1

CORPORATE ACCONTING
B.Com IInd Year
Time: 3hrs
Marks: 75
UNIT 1
a. What do you mean by forfeiture of shares? In what circumstances can a company forfeits its shares? Can
forfeited shares be re-issued? If yes, at what price?
b. Sangita Limited invited application for issuing 60,000 shares of Rs. 10 each at par. The amount was payable as
follows :
On Application Rs. 2 per share
On Allotment Rs. 3 per share
On First and Final Call Rs. 5 per share
Applications were received for 92,000 shares. Allotment was made on the following basis :
(i) To applicants for 40,000 shares - Full
(ii) To applicants for 50,000 shares - 40%
(iii) To applicants for 2,000 Shares - Nil
Rs. 1,08,000 was realised on account of allotment (excluding the amount carried from application money) and
Rs. 2,50,000 on account of call.
The directors decided to forfeit shares of those applicants to whom full allotment was made and on which
allotment money was overdue.
Pass journal entries in the books of Sangita Limited to record the above transactions.
OR
a. What do you understand by redemption of debentures? Describe methods of redemption of debentures.
b. Pass the necessary Journal entries in the books of B Ltd. In the following cases
(a) 2,000, 7% Debentures of Rs. 100 each have been issued at par and are redeemable at par.
(b) 2,000, 7% Debentures of Rs. 100 each are issued at par and are redeemable at 4% premium.
(c) 2,000, 7% debentures of Rs. 100 each has been issued at 5% discount and are redeemable at par.
(d) 2,000, 7% Debentures of Rs.100 each are issued at 5% discount and are redeemable at 2 % premium.
(e) 2, 000, 7% debentures of Rs.100 each are issued at 4% premium and are repayable at par.
UNIT II

a. What are the rules regarding the preparation and presentation of the final accounts of a company
under the companies Act 2013? Explain.
b. Order of compulsory winding-up was given on 31st December, 2008 of a company. Following information is
available.
Est. realizable value
Cash in hand
100
100
Debtors
4,000
3,600
Buildings
60,000
48,000
Furniture
20,000
20,000
Unsecured Creditors
20,000
Debentures secured on Building
42,000
Debentures having a floating charge
10,000
Preferential Creditors
6,000
Shares capital(3,200 shares of Rs.100 each)
3,20,000
Total liabilities on bills discounted is Rs.6,000; estimated liabilities Rs. 6,000; other contingent liability Rs.
12,000, estimated liabilities Rs. 12,000 .Prepare statement of Affairs and Account.
OR
a. What do you understand by liquidation of a company? Describe the different modes of winding up of a
company. Give format of Liquidators final statement of Accounts.

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b. The following Trial Balance has been extracted from the books of Farida Ltd. as on 31st March,2014:
Name of Accounts
L.F. Dr. Balance
Cr. Balance
3,000 Equity Shares of Rs. 100 each
3,00,000
10% Debentures
45,000
Opening stock
1,00,000
Premises
1,10,000
Purschases and sales
2,00,000
3,55,000
Wages
74,000
Manager's Salary
9,000
Rent,Taxes and Insurance
13,800
Interest on debentures
1,800
Rent Received
3,400
Transfer Fees
120
Goodwill
40,000
Discount and Commission
19,000
Carriage Inwards
8,000
Bad Debts
1,000
General Expenses
11,700
Repairs
3,000
Provision for Bad Debts
3,000
Debtors and Creditors
1,24,000
39,200
Plant and Machinery
1,18,000
Cash in hand and at bank
12,400
Sales and Purchases Returns
100
80
Works Expansion Reserve
1,00,000
Total
8,45,800
8,45,800
You are required to prepare the companys statement of Profit and Loss for the year ending 31st March,2013
and a Balance Sheet as on that date after taking the following adjustments into consideration : (i)Closing
Stock Rs. 1,25,000: (ii) Unexpired Insurance Rs. 1,500; (iii) Depreciate plant and machinery at 25%: (iv)
Provision for Bad and Doubtful Debts on sundry debtors at 5%; (v) Rent due but not received Rs.400;(vi)
wages to the extent of Rs. 24,000 were productive.
UNIT III
a. What do you understand by valuation of shares? Discuss and illustrate the different methods of valuation of
shares.
b. The following information relates to the business of a partnership firm
a. Average capital employed in the business Rs. 720000
b. Net trading profits of the firm for the past three years (after taxation) were Rs. 107600, Rs 90700 and
Rs. 112500.
c. Reasonable return expected in the same type of business is 10%
d. Fair remuneration to the partners for their services is Rs.12000 p.a.

Calculate the value of goodwill

i.

On the basis of 5 years purchase of the annual average super profit

ii.

On the basis of capitalization of the annual average super profit @ the reasonable return of 10%

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iii.

On the basis of an annuity of super profits

Taking the present value of annuity of 1 rupee for 5 years at 10% p.a. interest is Rs. 3.78.
Comment as to which method (out of the above)is most appropriate and why.
OR
a. Define goodwill and explain various methods of its valuation with suitable examples.
b. The paid up share capital of a company consists of 1000,5% preference shares of Rs. 100 each and 2000
equity shares of Rs. 100 each. In addition to a fixed dividend of 5% the preference shareholders are also
entitled to participate in the profit up to 4% after payment of a dividend of 10% on the equity shares. Any
surplus profits being available to equity shareholders.
The annual average profits of the company are Rs.50,000 after providing for depreciation and taxation and it
is considered necessary to transfer Rs.3,000 p.a. to reserve fund. The normal return expected on preference
shares is 8% and that on equity shares is 10%. Find out the value of each of the classes of shares.
UNIT IV
What is Internal Reconstruction? Explain its process in brief. Give Journal Entries. When Assets Value is
decreased & increased, when value of liabilities increased & decreased
OR
On 31st March 2008 A Ltd and B Ltd are agreed to amalgamate and form a new company called as AB Ltd.
Liabilities
Eq. Share cap @ 10/Gen Res.
P/L
Creditor

A Ltd
200000
20000
4000
6000

B Ltd
160000
30000
10000
2000

Assets
A Ltd
B Ltd
Land
100000
90000
Plant
48000
38000
patent
5000
4000
Stock
28000
30000
Debtor
36000
32000
B/R
4000
4000
Cash
9000
4000
TOTAL
230000
202000 TOTAL
230000
202000
AB Ltd will take over all the assets and Liabilities of A and B Ltd. at their existing value.
Purchase consideration will be determined by net assets value method.The consideration to be discharged by
the AB Ltd in the form of its fully paid equityshares of Rs 10 each at par.
Pass necessary journal entries and prepare a Balance sheet in the book of AB Ltd for the amalgamation in the
nature of merger.
UNIT V
c. Give specimen of banks Profit and Loss account and explain its each head in brief.
d. Following balance sheet of Vikas Ltd. And prakash Ltd. show there position as on 31.12.2008.
Liabilities

Vikas ltd

prakash

Share capital (shares of

Rs. 10 each)

Fixed assets
200000

General reserve

50000

P&L a/c on 1.1.2008

30000

creditors

20000

profit for 2008

Assets

50000
350000
The other information is as follows :

50000

vikas

Prakash

195000

70000

60000

35000

25000

20000

10000

40000
350000

2500
107500

Investments

20000 (in share of prakash Ltd.)

7500 Debtors
10000 Stock
20000 Other current assets
107500

1. Vikas Ltd. purchased 4000 share of prakash Ltd on 1st july 2008 at Rs. 15 per share.

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2. Stock of prakash Ltd. includes goods worth Rs.7500 purchased from vikas Ltd which company sells
goods at 25% above cost.
3. Creditor of prakash Ltd. includes Rs.5000 due to vikas Ltd.
You have to prepare consolidated Balance sheet as on 31st dec 2008 showing your working.
OR
a. Define holding company, under what circumstances can a company become subsidiary to another company?
b. The following balances are available from the accounts of Bharat bank Ltd. You are required to prepare the
P/L a/c for the year ending 31st march, 2009 in the prescribed format along with its enclosures. Also give
necessary Notes:
51800
Interest on loan

0
55000

Interest on fixed deposit

Commission received

0
16400
10800

Salaries and allowances

0
39000

Discount on Bills Discounted

0
44600

Interest on cash credits

Interest on current accounts
Rent and taxes

0
84000
36000
30800

Interest on overdrafts
Directors fees
Auditors fees
Interest on savings

0
6000
2400
13600

accounts
Postage and telegram
Printing and stationary
Locker rent
Transfer fees
Depreciation
on

bank

0
2800
5800
2000
1400
Banks

properties
Sundry income and charges
The other information is as
follows:
a)
Rebate on bills discounted
b)
Bad debts
c)

Provision for income tax

********

10000
3400

98000
80000
30000
0