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

compute the liability of every 1 of the underwriters treating,
a) Firm underwriting as marked applications and
b) Firm underwriting as unmarked applications.

Also ascertain the underwriters commission payable to various underwriters.

11. The subsequent is the Balance Sheet of Green Land Ltd. on 31-12-2004.

Liabilities Rs. Assets Rs.

50,000 Equity shares of Rs. 10 each 5,00,000 Fixed assets 6,00,000

1,000, 10% preference 1,00,000 Bank 1,00,000
shares of Rs. 100 every
fully called up Other current assets 2,00,000

Less Calls in arrears (on 1,000 99,000
50 shares at rs. 20 each) ----------

General reserve 1,00,000

Development Rebate Reserve 50,000

Current liabilities 1,51,000

9,00,000 9,00,000

The preference shares were redeemed on the subsequent bases :

1) Issue of 4,500 equity shares of Rs. 10 every at a premium of 10%.
2) Expenses on fresh problem of shares Rs. 5,000
3) Of the preference shares, holders for 40 shares paid the call money before the date of redemption. The balance 10 shares were forfeited for non payment of calls before redemption. The forfeited shares were re-issued as fully paid on receipt of Rs. 500 before redemption.

Preference shares were redeemed at a premium of 10% and securities premium amount was utilized in full for the purpose.

Journalise the transactions and prepare Balance Sheet after redemption.

12. The subsequent is the Balance Sheet of ‘X’ Ltd. on 31st Dec. 2001.

Liabilities Rs. Assets Rs.

Equity share capital of Rs. 10 each 5,00,000 Buildings 1,65,000
General reserve 2,00,000 Machinery 85,000
Profit and Loss A/c 1,00,000 Furniture 50,000
Sundry creditors 60,000 Motor vans 1,00,000
Bills payable 20,000 Investments 1,00,000
Provision for tax 20,000 (Market price 1,20,000)
Stock 1,50,000
Debtors 80,000
Bank 1,70,000

9,00,000 9,00,000


Net profit before tax :

1999 - Rs. 2,10,000 ; 2000 - 2,20,000 ; 2001 - Rs. 2,50,000. Rate of taxation 40%. Income from Investments may be taken at 6%. Normal rate of return on avg. capital employed is 15%. Buildings is valued at Rs. 1,80,000 and Machinery at Rs. 90,000. Taking weighted avg. of proits after tax as basis, compute the value of goodwill based on

a) 5 years purchase of super profits.
b) Capitalization of super profits.
c) Annuity of super profits taking annuity rate at 2.97 (Ignore additional depreciation on Buildings and Machinery).

13. The subsequent figures were extracted from the books of Elegant Ltd :

Share Capital : Rs.

9% preference shares of Rs. 100 each 3,00,000

a) 1,000 Equity shares of Rs. 100 every Rs. 50 called up 50,000
b) 1,000 Equity shares of Rs. 100 every Rs. 25 called up 25,000
c) 1,000 Equity shares of Rs. 100 every fully called up 1,00,000

Reserves and surplus :

General Reserve 2,00,000
Profit and Loss A/c 50,000 2,50,000
--------------- ---------------
7,25,000

On a fair evaluation of all the assets of the company, it is obtained that they have an appreciation of Rs. 75,000.

The Articles of Association given that in case of liquidation, the preference share holders will have a further claim to the extent of 10% of the surplus assets.

Ascertain the value of every preference and equity share assuming a liquidation. Ignore expenses of winding up.

14. The subsequent Trial Balance has been extracted from the books of Amar Ltd. as on 31-3-2001. You are needed to prepare :

a) Profit and Loss Account for the year ended 31-3-2001 and
b) Balance sheet as on that date.

Debit Balances Rs. Credit Balances Rs.

Land and Building 1,40,000 Share capital 2,00,000
(Original cost Rs. 3,00,000) General Reserve 30,000
Furniture 8,000 8% debentures 1,00,000
(Original Cost Rs. 15,000) Bank overdraft 1,500
Plant and Machinery 1,00,000 Sundry creditors 10,000
(Original Cost Rs. 2,00,000) Securities Premium 6,000
Investments 6,000 Gross profit 1,14,000
Preliminary expenses 4,000 Sinking fund 40,000
Advance Income tax 8,000 Profit and Loss A/c
Printing and Stationery 1,200 (1-4-2000) 8,500
Stock on 31-3-2001 1,28,000
Salaries 8,000
Debtors 70,000
Cash on hand 2,000
Cash at bank 24,000
Interest 2,000
Debenture interest 4,000
Director’s fees 2,000
Rent, rates and insurance 2,800

5,10,000 5,10,000

Adjustments :

1) give depreciation on :
a) Land and Buildings at 5% on straight line basis.
b) Furniture and Plant and Machinery at 20% on reducing balance basis.
2) give Rs. 5,000 for bad debts.
3) give for audit fees Rs. 2,500, Provision for Income Tax Rs. 14,000 and debenture interest for six months.
4) Insurance prepaid Rs. 800
5) Write off half of preliminary expenses.
6) Directors have recommended :

a) Transfer of Rs. 10,000 to Sinking Fund
b) Transfer of Rs. 4,000 to General reserve
c) Equity dividend at 8% on paid up capital.

7) give for Corporate Dividend Tax 10%.


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Earning:   Approval pending.