Bangalore University 2007 B.Com Corporate Accounting - I - Question Paper

a) 5,000, 9% Preference shares of Rs. 100 every Rs. 5,00,000, 1, 25, 000 equity shares of Rs. 10 each, Rs. eight per share paid up Rs. 10,00,000.

b) Expected profits before tax Rs. 5,45,000. Rate of taxation is 40%.

c) Transfer to general reserve, every year 20% of profit.

d) Normal rate of earnings from this kind of business is 15%.

6. From the subsequent particulars, prepare Profit and Loss Appropriation Account :

a) Profit and Loss account balance from last year Rs. 62,500.

b) Net profit for the year before tax Rs. 5,40,000 (provision for tax 40%)

c) Transfer to General Reserve Rs. 52,500. Dividend Equalisation Fund Rs. 40,000 and Development Reserve Rs. 37,500.

d) Dividend on 7.5% preference shares Rs. 3,00,000

e) Dividend ar 12.5% on 50,000 equity shares of Rs. 10 each, Rs. 7.50 called up (Calls in arrears Rs. 13,000)

f) Corporate dividend tax 10%.

7. subsequent particulars have been found from the accounts of a company :

Rs.
a) Remuneration of Managing Director 20,000
b) Provision for Bad debts 10,000
c) Provision for taxation 1,50,000
d) Depreciation written off 80,000
e) Loss on sale of investment 70,000
f) Depreciation allowable according to 70,000
Income Tax provisions
g) Net profit after considering the above items 4,50,000

compute remuneration pf Managing Director at 5% of net profit. The net profit should be as per provisions of Companies Act.

8. State the conditions laid down Under part 80 of the Companies Act for redemption of preference shares.

9. Mention the guidelines provided by the Government for transfer of profits to Reserve based on dividends.

part - C

(Answer any 3 of the subsequent. every ques. carries 15 marks.) (3x15=45)

10. X Ltd. invited applications from public for 2,50,000 shares of Rs. 10 every at a premium of Rs. five per share. The entire problem was underwritten by underwriters P, Q, R and S to the extent of 30%, 20%, 30% and 20% respectively with the provision of firm underwriting of 7,500; 2,500; 5,000 and 2,500 shares respectively. The underwriters were entitled to the maximum commission as per legal regulations in force and practice laid down by SEBI.

The company received applications for 1,75,000 shares, excluding firm underwriting. Out of which marked applications were 47,500, 52,500, 25,000 and 20,000 were marked in favour of P, Q, R and S respectively.

Earning:   Approval pending.