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Friday, March 21, 2014

Dibrugarh University - Corporate Accounting (May' 2012)

2012 (May)
Commerce (General/Speciality)
Course: 203
Full Marks: 80
Time: 3 Hours


1.       (a) Chose the correct Answer:
                           i.      A company can issue shares at a discount under Section (77/78/79).
                         ii.      Profit on re-issue of forfeited shares is transferred to (capital reserve/general reserve).
                        iii.      Account for amalgamation is associated with Accounting standard (14/15/16).


(b) Fill in the blanks:
                     i.      Section __ of the Companies Act provides for liquidation of a company.
                   ii.      In case of holding company shares held by outsides are known as __
                  iii.      Reduction of capital is unlawful except when sanctioned by the __.

(c) White true and False;
                     i.      Preference share cannot be redeemed unless they are fully paid up.
                   ii.      Profit made by subsidiary company after the date of acquisition of shares by the holding company are treated as revenue profits.

2. Answer the following:
a)      Distinguish between Bonus shares and Right Shares.
b)      State the SEBI regulations relating to buy-back of share.
c)       Write four points of distinction between Amalgamation in the Nature of purchase.
d)      Explain the steps to be following by a liquidator while preparing a liquidator’s Final Statement.

3.  (a) Explain the provisions of law with regard to redemption of redeemable preference shares as laid down in Sections 80 of the Companies Act, 1956. State the purpose for utilisation of Securities premium sccount.

Or

(b) ABC Ltd issued 1000000 debentures on Jan 1, 2009. These were to be redeemed on 31st Dec,20011. For this purpose, the company established a sinking fund . Investments were expected  to earn 5% interest p.a. Sinking Fund Table show that 0.317208 invested actually at 5% interest amounts to 1 in three years. On 31st dec 2011 the bank blc was 420000 before receipt of interest on sinking fund investments. On that date the investments were sold for 656000. Calculate the interest to the nearest of a rupee assuming investments are made in multiples of Rs. 100. Show the debenture account , Sinking Fund Account and sinking fund investments account in the book of the company.

4.  (a) Following is the balance sheet of P Ltd. As at 31st March, 2011:
Liabilities
Amount
Assets
Amount
Share capital:
Issued and paid up 250000 Equity Share of Rs. 10 each, 8 per share paid up
100000, 10% Pref. share of Rs 10 
Reserve and Surplus:
General Reserve
Profit and Loss Account
Current Liabilities:
Creditors
Workemen’s Profit Sharing Fund 


2000000
1000000

600000
800000

400000
300000
Fixed Assets:
Goodwill
Building
Plant and Machinery
Current Assets:
Stock
Sundry Debtors
Bank Balance
Miscellaneou Exp:
Preliminary Expenses

800000
700000
1300000

700000
900000
660000

40000

5100000

5100000
Q Ltd deciside to absorb the business of P Ltd. At the respective book value of assets and trade liabilities except Building which was valued at Rs. 1200000 and Plant & Machinery at Rs. 1000000. The purchase Consideration was payable as follows:
                     i.            Assumption of trade liabilities at book value.
                   ii.            Payment of liquidation expenses Rs. 5000 and Workmen’s Profit sharing Fund at 10% premium.
                  iii.            Issue of equity share of 10 each fully paid at Rs. 11 per share for every Preference share and every equity share of P Ltd and a payment of 4 per share in cash
Calculate the Purchase consideration and show the Realisation Account Share Accounts in the book of P Ltd. And Opening Journal Entries in the books of Q Ltd.

Or

(b) In what ways can a company alter its share capital? State the procedure is to be follow by a company for reducing share capital. Also explain the cases where procedure of reduction of capital is not called for.

5. (a) Assam Air Product Ltd went into voluntary liquidation on 31 Dec 2011 when their Balance Sheet was as Follows:
Liabilities
Amount
Assets
Amount
Issued and Subscribed Capital:
10000, 10% Cumulative Preference
 Sharesof Rs. 100 each fully Paid
5000 Equity Shares of Rs. 100 each, 75 paid
15000 Equity Shares of Rs. 100 each, 60 paid
15% Debentures secured by a floating charge
Interest outstanding on Debentures
Creditors


1000000
375000
900000
500000
75000
637500
Land and Buildings
Machinery and Plant
Patents
Stock
Sundry Debtors
Cash at Bank
Profit and Loss A/c
500000
1250000
200000
275000
550000
150000
562500

3487500

3487500

Preference dividends were in arrears for 2 years and the Creditors included Preferential Creditors of Rs. 76000. The assets realised as follows:
Land and building  - 600000, Machinery and Plant – 1000000, Patents – 150000, Stock – 300000, Sundry debtors – 400000.
The expenses of liquidation amounted to Rs. 545000. The liquidator is entitled to a commission of 3% on assets realized except cash. Assuming the final payments including those on debentures are made on 31st March 2012, show Liquidator’s Final Statement of Account.

Or

(b)  Write notes on the followings:
                     i.      Preferential creditors
                   ii.      Voluntary winding-up of a company
                  iii.      Order of payment followed by a liquidator for settlement of various claims

6.  (a) Define a holding company. What is minority interest and how is it calculated? Give four examples of transactions which must be eliminated while preparing Consolidated Balance Sheet
Or
(b) Balance Sheet of A Ltd. And its subsidiary B Ltd. On 31st March, 2010 were as under:
Liabilities
A Ltd.
B Ltd
Assets
A Ltd.
B Ltd.
Share Capital:
Equity Share of Rs. 10 each Fully Paid
General Reserve on 1.4.2009
Profit and Loss on 1.4.2009
Profit for the year ended 31.3.2010
Bills payable
Creditors
Bank Overdraft

2000000
300000
400000
500000
150000
300000
200000

500000
100000
200000
250000
---------
300000
--------
Land and Building
Plant and Machinery
Fixture and Furniture
30000 Shares in B Ltd. at Cost
Stock
Debtors
Cash in Hand
Bills Receivable
600000
2000000
90000
650000
400000
100000
100000
--------
--------
--------
100000
--------
750000
280000
20000
200000

3850000
1350000

3850000
1350000

30000 Shares in B Ltd. Were acquired by A Ltd. On 1st October, 2009. Bills Receivable held by B Ltd is a sum of 60000 owing by A ltd in respect of goods supplied by B Ltd. Contingent Liability for bill discounted by B Ltd. Is Rs. 25000. You are required to prepare a Consolidated Balance Sheet of a Ltd. With its subsidiary B Ltd. As at 31st March, 2010.