University of Mumbai 2007 B.A Economics Financial Accounting - Question Paper

(h) All current Assets (excluding cash & Bank) are to be valued at 125% of book value for evaluation of Goodwill).
(i) The market value of Land and Buildings is Rs. 9, 50,000/- and Plant and Machinery is Rs. 2, 00,000/
(j) Liability under workmen compensation fund is expected at Rs. 1, 50,000/-.
(k) Use Simple avg..
Q.5 subsequent is the Balance sheet of RT Ltd. as on 31st March, 2006: 16
Liabilities Rs. Assets Rs.
Share Capital Plant and Machinery 4,00,000
10,000 equity shares Land and Buildings 4,00,000
of Rs. 10/- every 1,00,000 Investments 2,00,000
5,000 9% preference Stock 60,000
Shares of Rs. 100/- every Debtors 1,40,000
fully paid 5,00,000
Bank 1,90,000
(-)call in Arrears 10,000 4,90,000
General Reserve 3,00,000
Securities Premium 20,000
Profit & Loss A/c 50,000
10% Debentures 2,50,000
Creditors 1,40,000
Bills Payable 40,000
13,90,000 13,90,000

On the date of Balance Sheet preference shares are redeemable at premium of 10%. The calls in arrears on preference shares are @ Rs. 20/- per share.
To enable redemption, company took the subsequent measures:-
To send reminders for calls to all preference share holders. Holders of 400 preference shares paid of their dues and remaining shares are forfeited and cancelled.
Sold off investments @ 110% of cost.
20,000 Equity shares, of Rs. 10/- every were issued for cash consideration at 20% premium. The problem was fully subscribed and paid for.
The company then issued bonus shares at par to the then shareholders after problem of new shares, at the rate of 3 shares for every 4 shares held.
Pass necessary journal entries in the books of RT Ltd. for the above transactions and also prepare the Balance Sheet of the company after redemption. Q.6 subsequent is the Trial Balance from the books of Diksha Ltd. as c- 31st March, 2006 :- 16
Debit Rs. Credit Rs.
Land & Buildings (at cost) 4,00,000 Share Capital
Plant & Machinery (at cost) 5,20,000 50,000 Equity Shares of
Motor Car (at cost) 1,00,000 Rs. 10 every 5,00,000
Goodwill (at cost) 2,60,000 8% Debentures (01-04-2005) 4,00,000
Salaries and Wages 72,000 Provision for Tax 70,000
Rent and Taxes 18,000 (Accounting year 2004-05)
Travelling Expenses 16,000 Sundry Creditors 90,000
Printing & Stationery 17,000 Bills Payable 40,000
Motor Car Expenses 8,000 General Reserve 1,80,000
Repairs (Machinery) 16,500 Securities Premium 20,000

Earning:   Approval pending.