Saturday, March 30, 2019

Dibrugarh University Question Paper: Corporate Accounting (May' 2018)


2018 (May)
COMMERCE (General/Speciality)
Course: 203 (Corporate Accounting )
The figures in the margin indicate full marks for the questions
 (NEW COURSE)
Full Marks: 80
Pass Marks: 24
Time: 3 hours
1. (a) Fill in the blanks:                   1x4=4

1)            Assets of the company cannot be mortgaged in favour of _____.
2)            Companies have a statutory obligation to prepare Final Accounts as required by Section _____ of the Companies Act, 2013.
3)            Accounting Standard _____ relates to accounting for amalgamation.
4)            A wholly owned subsidiary company is one in which all the shares with voting rights of ____ are owned by the holding company.
(b) State the following statements whether True or False:                    1x4=4
1)            Redeemable preference shares can be redeemed although they are partly paid-up.
2)            Under the Income-tax Act, 1961, companies are required to pay advance tax on their expected profits.
3)            Any reduction of capital reduces the security of the creditors.
4)            Section 2(67) of the Companies Act, 2013 defines a subsidiary company.
2. Write short notes on (any four):                   4x4=16
a)            Reserve Capital.
b)            Debentures Trust Deed.
c)             Interim Dividend.
d)            Internal Reconstruction.
e)            Capital Profits.
3. (a) Discuss the provisions of law with regard to redemption of redeemable preference shares as laid down in Section 55 of the companies Act, 2013. Give its accounting treatments.     8+6=14
Or
(b) X Co. Ltd. Issued 500, 6% Debentures of Rs. 100 each on 1st April, 2014. Repayable at a premium of 5% at the end of 3 years. In order to ensure repayment, a sinking fund was created at 5% per annum compound interest. Investment realized Rs. 33,000 on 31st March, 2017 and the debentures were paid-off 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 in the books of the company.  14
4. (a) Explain the illustrate how the following items are to be shown in the Balance Sheet of a company to comply with the requirements of the Companies Act, 2013:    3 ½ x4=14
Or
(b) Following are the Ledger balances of ABC Ltd. As on 31st March, 2018:
Debit balances
Rs.
Credit balances
Rs.
Premises
Plant
Stock (1st April, 2017)
Debtors
Goodwill
Cash at Bank
Calls-in-Arrear
Interim Dividend Paid
Purchases
Wages
General Expenses
Salaries
Bad Debts
Debenture Interest paid
Preliminary Expenses
30,72,000
33,00,000
7,50,000
8,70,000
2,50,000
4,51,600
75,000
3,92,500
18,50,000
9,79,800
53,350
2,02,250
21,000
1,80,000
20,000
Share Capital
12% Debentures
Surplus Account
Bills Payable
Creditors
Sales
General Reserve
Bad Debt Provision (1st April, 2017)
40,00,000
30,00,000
2,62,500
3,70,000
4,00,000
41,50,000
2,50,000
35,000

1,24,67,500

1,24,67,500
Additional Information:
1)            Stock on 31st March, 2018 was Rs. 9,50,000.
2)            Depreciate plant by 15%.
3)            Write-off Rs. 5,000 from preliminary expenses.
4)            Interest on debenture is due for 6 months.
5)            Create 5% provision for doubtful debts.
6)            Provide for income tax # 50%.
Prepare Final Accounts of the company for the above period.         8+6=14
5. (a) Explain the following:        4+4+6=14
1)            Amalgamation in the nature of merger.
2)            Amalgamation in the nature of purchase.
3)            Treatment of reserves on amalgamation in the nature of merger and in the nature of purchase.
Or
(b) Following are the Ledger balances of XYZ Co. Ltd. As on 31st March, 2018:
Debit balances
Rs.
Credit balances
Rs.
Share Capital:
10000 Equity shares of Rs. 10 each fully paid
500, 9% Preference Shares of Rs. 100 each fully paid
Sundry Creditors


1,00,000

50,000
25,000
Land and Building
Plant and Machinery
Stock-in-trade
Sundry Debtors
Cash at Bank
Profit and Loss Account (Dr.)
60,000
25,000
25,000
14,500
500
50,000

1,75,000

1,75,000
Due to heavy losses, the following scheme of reconstruction is agreed by the company:
1)            To reduce the value of each equity share to Rs. 4
2)            To convert existing preference shares into 400, 12% Preference Shares of Rs. 100 each.
3)            To write down the value of stock by Rs. 5,000.
4)            After writing-off the debit balance of Profit and Loss Account, any balance left was to be used in raising a reserve against sundry debtors.
Give necessary Journal Entries in the books of the company to record the above adjustments and prepare the Revised Balance Sheet after reduction.    8+6=14
6. (a) What do you mean by Consolidated Financial Statements? What are the objectives and scope of these statements? Also point out the advantages and disadvantages of consolidation.                          2+2+3+4+3=14
Or
(b) The following are the Ledger balances of H Ltd. And its subsidiary company S Ltd. As on 31st March, 2018:
Credit Balances
H Ltd.
Rs.
S Ltd.
Rs.
Debit Balances
H Ltd.
Rs.
S Ltd.
Rs.
Share Capital:
(Shares of Rs. 10 each)
General Reserve
Profit and Loss A/c
Creditors

6,00,000
1,50,000
70,000
90,000

2,00,000
70,000
70,000
40,000
Machinery
Furniture
Investment:
70% Shares of S Ltd. (cost)
Stock
Debtors
Cash at Bank
Preliminary Expenses
3,00,000
70,000

2,60,000
1,75,000
55,000
50,000
-
1,00,000
45,000

-
1,89,000
30,000
10,000
6,000

9,10,000
3,80,000

9,10,000
3,80,000
H Ltd. Acquired the shares of S Ltd. On 30th June, 2017. On 1st April, 2017 S Ltd. ‘s General Reserve and Profit & Loss Account balance stood at Rs. 60,000 and Rs. 20,000 respectively. No part of preliminary expenses was written-off during the year ended 31st March, 2018. Prepare a Consolidated Balance Sheet of H Ltd. And its subsidiary company S Ltd. As on 31st March, 2018.     14
(OLD COURSE)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
1. (a) Fill in the blanks:                  1x4=4
1)            Public Ltd. Companies cannot issue _____ shares.
2)            Debentures holders are the _____ of the company.
3)            Reduction of share capital is unlawful except when sanctioned by the _____.
4)            Liquidation is a _____ procedure by which the corporate life of a company is brought to an end.
(b) State whether the following statements are True or False:   1x4=4
1)            Preference shares can be redeemed if they are fully paid-up.
2)            Interest on Sinking Fund Investment Account is credited to Profit and Loss Account.
3)            For amalgamation, two or more companies are required to amalgamate themselves.
4)            A holding company is one that holds the whole of the share capital of another company.
2. Write short notes on (any four):                                                                                                           4x4=16
a)            Preliminary Expenses.
b)            Redeemable Debenture.
c)             Compulsory Winding-up.
d)            Cost of Control.
e)            Purchase Consideration.
3. (a) Following are the Ledger balances of X Ltd. As on 31st March, 2018:
Ledger balances as on 31st March, 2018
Credit balances
Rs.
Debit balances
Rs.
Share Capital:
10000 Equity Shares of Rs. 100 each fully paid
4000, 6% Redeemable Preference Shares of Rs. 100
 each fully paid
Profit and Loss A/c
General Reserve
Securities Premium
Creditors

10,00,000

4,00,000
20,000
4,40,000
20,000
1,00,000
Sundry Assets
Bank Balance
12,20,000
7,60,000

19,80,000

19,80,000
On the above mentioned date, the company redeemed the preference shares at a premium of 5%.
Show the Journal Entries and Prepare the Amended Balance Sheet.        8+4=12
Or
(b) Give a brief description of the books of accounts and registers which are to be maintained by a company as per the Companies Act, 2013.                       7+5=12
4. (a) (1) What do you mean by ‘buy-back of shares’? State the legal provisions relating to buy-back of shares.   2+3=5
Or
(2) Distinguish between debentures and shares.                                                    6
(b) On 1st April, 2017, the following balances appeared in the books of J. K. Company Ltd.:

Rs.
12% Debentures
Sinking Fund
Sinking Fund Investment
20,00,000
16,00,000
16,00,000
The investment consisted of 8% Government Securities of the face value of Rs. 17,00,000. The annual investment to sinking fund was Rs. 2,64,000. The bank balance on 31st March, 2018 was Rs. 5,60,000 (after receipt of interest on sinking fund investment). Investments realized 93% and debentures were redeemed.
Show all necessary Ledger Accounts.                                                                      11
5. (a) Explain the various provisions of alteration and capital reduction of share capital as given in the Companies Act, 1956 with examples.                                                                 11
Or
(b) A Ltd. And B Ltd. Decided to amalgamate and a new company named AB Ltd. Is formed to take over both the companies as on 31st March, 2018. The following are the Ledger balances of the companies as on that date:
Credit Balances
A Ltd.
Rs.
B Ltd.
Rs.
Debit Balances
A Ltd.
Rs.
B Ltd.
Rs.
Share Capital:
(Shares of Rs. 10 each Fully paid-up)
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
-
90,000
50,000


3,00,000
1,50,000
50,000
1,00,000
-
50,000
1,10,000
30,000
Goodwill
Land and Buildings
Plant and Machinery
Patents and Trade Mark
Stock
Sundry Debtors
Bills Receivables
Cast at Bank
1,00,000
2,50,000
2,00,000
-
2,00,000
90,000
-
50,000
80,000
1,90,000
2,55,000
52,500
1,50,000
40,000
20,000
2,500

8,90,000
7,90,000

8,90,000
7,90,000
Pass Journal Entries and prepare the Balance Sheet of AB Ltd. Assuming that amalgamation is done in the nature of purchase.                                                            6+5=11
6. (a) What do you mean by preferential creditors? State the rank of preferences to be followed by the liquidator while preparing the final statement of accounts.                                                           3+8=11
Or
(b) ABC Ltd. Went into voluntary liquidation on 31st March, 2018. The position of the company on that date was as follows:

Rs.
Share Capital:
5000 Equity Shares of Rs. 10 each Rs. 8 per share called-up
Unsecured Creditors:
Preferential                                                                 5,000
Non-Preferential                                                      25,000
Secured Creditors
(Secured on Plant & Machinery)
Cash in Hand

40,000


30,000

15,000
1,000
Plant & 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 the unsecured creditors. Prepare the Liquidator’s Final Statement of Account showing the percentage of distribution finally made to unsecured creditors.                                                 11
7. (a) (1) Distinguish between Holding company and Subsidiary company.           5
(2) Mention three advantages and three disadvantages of holding company.    3+3=6
Or
(b) H Ltd. Acquired 4000 shares of S Ltd. As on 1st April, 2017. Their ledger balances as on 31st March, 2018 stood as follows:
Ledger balances
As on 31st March, 2018
Credit Balances
H Ltd.
Rs.
S Ltd.
Rs.
Debit Balances
H Ltd.
Rs.
S Ltd.
Rs.
Share Capital:
(10000 Equity Shares of Rs. 10 each fully paid
5000 Equity shares of Rs. 10 each fully paid
Profit and Loss A/c
Creditors


1,00,000

-
40,000
40,000


-

50,000
10,000
20,000
Fixed Assets
Investment:
4000 Equity Shares of S Ltd. At Rs. 12.50 each.
Current Assets 
1,00,000


50,000
30,000
60,000


-
20,000

1,80,000
80,000

1,80,000
80,000
On 1st April, 2017, the Profit and Loss A/c on S Ltd. Showed a loss of Rs. 15,000 which was written off out of profit earned in 2017-18. Prepare a Consolidated Balance Sheet as on 31st March, 2018. Show your working notes clearly. 11
***

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