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21BCOM4C10
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B.Com. IV Semester Degree Examination, Sept./Oct. - 2024

COMMERCE
DSC 10 : Advanced Corporate Accounting

(NEP)
Time : 2 Hours Maximum Marks : 60

Note : Answer all the sections.

SECTION - A

1. Answer the following sub-questions, each sub-question carries one mark. 10x1=10

(a) What are divisible profits ?

(b) Define Human Resources Accounting.

(c) Mention two types of reconstruction.

(d) What is acquisitions ?

(e) What are the types of Amalgamation ?

(f) What are Bonus Shares ?

(g) Who is liquidator ?

(h) What is Voluntary liquidation of a company ?

(i) What do you mean by alteration of share capital ?

(j) Give the meaning of social responsibility Accounting.

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SECTION - B

Answer any four of the following questions, each question carries five marks.
4x5=20
2. The following balance are appearing in the ledger of a company as on 31.12.2022.
Equity shares (fully paid up) ` 6,00,000
Redeemable preference share (fully paid up) ` 3,00,000
General Reserve ` 2,00,000
Profit and loss a/c (credit balance) ` 1,25,000
Share premium account ` 50,000
The company decided to redeem the preference shares out of general reserve
and the balance out of undistributed profits.
Give the Journal entries relating to the redemption of preference shares.

3. The position of the ‘N’ Co. as on 31-03-2019 was as follows.

Sundry Assets ` 13,00,000
Current Liabilities ` 2,50,000
10% Debentures ` 3,50,000
Eshwar Co. agreed to takeover the business of the above company except 10%
debentures, on the following terms :
(i) Sundry assets are to be valued at ` 10,75,000
(ii) Current liabilities are to be taken at 20% less. Calculate purchase
consideration.

4. PQR Co. Ltd. decided to go for internal reconstruction on the following terms.
(a) 10,000 equity shares of ` 10 each fully paid reduced to ` 5 each fully paid.
(b) 5,000 preference shares of ` 10 each fully paid reduced to shares of ` 5 each
fully paid.
(c) 100 10% debentures of ` 500 each converted into 500 6% debentures of
` 50 each.
(d) The debit balance of profit and loss a/c of ` 25,000 and preliminary expenses
of ` 30,000 were to be written-off.
(e) The value of plant and machinery and stock were written-off by ` 15,000 and
` 12,500 respectively.
Pass Journal entries.

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5. Siddu Ltd. provides the following information.

Particulars `
Liquidation expenses 6,000
Preferential creditors 7,000
Unsecured creditors 18,000
Debentures 21,000
Assets realised 1,90,000
Liquidator is entitled to a remuneration of 5% on assets realised and 6%
commission on unsecured creditors.
Calculate the Commission.
6. What are the objectives of Accounting Standards ?
7. Explain the difference between Merger Method and Purchase Method.
SECTION - C
Answer any three of the following questions, each question carries ten marks.
3x10=30
8. The following is the Balance Sheet of Manju Ltd. as on 31-03-2023.
Particular Note `
(I) Equity and Liabilities
(1) Shareholders Funds :
(a) Share capital 1 6,98,000
(b) Reserves and Surplus .- 2,40,000
(2) Non-current liabilities .- .-
(3) Current liabilities (creditors) .- 52,000
Total 9,90,000
(II) Assets
(1) Non-current Assets :
Tangible fixed assets .- 6,10,000
(2) Current Assets :
Cash and cash equivalents .- 3,80,000
Total 9,90,000
Notes : `
1. Share capital
5,000 equity shares of ` 100 each fully paid 5,00,000
2,000 redeemable preference share of
` 100 each 2,00,000
Less : calls unpaid (` 10 per share) 2,000 1,98,000
Total 6,98,000
On the above date preference shares are redeemed to the extent possible at a
premium of 5% out of profit and loss account. Pass Journal entries and show an
ended Balance Sheet.

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9. ‘A’ Ltd. and ‘B’ Ltd. have decided to amalgamate their business by forming New
company called ‘AB’ Ltd. to takeover the assets and liabilities of both the companies
on the basis of the following Balance Sheet.
Particular Note A Ltd. B Ltd.
I. Equity and liabilities
Shareholders funds :
Share capital .- 3,00,000 3,00,000
Reserves and surplus 1 ( −)60,000 20,000
Current liabilities : Trade payables 2 55,000 70,000
Total 2,95,000 3,90,000
II. Assets
Non-current assets :
Tangible fixed assets 3 1,60,000 1,90,000
Intangible fixed assets (Goodwill) .- .- 50,000
Current Assets
Inventories (stock) .- 80,000 50,000
Trade receivable's (Debtors) .- 35,000 70,000
Cash and Cash equivalents (cash) .- 20,000 30,000
Total 2,95,000 3,90,000
Notes A Ltd. B Ltd.
1. Reserves and Surplus
General Reserve .- 10,000
Profit and Loss Account (−)60,000 10,000
Total (−)60,000 20,000
2. Trade Payables :
Bills payable 25,000 30,000
Creditors 30,000 40,000
Total 55,000 70,000
3. Tangible fixed assets
Buildings 70,000 1,00,000
Furniture 90,000 90,000
Total 1,60,000 1,90,000
4. Trade Receivable's
Debtors 20,000 40,000
Bills Receivables 15,000 30,000
Total 35,000 70,000
Ascertain the purchase consideration of each company and prepare the
amalgamated Balance Sheet. Apply Merger Method.

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10. Discuss the needs and features of Social Accounting.

11. The Balance Sheet of Kishor Co. Ltd. on 31-12-2021 is as under.
Particular Note `
I. Equity and Liabilities
Shareholders Funds :
Share capital 1 7,00,000
Reserves and surplus 2 ( −)1,80,000
Non-current liabilities
10% Debentures .- 50,000
Current Liabilities :
Trade payables (creditors) .- 40,000
Others (Bank overdraft) .- 10,000
Total 6,20,000
II. Assets
Non-current Assets :
Tangible fixed Assets 3 4,50,000
Intangible fixed Assets
Goodwill .- 30,000
Current Assets :
Inventories (stock-in-trade) .- 35,000
Trade receivables (Debtors) .- 85,000
Cash and cash equivalents (cash) .- 20,000
Total 6,20,000
Notes `
1. Share Capital :
2,000 9% cumulative preference
shares of ` 100 each 2,00,000
5,000 equity shares of ` 100 each 5,00,000
Total 7,00,000
2. Reserves and Surplus
Preliminary expenses ( −)20,000
Profit and loss account (debit balance) ( −)1,60,000
( −)1,80,000
3. Tangible fixed assets
Buildings 2,00,000
Machinery 2,00,000
Furniture 50,000
Total 4,50,000

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The following scheme of reconstruction is adopted with concent of all :

(a) The preference shares be reduced to ` 75 per share as fully paid.
(b) The equity shares be reduced to ` 50 per share fully paid.
(c) The debenture holder to takeover the stock in fully satisfaction of the amount
due to them.
(d) The amount so available be used to write-off goodwill preliminary expenses,
losses and depreciate buildings and machinery at 10% each and write-off
book debts ` 10,000 as bad and doubtful.
(e) The repayment of the bank overdraft.
Pass the Journal entries and prepare the revised Balance Sheet of the company
after reconstruction.

12. The Vijay Co. Ltd. went into voluntary liquidation on 31-12-2022. The capital of
the company consisted of :
(a) 2,000 12% preference shares of ` 100 each fully paid.
(b) 25,000 equity shares of ` 10 each fully paid.
(c) 30,000 equity shares of ` 10 each ` 8 paid up.
(d) 40,000 equity shares of ` 10 each ` 7 paid up.
The dividend on the preference shares was in arrears for one year. The unsecured
creditors ` 1,00,000 included ` 25,000 towards preferential creditors.
The assets realised ` 4,49,000. The liquidation expenses amounted to ` 7,520.
The liquidators remuneration was fixed at ` 8,000 and a commission of 2% on the
amount paid to preference shareholders as capital and dividend.
Preference shareholders have priority in regard to repayment of capital and dividend
over equity shareholders.
Prepare Liquidators Final Statement of account.

-oOo-

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