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NABADWIP VIDYASAGAR COLLEGE

3
RD
INTERNAL ASSESSMENT
THIRD YEAR B.COM (H)
PAPER V-CORPORATE ACCOUNTING
FULL MARKS: 20, TIME: 45 MINUTES

GROUP A (ANSWER ANY FOUR QUESTIONS) [41=4]
1. In holding company accounts, degree of control depends upon holding of ______________
only
2. Transfer to Capital Redemption Reserve protects the interest of the ______________
3. Section ___________ of the Companies Act 1956 deals with treatment of Securities
Premium Account.
4. In respect of _______________ securities and Debentures, the price quoted is ex-interest
unless otherwise stated.
5. Buy back of shares from the open market may be through stock exchange or _____________
process.
6. Purchased goodwill arises on an _____________
7. Under Double Account System, the Balance Sheet is prepared in ______________ parts.


GROUP B (ANSWER ANY TWO QUESTIONS) [28=16]
8. The summarised Balance Sheets of A Ltd and B Ltd as at 31
st
January 2011 are as under:
Liabilities A Ltd
Rs.
B Ltd
Rs.
Assets A Ltd
Rs.
B Ltd
Rs.
Equity Shares of Rs 15 each
Equity Shares of Rs 10 each
Reserve
Profit and Loss Account
Creditors
120000
-
60000
10000
30000
-
100000
50000
20000
10000
Land and Buildings
Stock
Debtors
Cash at Bank
140000
30000
10000
40000
120000
15000
25000
20000
2200000 180000 2200000 180000

The above two companies agree to amalgamate and form a new company AB Ltd on the following
conditions
a) AB Ltd will take over all the assets and liabilities of A Ltd and B Ltd.
b) The entire purchase consideration will be satisfied by the issue of 28600 equity shares of Rs
10 each of AB Ltd.
c) For the purpose of amalgamation, the value of each equity share is agreed at Rs 25 and Rs
12.50 for A Ltd and B Ltd respectively.
d) The creditors are to be paid off by AB Ltd.
You are required to;
i. Pass journal entries to close the books of AB Ltd
ii. Prepare the Balance Sheet of AB Ltd.
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9. The following is the Balance Sheet of H Ltd as on June 30, 2011.
Liabilities Rs Assets Rs
Share Capital
3000 8% Preference Shares of Rs
10 each
6000 Equity Shares of Rs 10 each
fully paid
Securities Premium
General Reserve
Profit & Loss A/c
Sundry Creditors


30000

60000
29000
40000
24500
19500
Fixed Assets
Investments
Stock-In-Trade
Sundry Debtors
Cash at Bank
100000
21000
44000
16000
22000
203000 203000

The company exercised its option to redeem, on July 1, 2011, the whole of the preference
shares at a premium of 5%. To assist in financing the redemption all the investments were
sold realising Rs 19500. On September 1, 2011 the company made a bonus issue of one
equity share fully paid for every six equity shares held on that date. The appropriate
resolution having been passed, the above transactions were duly completed. You are
required to show the Journal Entries to record the above transactions in the books of the
company.

10. The following particulars of a company are available:
a. Equity Share Capital: 10000 equity shares of Rs 10 each fully paid
b. Preference Share Capital: 1000, 12% Preference Shares of Rs 100 each fully paid
c. Reserve and Surplus: Rs 15000
d. External Liabilities: Creditors Rs 12000; Bill Payable Rs 6000
e. The average normal profit after tax earned each year by the company Rs 28500
f. Transfer to General Reserve 10%
Assets of the company include one fictitious item of Rs 800. The normal rate of return in
respect of the equity share of this type of company is ascertained at 10% (ignore
goodwill).
Compute the value of the Companys share by (a) the asset backing method and (b)
yield method.