentures of Rs. 100 each on 1st January,
2012, repayable at a premium of 5% at the end of 3 years. In order to ensure
repayment, a sinking fund was created at 5% p.a. at compound interest.
Investment realized Rs. 33,000 on 31st December, 2014 and the
debentures were paid of on that date. Sinking Fund Table shows that Rs.
0.317208 amounts to Rs. 1 in 3 years at 5% compound interest. Pass the necessary
Journal Entries. 11
5. (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 31st March, 2016. The following
are the Balance Sheets of the companies as on that date:
|
Liabilities
|
X Ltd.
Rs.
|
Y Ltd.
Rs.
|
Assets
|
X Ltd.
Rs.
|
Y Ltd.
Rs.
|
|
Share Capita:
Shares of Rs. 10 each fully paid
Reserve fund
Profit & Loss A/c
Dividend Equalization Fund
Workmen Compensation fund
Bank Overdraft
Sundry Creditors
Bills Payable
|
5,00,000
2,00,000
30,000
-
20,000
-
1,00,000
50,000
|
3,00,000
1,50,000
50,000
1,00,000
-
50,000
1,20,000
30,000
|
Goodwill
Land and Buildings
Plant and Machinery
Patents and Trade Mark
Stock
Sundry Debtors
Bills Receivable
Cash at Bank
|
1,00,000
2,50,000
2,00,000
-
2,00,000
1,00,000
-
50,000
|
80,000
1,90,000
2,55,000
52,500
1,50,000
50,000
20,000
2,500
|
|
|
9,00,000
|
8,00,000
|
|
9,00,000
|
8,00,000
|
Show how
the amount payable to each company is arrived at the prepare the amalgamated
Balance Sheet of XY Ltd. assuming amalgamation is done in the nature of
purchase. 5+6=11
Or
(b) (i)
Distinguish between Amalgamation and Absorption. 4
(ii) What
do you mean by internal reconstruction of a company? Explain its scope. 3+4=7
6. (a) (i)
Who are the preferential creditors? 3
(ii) XYZ
Ltd. went into voluntary liquidation on 31st March, 2016. The
position of the company on that date as follows:
|
|
Rs.
|
|
Share Capita: 5000 Equity shares of
Rs. 10 each, Rs. 8 per share called up
Unsecured Creditors:
Preferential
Non-preferential
Secured creditors (secured on Plant
and Machinery)
Cash in hand
|
40,000
5,000
25,000
15,000
1,000
|
Plant and
Machinery finally realized Rs. 10,000 and other assets realized Rs. 10,000. The
liquidation expenses amounted to Rs. 500 and the liquidator was entitled to a
remuneration of 5% on the amount realized excepting cash in hand and 2% on the
amount distributed to unsecured creditors. Prepare the Liquidator’s Final
Statement Account showing the percentage of distribution finally made to
unsecured creditors. 8
Or
(b) What
do you understand by the ‘Liquidator’s Final Statement of Account? Give a
proforma of such an account with imaginary figures. 4+7=11
7 (a) From
the following Balance Sheets of H. Ltd. and its subsidiary company S Ltd. drawn
up on 31st March, 2016, prepare a Consolidated Balance Sheet as on
that date. On the date of acquisition of the shares, the General reserve of S
Ltd. amounted to Rs. 20,000 and the Surplus A/c balance amounted to Rs. 40,000
(Cr.): 11
|
Liabilities
|
H Ltd. (Rs.)
|
S Ltd. (Rs.)
|
Assets
|
H Ltd.(Rs.)
|
S Ltd. (Rs.)
|
|
Share Capita:
Shares of Rs. 10 each fully paid
General Reserve
Surplus A/c
Sundry Creditors
|
10,00,000
1,00,000
1,50,000
1,50,000
|
4,00,000
20,000
60,000
40,000
|
Freehold Property (at cost)
Plant & Machinery (at cost less
depreciation)
Investment:
40000 shares in S Ltd. at cost.
Stock
Sundry Debtors
Bank Balance
|
2,00,000
2,50,000
4,00,000
1,50,000
2,00,000
2,00,000
|
-
1,20,000
-
2,00,000
1,00,000
1,00,000
|
|
|
14,00,000
|
5,20,000
|
|
14,00,000
|
5,20,000
|
Or
(b)
Describe the documents in respect of each subsidiary company to be attached to
the Balance Sheet of the holding company under Section 212 of the Indian
Companies Act, 1956. 11
Corporate Accounting Question Papers and Solutions (Dibrugarh University)
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