Subject Code: A2

Paper: Corporate Accounts

Specific Instructions:
Answer all the four questions.
Marks allotted 100. Each Question carries equal marks.
Word limit is 250-300 words

General Instructions:
he !tudent should su"mit this assi#nment in the handwritten form $not in the t%&ed format'
he !tudent should su"mit this assi#nment within the time s&ecified "% the e(am de&t
Each Question mentioned in this assi#nment should "e answered within the word limit s&ecified
he student should onl% use the )ule sheet &a&ers for answerin# the questions.
he student should attach this assi#nment &a&er with the answered &a&ers.
*ailure to com&l% with the a"o+e *i+e instructions would lead to re,ection of assi#nment.
_____________________________________________________
Question No 1
-istin#uish "etween.
a. -issolution of firm and dissolution of &artnershi&
". /artici&atin# 0 non &artici&atin# &reference shares
c. -e"enture holder 0 !hareholder
d. )eser+e and &ro+isions
Question No 2
A. )ashi 1td. a#reed to acquire the "usiness of -hanu 1td. as on 31st March2 2003. he
summarised "alance sheet of -hanu 1td. as at that date was as follows .
1ia"ilities )s. Assets )s.
!hare ca&ital in full% 4oodwill 12002000
&aid-u& shares
of )s.10 each 32002000 1and and "uildin#s 22302000
4eneral reser+e 12502000 /lant and machiner% 62102000
/rofit and loss account 12102000
127 -e"entures 12002000 !tock in trade 12382000
9reditors 202000 -e"tors 332000
9ash at "ank 532000
102002000 102002000
he consideration &a%a"le "% )ashi 1td. Was a#reed as follows .
$i' A cash &a%ment equi+alent to )s.2.50 for e+er% share of )s.10 in -hanu 1td.
$ii' he issue of :02000 )s.10 equit% shares2 full% &aid in )ashi 1td. ha+in# an a#reed
+alue of )s.15 &er share.
)ashi 1td. also a#reed to dischar#e the 127 de"entures of -hanu 1td. at a &remium of 207 "%
allotment of its 167 de"entures at :37. While com&utin# the a#reed consideration2 the directors
of )ashi 1td. +alued the followin# assets at +alues noted a#ainst them .
)s.
1and and "uildin#s 52502000
/lant and machiner% 62502000
!tock in trade 12622000
-e"tors !u",ect to an allowance of 57 to co+er dou"tful de"ts.
he cost of liquidation of -hanu 1td. came to )s.52000 which was "orne "% )ashi 1td.
/re&are the realisation account and equit% shareholders account in the "ooks of -hanu 1td.and
draft ,ournal entries required in the "ooks of )ashi 1td. assumin# if it is in the nature of &urchase.
B . !ri,an 1imited issued )s. 102002000 new ca&ital di+ided into )s. 100 shares at a &remium of
)s. 20 &er share2 &a%a"le as under .
;n A&&lication )s. 10 &er share
;n Allotment )s. 60 &er share $includin# &remium of )s. 10 &er share'
;n *irst and *inal 9all <alance
;+er-&a%ments on a&&lication were to "e a&&lied towards sums due on allotment and first and
final call. Where no allotment was made2 mone% was to "e refunded in full. he issue was
o+ersu"scri"ed to the e(tent of 132000 shares. A&&licants for 122000 shares were allotted onl%
22000 shares and a&&licants for 32000 shares were sent letters of re#ret and a&&lication mone% was
returned to them.
All the mone% due was dul% recei+ed.
4i+e =ournal Entries to record the a"o+e transactions $includin# cash transactions' in the "ooks of
the com&an%.
Question No 3
A. A com&an% &roduces a sin#le &roduct and sells it at )s.200 each. he +aria"le cost of the
&roduct is )s.120 &er unit and the fi(ed cost for the %ear is )s.:32000.
9alculate >
$i' /?@ ratio.
$ii' !ales at "reak-e+en &oint.
$iii' !ales units required to earn a tar#et net &rofit of )s.12202000.
$i+' !ales units required to earn a tar#et net &rofit of )s.12002000 after income-ta(2
assumin# income-ta( rate to "e 507.
$+' /rofit at sales of )s.52002000.
B . 1 and M share &rofits of a "usiness in the ratio of 5.3. he% admit A into the firm for a fourth
share in the &rofits to "e contri"uted equall% "% 10M. ;n the date of admission2 the <alance
!heet of 10M is as follows.
<alance !heet
erms of A.s admission were as follows .
$i' A will "rin# )s. 252000 as his ca&ital.
$ii' 4oodwill of the firm is to "e +alued at 6 %ears. &urchase of the a+era#e su&er &rofits of the
last three %ears. A+era#e &rofits of the last three %ears are )s. 202000B while the normal &rofits
that can "e earned on the ca&ital em&lo%ed are )s. 122000.
$iii' *urniture is to "e a&&reciated to )s. 262000 and the +alue of stock to "e reduced "% 207.
/re&are )e+aluation Account2 /artners 9a&ital Accounts and the <alance !heet of the firm after
admission of A.
Question No 4
Write notes on the followin#.
a. Cssue of share at discount
". *orfeiture of shares issued at &remium alon# with rele+ant accountin# entries.
c. 9ontin#ent lia"ilities
d. DtiliEation of share &remium account