Monday, May 20, 2019

Gauhati University Question Papers: Corporate Accounting (Nov-Dec’ 2016)


2016
CORPORATE ACCOUNTING
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. Answer as directed:                                                                                 1x10=10

a)         Capital profits are not earned during the normal course of the business. (State whether the statement is true or false)
b)         Premium on issue of shares can be used for (Choose the correct option)
1)         Issue of bonus share.
2)         Distribution of profits.
3)         Transferring to general reserve.
4)         Issue of preference shares.
c)          _______ is an account in which a specified percentage of total consideration payable for buy-back is deposited. (Fill in the blank)
d)         Right shares are those shares which are: (Choose the correct option)
1)         First offered to the creditors of the company.
2)         First offered to the existing shareholders of the company.
3)         First offered to the employees of the company.
4)         Issued by a newly formed company.
e)         AS-14 deals in – (Choose the correct option)
1)         Presentation of financial statements.
2)         Buy-back of shares.
3)         Issue of debentures.
4)         Amalgamation of companies.
f)          Purchase of own debentures from the open market must be authorized by the: (Choose the correct option)
1)         Articles of Association.
2)         Memorandum of Association.
3)         Board of Directors Meeting.
4)         Annual General Meeting.
g)         At the time of repayment of capital, preference is given to: (Choose the correct option)
1)         Equity shareholders.
2)         Preference shareholders.
3)         Debenture holders.
4)         Trade creditors.
h)         Transferor Company is the company which is amalgamated into another company. (State true or false)
i)           State the meaning of cum-interest quotation.
j)           In case of amalgamation of companies, accumulated losses in the books of vendor company should be transferred to: (Choose the correct option)
1)         Shareholders account.
2)         Both shareholders account and debenture holders’ account.
3)         General reserve Account.
4)         Both (1) and (3)
2. Answer the following questions within 15-20 words each:                         2x5=10
a)         State the meaning of ‘Trade Payables’ in preparing the final accounts of a company.
b)         Name any two types of companies which are exempted from preparing final accounts as per Companies Act, 2013.
c)          What is meant by Share Appreciation Rights?
d)         Pass the journal entry for issue of debenture at par and redeemable at discount with imaginary figures.
e)         What are the different types of amalgamation from accounting point of view?
3. Answer any four of the following questions in about 50 words each:                   5x4=20
a)         Differentiate between bonus shares and right shares.
b)         What are the duties of a company after buy back of its shares?
c)          Show the accounting treatment for issue of debentures as collateral security with imaginary figures.
d)         Determine the amount of purchase consideration for amalgamation and also show how it is discharged by Sima Ltd. from the following information:
Riya Ltd. is taken over by Sima Ltd. with the condition that Rs. 1,90,000 be paid in cash to the shareholders of Riya Ltd. and the balance of purchase consideration by issue of shares of Rs. 10 each at Rs. 20 per share. The assets and liabilities of Riya Ltd. is valued at Rs. 15,00,000 and Rs. 11,00,000 respectively.
e)         On 1.4.2016, 10,000, 10% debentures of Rs. 100 each are issued at a premium of 10% repayable after 5 years at a premium of 10%. Pass journal entry on the date of issue in the books of the company.
f)          The following is the extract of Trial Balance of Alin Ltd. as on 31.3.2016:

Rs.
Sales
Opening stock
Selling expenses
Director’s remuneration
Furniture
Cash in hand
Purchases
Salaries and wages
Audit fees
Trade debtors
Interest on bank overdraft
Discount on issue of debentures
Dividend received
Bad debts
Depreciation
6,70,000
1,45,000
79,000
10,000
10,000
15,000
4,90,000
42,000
8,000
7,000
14,000
2,000
16,000
800
3,500
Prepare a Statement of Profit and Loss after considering the following:
1)         Closing stock was valued at Rs. 1,40,000 (Market price Rs. 1,42,000)
2)         Purchases include Rs. 5,000 worth of goods distributed free among valued customers.
4. Answer the following questions:                                                                10x4=40
(a) From the following balances of Jairampur Ltd. as on 31st March, 2016, prepare a Balance Sheet as per Companies Act, 2013:

Rs.
Term Loan
Trade Creditors
Cash balance
Loose tools
Investments
Provision for taxation
Securities Premium
Loans from debtors
General Reserve
Debtors
Equity share capital
Stores
Fixed assets
Finished goods
Capital work-in-progress
Preference share capital
Debentures
10,00,000
11,45,000
2,75,000
50,000
5,25,200
1,70,000
4,75,000
2,00,000
20,50,000
12,04,800
13,73,000
4,00,000
41,50,000
7,50,000
2,58,000
3,00,000
9,00,000

(b) Discuss the procedure of issuing right shares by a company.
Or
Naina Ltd. decided to make a right issue in the proportion of one new share of Rs. 200 each at premium of Rs. 50 each to the shareholders for every three existing shares. The market value of the shares at the time of announcement of right issue is Rs. 500 each. Calculate the value of right and ex-right value of share.
(c) Discuss the provisions of AS-14 relating to accounting treatment of amalgamation in the books of the transferee company.
Or
Pradip Ltd. and Bikash Ltd. were amalgamated and from April, 2016, a new company Prakash Ltd. was formed to take over the business of existing companies. The assets and liabilities of Pradip Ltd. and Bikash Ltd. as on 31st March, 2016 are given below:
Liabilities
Pradip Ltd.
Amount
Bikash Ltd.
Amount
Share Capital:
Equity shares of Rs. 10 each
12% preference shares Rs. 100 each
Reserves and Surplus:
Capital reserve
General reserve
Profit and Loss A/c
Secured loans
Creditors
Tax provision

2,400
1,200

800
1,200
400
1,600
1,200
800

1,600
800

600
600
200
800
400
200

9,600
5,200
Assets:
Fixed Assets
Less: Depreciation

4,800
800

3,200
600

4,000
2,600
Investments
Current Assets:
Stock 1,200
Debtors
Cash and bank balance
1,600

600
1,600
1,200
600


800
600

9,600
5,200
Additional information:
1)         Preference shareholders of the two companies are issued equivalent number of 15% preference shares of Prakash Ltd. at an issue price of Rs. 125 per share.
2)         Prakash Ltd. will issue one equity share of Rs. 10 each for every share of Pradip Ltd. and Bikash Ltd. The shares are issued at a premium of Rs. 5 per share. Prepare the Balance Sheet of Prakash Ltd. on the assumption that the amalgamation is in the nature of merger.
(d) Explain the methods of redemption of debentures.                                         10
Or
1)         Write a note on the sources of finance for redemption of debentures.
2)         On 1.4.2014 Harshita Ltd. issued 8,000 10% debentures of Rs. 100 each at a discount of 5% with the condition that these will be redeemed at a premium of 10% on 31.3.2016 wholly out of profits. Pass necessary journal entries for the issue and redemption of these debentures.                                                       5

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