Tuesday, August 22, 2017

B.Com 2nd Year Question Papers (Distance): Corporate Accounting' 2015

2015 (July)
COMMERCE
(General)
Paper: 202
(Corporate Accounting)
Full Marks: 90


Time: 3 hours
The figures in the margin indicate full marks for the questions


1. (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. 14
Or
(b) The Balance Sheet of M Ltd. as on 31st March, 2011 is given below:
Liabilities
Rs.
Assets
Rs.
9% Redeemable Pref. 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 2011 at a premium of 7½%. In order to facilitate redemption the company had decided the following:
  1. To sell the investments for Rs. 2,60,000.
  2. To finance a part of the redemption from the company’s fund.
  3. To issue sufficient equity shares at a premium of Rs. 1 per share to raise the balance of the fund required.
  4. 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 duly redeemed.
Show the Journal entries and prepare the Balance Sheet after redemption. 8+6=14
2. (a) Fine Products Ltd. was registered with a nominal capital Rs. 5,00,000 divided into shares of Rs. 100 each. The following Trial Balance is extracted from the books on 31st March, 2010:
Dr. Balances
Rs.
Cr. Balances
Rs.
Building
Machinery
Closing Stock
Purchases (Adjusted)
Salaries
Director’s fees
Rent
Depreciation
Bad debts
Interest accrued on Investment
Investments in shares
Debenture Interest
Loose 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
Salaries (Outstanding)
Provision for Doubtful Debts
Share Capital
General Reserve
Profit & Loss A/c
Creditors
Provision for Depreciation:
Building
Machinery
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

50,000
55,000
2,00,000
14,000
12,000
5,000

12,18,000

12,18,000


You are required to prepare the Profit and Loss A/c for the year ended 31st March, 2010 and the Balance Sheet as on that date after taking into account the following information:
  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 Director’s recommended a dividend of 25%.
  6. Provide Corporate Dividend Tax @ 15%.
  7. Transfer the required amount to General Reserve. 8+6=14
Or
(b) Describe the provisions of AS – 3 with suitable illustration. 14
3. (a) Explain the following: 6+4+6=16
  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) The following are the abridged Balance Sheet of P Ltd. and S Ltd. as on 31st March, 2011:


Liabilities
P. Ltd.
(Rs. in’000)
S. Ltd.
(Rs. in’000)
Equity Share Capital (Rs. 10 each)
10% Preference Share Capital (Rs. 100 each)
General Reserve
Statutory Reserves
Profit and Loss A/c
12% Debentures
Current Liabilities
8,000
-
4,610
390
563
-
1,437
3,000
1,000
980
125
355
250
990

15,000
6,700
Assets
P. Ltd.
(Rs. in’000)
S. Ltd.
(Rs. in’000)
Fixed Assets
Current Assets
11,000
4,000
4,730
1,970

15,000
6,700
On 1st April, 2011 P Ltd. takes over S Ltd. on the following terms:
  1. P Ltd. will issue 3,50,000 Equity Shares of Rs. 10 each at par to the equity shareholders of S Ltd.
  2. P Ltd. will issue 11,000, 10% Preference Shares of Rs. 100 each at par to the preference shareholders of S Ltd.
  3. The debentures of S Ltd. will be converted into an equal number of 12.5% debentures of the same denomination. 8+8=16
You are informed that the Statutory Reserves of S Ltd. are to be maintained for 2 more years. You are required to show that Balance Sheet of P Ltd. immediately after the above mentioned scheme of amalgamation has been implemented assuming that –
  1. The amalgamation is in the nature of merger;
  2. The amalgamation is in the nature of purchase.
4. (a) From the following information relating to Adarsh Bank Ltd., prepare Profit & Loss a/c for the year ended, 31st March, 2011. Give necessary schedules: 14

(Rs. in’ 000)
Interest/Discounts on – Advances/Bills
Income on Investments
Interest on balance with RBI
Commission, Exchange and Brokerage
Profit on sale of investments
Interest on Deposits
Interest on RBI Borrowings
Payment to and Provision for Employees
Rent, Taxes and Lighting
Printing and Stationery
Advertisement and Publicity
Depreciation on Banks’ Property
Directors’ Fees Allowance and Expenses
Auditors’ fees and Expenses
Law Charges
Postage, Telegram, and Telephone etc.
Repair and Maintenance
Insurance
Balance of Profit and Loss A/c b/f
31,628
11,810
4,243
2,907
114
31,404
3,362
9,717
955
213
87
292
7
41
22
312
91
915
1,524


The following adjustments are to be made:
  1. Make a provision for Income Tax (including surcharge) @ 51.75%.
  2. Every year the bank transfers 25% and profit to Statutory Reserve and 5% of profit to Revenue Reserve.
  3. Dividends amounting to Rs. 2,00,000 for the year ended 31st March, 2011 is proposed by the Board of Directors.
Or
(b) From the following particulars, you are required to prepare the Fire Revenue A/c of the United India Insurance Company Ltd. for the year ending 31st March, 2011: 14

Rs.
Claims paid
Claims Outstanding on 1st April, 2010
Claims Intimated and Accepted but not paid
Premium Received
Re-Insurance Premium
Commission on Direct Business
Claims Intimated but not Accepted on 31st March, 2011
Commission:
Re-insurance ceded

Re-insurance accepted
Expenses of Management
Reserve for Unexpired Risk on 1st April, 2010
Additional Reserve for Unexpired Risk on 1st April, 2010
Bonus in Reduction of Premiums
4,20,000
42,000
65,000
10,60,000
1,80,000
2,20,000
8,000

12,000
6,000
2,80,000
3,90,000
40,000
15,000


You are asked by the management to provide for additional reserve for unexpired risk at 1% of the premium in addition to the opening balance.
5. (a) “The holding company and its subsidiaries are considered as a whole economic unit, all the assets and liabilities of various companies being aggregated. The consolidated Balance Sheet must be compiled as if it was the Balance Sheet of an actual company”. Explain and illustrate this statement. 16
Or
(b) The summarized Balance Sheets of A Ltd. and B Ltd. are as follows:
Liabilities
A Ltd.
(Rs.)
B Ltd.
(Rs.)
Assets
A Ltd.
(Rs.)
B Ltd.
(Rs.)
Equity Shares Capital
6% Preference Share
General Reserve
Profit & Loss A/c
Bills Payable
Creditors
Proposed Dividends
6,00,000
-
1,60,000
1,30,000
20,000
2,30,000
60,000
4,00,000
1,00,000
80,000
1,20,000
25,000
2,85,000
40,000
Goodwill
Fixed Assets
Investment
Stock
Debtors
Bills Receivables
Cash
-
3,50,000
3,60,000
2,20,000
2,10,000
40,000
20,000
20,000
2,50,000
90,000
3,60,000
2,50,000
35,000
45,000

12,00,000
10,50,000

12,00,000
10,50,000


A Ltd. Purchased interest in B Ltd. by acquiring its 3/4th equity share capital at a premium of 20% on 1st April, 2010, Prepare a Consolidated Balance Sheet on 31st March, 2011. The following further information is to be taken into account:
  1. Profit and Loss of B Ltd. includes an amount of Rs. 20,000 brought forward from 2009-10.
  2. Creditors of A Ltd. include an amount of Rs. 12,000 for purchase from B Ltd. which are still unsold. B Ltd. sells goods at 20% above cost.
  3. B Ltd. remitted a cheque for Rs. 10,000 on 31st March, 2011 which was received by A Ltd. in the month of April, 2011.
6. Write short notes on (any four): 4x4=16


  1. Redeemable Preference Share.
  2. Payment of dividend out of capital profit.
  3. Determination of purchase consideration.
  4. Forfeiture of share.
  5. Legal Provisions in respect to redemption of preference share.
  6. Minority Interest.

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