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18CSU13
PSG COLLEGE OF ARTS & SCIENCE
(AUTONOMOUS)
BCom(CS) DEGREE EXAMINATION MAY 2021
(Fourth Semester)
Branch – CORPORATE SECRETARYSHIP
CORPORATE ACCOUNTING - I
Time: Three Hours Maximum: 75 Marks
SECTION-A (10 Marks)
Answer ALL questions
ALL questions carry EQUAL marks (10 x 1 = 10)
1 A Company shown on premium received on issue of shares a/c is
(i) Asset side of B/S (ii) Liabilities side of B/S
(iii) Credit side of P& L a/c (iv) Debit side of P & L a/c
2 Debentures having assets mortgaged are called
(i) Redeemable debentures (ii) Secured debentures
(iii) Unsecured debentures (iv) Convertible debentures
3 Gross Profit is to be apportioned between pre and post incorporation periods
in
(i) Time ratio (ii) Adjusted time ratio
(iii) sales ratio (iv) post incorporation
4 Advance payment of tax is in the nature of
(i) Capital expense (ii) Revenue expense
(iii) Prepaid expense (iv) Outstanding expenses
5 Pooling of interest method is used to account for Amalgamations in the
nature of
(i) Merger (ii) Sales
(iii) Purchase (iv) Transfer
6 Alteration of share capital is effected by a company if it is authorized by the
(i) Memorandum of association (ii) Articles of association
(iii) Share holders (iv) Board of directors
7 A company in which more than 50% of shares are held by another company
is termed as
(i) Holding company (ii) Subsidiary company
(iii) Government company (iv) Public company
8 Post acquisition profits are treated as
(i) Revenue profit (ii) capital profit
(iii) goodwill (iv) capital reserve
9 For calculating the value of an equity share by yield method, it is essential to
know
(i) called up equity share capital (ii) capital employed
(iii) normal rate of return (iv) expected rate of return
10 Secured creditors are shown in the statement of affairs under
(i) List A (ii) List B
(iii) List C (iv) List D
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SECTION - B (35 Marks)
Answer ALL Questions
ALL Questions Carry EQUAL Marks (5 x 7 = 35)
11 a Give the necessary journal entries to record the following transactions:
Rams holds 400equity shares of Rs.10 each on which he paid Rs.1
per share on application. Lakshman holds 600 equity shares of Rs.10 each
on which he has paid Rs.1 and Rs.3 per share on application and allotment
respectively.
Bharathan holds 1,000 equity shares of Rs.10 each on which he has
paid Rs.1 on application, Rs.3 on allotment and Rs.2 on first call . They all
failed to pay their arrears and the second call of Rs.2 per share and the
directors, were for feited the shares. All these shares were reissued
subsequently at Rs.11 per share as fully paid.
OR
b Give journal entries in the books of Gugan and Hari company:
Gugan company purchased assets of Rs.7,00,000 and took over the
liabilities of Rs.60,000. It agrees to pay the purchase price Rs.6,60,000 by
issuing debentures of Rs.100 each at a premium of 10%.
Hari company purchased assets of Rs.7,20,000 and took over the
liabilities of Rs.70,000 it agreed to pay the purchase price of Rs.6,69,900
by issuing debentures of Rs.100 each at a premium of 10% and Rs.130 by
cash. The debentures of the same company is quoted in the market at
Rs.130.
12 a Bama Ltd. was registered on 1ST July 2017 to acquire the running business
of Rukamni Ltd. With effect from 1st January 2017. The following was the
profit & loss account of the company on 31st December 2017.
Rs. Rs.
To office expenses 27,000 By Gross Profit bld 1,12,500
To Formation
expenses(written off) 5,000
To Stationery & postage 2,500
To selling expenses 30,000
To directors fess 10,000
To Net profit 38,000
1,12,500 1,12,500
You are required to prepare a statement showing profit earned by the
company in the pre & post incorporation periods. The total sales for the
year took place in the ratio of 1:2 before and after in corporation period.
OR
b From the following particulars, determine the maximum remuneration
available to a full time direction of a manufacturing company. The P & L
account of the company showed a net profit of Rs.80,00,000 after taking
into account the following items:
(i) Depreciation (including special depreciation of Rs.80,000)Rs.2,00,000
(ii) provision for Income tax Rs.4,00,000
(iii) Donation to political parties Rs.1,00,000
(iv) Ex – gratia payment to a worker Rs.20,000
(v) Capital profit on sale of assets Rs.30,000
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13 a Write short notes on : a) Amalgamation B) Absorption
C) External reconstruction
OR
b Nalan Co.Ltd, passed resolution and got court permission for the reduction
of its share capital by Rs.10,00,000 for the purposes mentioned as under:
(i) To write off the debit balance of P & L a/c of Rs.4,20,000.
(ii) To reduce the value of plants & Machinery by Rs.1,80,000 and
goodwill by Rs.80,000.
(iii) To reduce the value of investments by Rs.1,60,000.
The reduction was made by converting 1,00,000 preference shares
of Rs.20 each fully paid to the same number of preference shares of Rs.15
each fully paid by converting 1,00,000 equity shares of Rs.20 each on
which Rs. 15 is paid up ito 1,00,000 equity shares of Rs 10 each fully paid
up.
Pass journal entries to record the share capital reduction.
14 a Explain the steps involved in preparation of consolidated balance sheet.
OR
b Sun Ltd. Purchased 1,500 shares in Moon ltd on 1.7.2014. the following
were their balance sheet on 31.12.2014.
Liabilities Sun Ltd Moon Assets Sun Ltd Moon Ltd
(Rs.) Ltd (Rs.) (Rs.)
(Rs.)
Share capital: Buildings 4,10,000 2,50,000
Shares of Rs.100 6,00,000 2,00,000 Stock 2,00,000 1,60,000
each 2,00,000 1,40,000 Debtors 2,00,000 80,000
Gen.reserve 1.1.2014 2,00,000 1,20,000 Investment in moon
Profit & Loss a/c 1,60,000 80,000 ltd 2,00,000 __
Creditors 1,00,000 40,000 Bills receivable 80,000 90,000
Bills payable _ 40,000 Cash at book 1,20,000 40,000
Current A/c : Sun Ltd Current a/c: Moon Ltd
50,000
12,60,000 6,20,000 12,60,000 6,20,000
Additional information :
(i) Bills receivable of sum ltd include Rs.20,000 accepted by moon ltd.
(ii) Debtors of sum ltd include Rs.40,000 payable by Moon Ltd
(iii) A cheques of Rs.10,000 sent by moon ltd on 28th December was not yet
received by sum Ltd on 31.12.2014.
(iv) Profit & Loss A/c of Moon Ltd. showed a balance of Rs.40,000 on 1.1.2014
you are required to prepare consolidated balance sheet of sun lLtd and
Moon Ltd. as on 31.12.2014
15 a Average capital employed in Neelan Ltd. is Rs.70,00,000 where as net
trading profit before tax for the last three years have been Rs.29,50,000;
Rs.29,10,000 and Rs.30,50,000. In these 3 years the managing director
was paid a salary of Rs.20,000 pm. But now he paid a salary of Rs. 24,000
pm normal rate of returns expected in the industry in which Neelan Ltd. is
engaged is 18% rate of tax is 50% . Calculate goodwill on the basis of 3
years purchase of super profits.
OR

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b The issue of share capital of accompany was Rs.20,00,000 consisting of
Rs.20,000 equity shares of Rs.100 each. The net profits for the last 5
years were :Rs.2,00,000; Rs.1,60,000;Rs.2,40,00:3,20,000 and Rs.
2,80,000 of which 20% was placed to reserve, this proportion being
considered reasonable in the industry in which the company is engaged
and where a fair investment return may be taken at 12 %. Compute the
value of the company’s share by the yield value method.
SECTION - C (30 Marks)
Answer any THREE Questions
ALL Questions Carry EQUAL Marks (3 x 10 = 30)
16 Nandhi Ltd issued for the public subscription 1,00,000 equity shares of
Rs. 100 each at a premium of Rs. 20 per share payable as under:
On application Rs. 20: On allotment Rs.50(Including premium): On the
first call Rs.20 and On final call Rs.30.
Applications were received for 1,50,000 shares. The shares were allotted
pro rata to the applicants for 1,20,000 shares, the remaining applications
being rejected. Money over paid on application was utilized towards sums
due to allotment.
Ganesh to whom, 4,000 shares were allotted, failed to pay allotment and
call money and Vignesh to whom 5,000 shares were allotted failed to pay
the two calls. These were subsequently forfeited after the second call was
made.
All the forfeited shares were sold to Ramesh as fully paid up at Rs.80 per
share.
Pass necessary journal entries and also prepare the Balance sheet, after the
transactions are complete.
17 Arjun Ltd was incorporated on 01-05-2013 to take over the business of Beema
Ltd as a going concern from 01-01-2013. the profit and loss account for the
year ending 31-12-2013 was as follows:
Dr Cr
Particulars Rs. Particulars Rs
To Rent and Taxes 24,000 By Gross Profit b/d 3,10,000
To Insurance 6,000
To Electricity Charges 4,800
To Salaries 72,000
To Director’s fees 6,000
To Auditor’s fees 3,200
To Commission 12,000
To Advertisement 8,000
To Discount 7,000
To Office Expenses 15,000
To Carriage 6,000
To Bank Charges 3,000
To Preliminary 13,000
expenses
To bad debts 4,000
To Interest on loan 6,000
To Net Profit 1,20,000
3,10,000 3,10,000
The total turnover for the year ending 31.-12-2013 was Rs.10,00,000
divided into Rs.3,00,000 for the period upto 01-05-2013 and Rs.7,00,000
for the remaining Period.
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18 Differentiate between pooling of interests method and purchase method.

19 From the Balance sheet given below, prepare consolidated Balance sheet.
Balance sheet as on 31st March 2015
Liabilities Kambar Valmeeki Assets Kambar Valmeeki
Ltd Rs. Ltd. Rs. Ltd Rs. Ltd. Rs.

Share Capital: Fixed Assets 4,00,000 60,000

Shares of Rs. 10 each 5,00,000 1,00,000 Stock 3,00,000 1,20,000
Profit and Loss A/c 2,00,000 60,000 Debtors 75,000 85,000
Reserves 60,000 40,000 Bills receivable 20,000 -
Bills Payable - 15,000 Shares in Valmeeki Ltd. 75,000 -
7,500 at cost
Creditors 1,10,000 60,000 Preliminary expenses - 10,000
8,70,000 2,75,000 8,70,000 2,75,000
Additional Information:
i) The bills accepted by Valmeeki Lts are all in favour of Kambar Ltd.
ii) The stock of Kambar Ltd. included Rs.25,000 bought from Valmeeki Ltd. at a
profit to the latter of 20 % of sales.
iii) All the Profits of Valmeeki Ltd. has been earned since the shares were acquired
by Kambar Ltd. but there was already the reserve of Rs. 40,000 at that
date.

20 The following particulars relate to Karthir Ltd which has gone into voluntary
liquidation. You arte required to prepare the liquidators final account.

1
Allowing for his remuneration at 3% on the amount realised and 2 % on the
2
amount paid to unsecured creditors.

Share Capital issued:

10,000 Preference Shares of Rs. 100 each(fully paid)
60,000 equity shares of Rs. 10 each fully paid.
24,000 equity shares of Rs 10 each Rs. 8 paid up.

Assets realised Rs. 18,48,000 excluding amount realised by sale of securities held
by the secured creditors.
Preferential creditors Rs. 48,000/-
Unsecured creditors Rs.17,62,188/-
Secured creditors(security realised Rs.3,24,000) Rs. 2,76,000/-
Debentures having a floating charge on the assets Rs. 6,00,000/-
Expenses of liquidation amounted to Rs. 18,000/-

A call of Rs. 2 per share on the partly paid equity shares was duly paid except in
case of one shareholder owing 2,400 shares.

Z-Z-Z END