Wednesday, June 05, 2019

Dibrugarh University B.Com 2nd Sem: Corporate Accounting Question Papers (May'2019)


2019
(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)         Bonus shares can be issued to the _______ members only.
2)         Dividends cannot be declared except out of _______.
3)         Reduction of share capital is unlawful except when sanctioned by the _______.
4)         Section _______ of the Companies Act, 2013 defines a subsidiary company.
(b) State whether the following statements are ‘True’ or ‘False’:                     1x4=4
1)         Profit on re-issue of forfeited shares is transferred to General Reserve.
2)         Preliminary expenses are of capital nature.
3)         Internal reconstruction and reduction in share capital means the same.
4)         Profit & Loss A/c balance including reserves after acquisition is considered as capital profit.
2. Write short notes on (any four):                                              4x4=16
a)         Reserve Capital.
b)         Sinking Fund.
c)          Purchase Consideration.
d)         Interim Dividend.
e)         Cost of Capital.
3. (a) Blue Bird Co. Ltd. issued 50,000 equity shares of Rs. 100 each at a premium of 10% payable as under:
On application
On allotment
On call
Rs. 30
Rs. 60 (including premium)
Rs. 20
Bikram holding 1,500 shares failed to pay call money. The company forfeited his shares and later on 1,000 of these shares reissued to Prakash as fully paid up at Rs. 85 per share.
Give Journal Entries to record the above transactions and show the Balance Sheet of the company.
Or
(b) (1) Discuss the provisions of law with regard to redemption of redeemable preference shares as laid down in Section 55 of the Companies Act, 2013.
(2) Gayetree Tea Ltd. issues 5,000, 8% convertible debentures of Rs. 100 each. Give the Journal Entries relating to issue in each of the following cases:
a)         The debentures are issued at par and redeemable at par.
b)         The debentures are issued at 5% premium and redeemable at 10% premium.
c)          The debentures are issued at 5% discount and redeemable at 5% premium.
4. (a) Explain the treatment of the under mentioned items in the preparation of Final Accounts of a company: 3.5x4=14
1)         Advance Payment of Tax.
2)         Interim Dividend.
3)         Managerial Remuneration.
4)         Provisions and Reserves.
Or
(b) X Ltd. was registered with a nominal capital of Rs. 5,00,000 dividend into shares of Rs. 100 each. The following Trial balance is extracted from the books on 31st March, 2019:
Dr. Balances
Rs.
Cr. Balances
Rs.
Building
Machinery
Closing Stock
Purchases (adjusted)
Salaries
Director’s Fees
Rent
Depreciation
Bad debts
Interest accrued on Investment
Investment in Shares
Debenture Interest
Looses Tools
Advance Tax
Sundry Expenses
Debtors
Cash at Bank
2,90,000
1,00,000
90,000
2,10,000
60,000
10,000
26,000
20,000
6,000
2,000
1,20,000
28,000
23,000
60,000
18,000
1,25,000
30,000
Sales
Outstanding Salaries
Provision for Doubtful Debts
Share Capital
General Reserve
Profit and Loss A/c
Creditors
Provision for Depreciation on:
Building                            50,000
Machinery                       55,000
14% Debentures
Interest on Debentures Outstanding
Interest on Investments
Unclaimed Dividend
5,20,000
2,000
3,000
2,00,000
40,000
25,000
92,000


1,05,000
2,00,000
14,000
12,000
5,000

12,18,000

12,18,000
You are required to prepare the Profit & Loss A/c for the year ended 31st March, 2019 and the Balance Sheet as on that date after taking into account the following information:          8+6=14
1)         Closing Stock is more than Opening Stock by Rs. 30,000.
2)         Provide for Bad and Doubtful Debts @ 4% on Debtors.
3)         Make a provision for income tax @ 50%.
4)         Depreciation includes depreciation of Rs. 8,000 on Building and that of Rs. 12,000 on Machinery.
5)         The directors recommended a dividend of 25%.
6)         Ignore Corporate Dividend Tax.
5. (a) A Ltd. acquired the undertaking of B Ltd. on 31st March, 2019 for a purchase consideration of Rs. 2,50,00,000 to be paid by fully paid equity shares of Rs. 10 each. Equity & Liabilities and Assets of the two companies on the date of acquisition were as follows:

A Ltd.
(Rs.)
B Ltd.
(Rs.)
        I.            Equity and Liabilities:
1.       Shareholders’ Fund:
Share Capital:
Equity Shares of Rs. 10 each fully paid up
2.       Reserves & Surplus:
General Reserve
Surplus
Development Rebate Reserve
Workers’ Compensation Fund
3.       Current Liabilities



2,50,00,000

1,20,00,000
10,00,000
10,00,000
15,00,000
45,00,000



1,50,00,000

18,00,000
53,00,000
37,00,000
24,00,000
95,00,000

4,50,00,000
3,77,00,000
      II.            Assets:
1.       Fixed Assets:
Land and Buildings
Plant and Machinery
Furniture and Fixtures
2.       Current Assets:
Stock
Debtors
Bank Balance


1,20,00,000
2,00,00,000
10,00,000

55,00,000
45,00,000
20,00,000


80,00,000
1,80,00,000
20,00,000

40,00,000
40,00,000
17,00,000

4,50,00,000
3,77,00,000
Pass the necessary Journal Entries in the books of A Ltd. when amalgamation is in the nature of merger. Also prepare the Balance Sheet of A Ltd. after amalgamation, assuming that Development Rebate Reserve and Workers’ Compensation Fund of B Ltd. are required to be continued in the books of A Ltd.                              8+6=14
(b) Explain the various provisions of alteration of share capital as given in the Companies Act, 2013 with examples.       14
6. (a) (1) Give a legal definition of a holding company and a subsidiary company.          2+2=4
(2) What is ‘Minority Interest’? How is it calculated?             2+2=4
(3) Mention any three advantages and three disadvantages of a holding company.     3+3=6
Or
(b) On 31st March, 2019, the Equity & Liabilities and Assets of H Ltd. and its subsidiary company S Ltd. stood as follows:

A Ltd.
(Rs.)
B Ltd.
(Rs.)
        I.            Equity and Liabilities:
1.       Share Capital:
Equity Shares of Rs. 10 each fully paid up
2.       Reserves & Surplus:
General Reserve
Profit & Loss A/c 
3.       Current Liabilities
Sundry Creditors


8,00,000

1,50,000
90,000

1,20,000


2,00,000

70,000
55,000

80,000

11,60,000
4,05,000
      II.            Assets:
1.       Fixed Assets:
2.       Investment:
75% Equity Shares in S Ltd. (at cost)
3.       Current Assets:
Stock
Other Current Assets 

5,50,000

2,80,000

1,05,000
2,25,000

1,00,000

-

1,77,000
1,28,000

11,60,000
4,05,000
Draw the Consolidated Balance Sheet as on 31st March, 2019 after taking into consideration the following information also:                                                              14
1)         H Ltd. acquired the shares on 31st July, 2018.
2)         S Ltd. earned a profit of Rs. 45,000 for the year ended 31st March, 2019.
3)         In January 2019, S Ltd. sold to H Ltd. goods costing Rs. 15,000 for Rs. 20,000. On 31st March, 2019 half of these goods were lying unsold in the godown of H Ltd.
(OLD COURSE)
Full Marks: 80
Pass Marks: 32
Time: 3 hours
1. (a) Fill in the blanks:                                                           1x4=4
1)         A shareholder is not the _______ of the company.
2)         A company can _______ its own shares.
3)         The portion of the authorized capital which can be called up only on the liquidation of the company is called _______ capital.
4)         A holding company is one that holds _______ of the share capital of another company.
(b) State whether the following statements are ‘True’ or ‘False’:             1x4=4
1)         Profit on re-issue of forfeited shares is transferred to General Reserve.
2)         A debenture holder is the owner of the company.
3)         Internal reconstruction and reduction in share capital means the same.
4)         Consolidated Financial Statements are prepared as per Accounting Standard – 21.
2. Write short notes on (any four):                             4x4=16
a)         Bonus Share.
b)         Buyback of Shares.
c)          Purchase Consideration.
d)         Voluntary Winding-up.
e)         Consolidated Balance Sheet.
3. (a) A company invited the public to subscribe for 1,00,000 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
On allotment
On first call
On final call
Rs. 3 per share
Rs. 3 per share
Rs. 3 per share
Rs. 2 per share
Applications were received for 1,20,000 shares. Applications for 20,000 shares were rejected and money refunded. All the money were received except the first and final calls on 5,000 shares. The 5,000 shares were forfeited after due notice. Later on all these shares were re-issued as fully paid up at Rs. 8.50 per share.
Pass Journal Entries in the books of the company.                     12
Or
(b) What are the circumstances that warrant the issue of bonus shares? State the SEBI guidelines for issue of bonus shares.                       6+6=12
4. (a) Define debenture. Which is the best method of redemption of debenture? Justify your opinion.                  4+7=11
Or
(b) Equity & Liabilities and Assets of X Ltd. as on 31st March, 2019 are given below:

 (Rs.)
        I.            Equity and Liabilities:
1.       Share Capital:
20,00,000 Equity Shares of Rs. 10 each fully paid
Reserves & Surplus:
Security Premium
General Reserve
Secured Loan:
14% Redeemable Debentures
Current Liabilities


2,00,00,000

20,00,000
1,80,00,000

1,00,00,000
1,00,00,000

6,00,00,000
      II.            Assets:
Fixed Assets:
Freehold Property
Current Assets:
Stock-in-trade
Sundry Debtors
Bank Balance


2,00,00,000

1,20,00,000
1,00,00,000
1,80,00,000

6,00,00,000
It was resolved in the meeting of shareholders:
1)         To buyback 20% of Equity Shares @ Rs. 12 per share.
2)         To utilize General Reserve for buyback of shares.
3)         To utilize security premium for premium on buyback of shares.
4)         To immediately cancel the shares bought back.
Pass Journal entries and draw up the Balance Sheet after the above transactions have been given effect to.       6+5=11
5. (a) Explain the following:                                                       4+4+3=11
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 amalgamation in the nature of purchase.
Or
(b) Pass Journal Entries for the following transactions:             3+3+3+2=11
1)         Conversion of 2,00,000 fully paid equity shares of Rs. 10 each into stock of Rs. 1,00,000 and balance has 12% fully convertible debentures.
2)         Conversion of 40,00,000 fully paid equity shares of Rs. 2.50 each into 10,00,000 fully paid equity shares of Rs. 10 each.
3)         Subdivision of 10,00,000 fully paid 11% preference shares of Rs. 50 each into 50,00,000 fully paid 11% preference shares of Rs. 10 each.
4)         Conversion of 12% preference shares of Rs. 5,00,000 into 14% preference shares of Rs. 3,00,000 and remaining balance as 12% non-cumulative preference shares.
6. (a) What do you mean by ‘liquidation’? Discuss the various modes of liquidation of a Joint-Stock Company in detail. 3+8=11
Or
(b) The following particulars relate to a limited company which has gone into voluntary liquidation. You are required to prepare the Liquidator’s Final Statement of A/c, allowing for his remuneration @ 2% on the amount realized and @ 2% on the amount distributed to unsecured creditors other than preferential creditors:                                                11

Rs.
Preferential Creditors
Unsecured Creditors
Debentures
10,000
32,000
10,000
The assets realized the following sums:

Rs.
Land and Building
Plant and Machinery
Fixtures and Fittings
The amount paid for liquidation expenses
20,000
18,650
1,000
1,000

7. (a) Describe the documents in respect of each subsidiary company to be attached in the Balance Sheet of the holding company under the Companies Act, 2013.  11
Or
(b) From the Balance Sheets of H Ltd. and its subsidiary company S Ltd. drawn up on 31st March, 2019, prepare Consolidated Balance Sheet as on that date. On the date of acquisition of the shares, the General Reserve of S Ltd. amounting to Rs. 20,000 and the Surplus A/c balance amounted to Rs. 40,000 (Cr.):                                                          11

H Ltd.
(Rs.)
S Ltd.
(Rs.)
        I.            Equity and Liabilities:
1.       Shareholders’ Fund:
Share Capital:
Shares of Rs. 10 each fully paid up
2.       Reserves & Surplus:
General Reserve
Surplus
3.       Current Liabilities:
Sundry Creditors



10,00,000

1,00,000
1,50,000

1,50,000



4,00,000

20,000
60,000

40,000

14,00,000
5,20,000
      II.            Assets:
1.       Non-Current  Assets:
a)      Fixed Assets:
Freehold Property (at cost)
Plant and Machinery (at cost less depreciation)
b)      Investments:
40,000 shares in S Ltd. (at cost)
2.       Current Assets:
Stock-in-trade
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


***


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