The New College (Autonomous)

CHENNAI - 600014

17BFM305 CORPORATE ACCOUNTING-I

Maximum Marks: 50 October 2021 Duration: 2 Hour

Section – A Answer ALL the Questions 5 x 6 = 30 Marks

1. Kailash Ltd. Purchased the business of Mani Bros. for Rs. 54,00,000 payable in fully paid
shares of Rs. 100 each. What entries will be made in the books of Kailash Ltd. If such issue
is (a) at par (b) at a premium of 20% (c) at a Discount of 10%.

2. Bharat Ltd. issued 1,50,000 equity shares. The whole of the issue was underwritten as
follows:
X-50%; Y-25% and Z-25%
Application for the 1,20,000 shares were received in all, out of which applications for the
30,000 shares and the stamp of X, those for 15,000 shares that of Y and those for 30,000
shares that of Z. The Remaining applications for 45,000 shares did not bear any stamp.
Determine the liability of underwriters.
3. Ambassadors Ltd. issued 2,000 shares of Rs.100 each at a premium of 10% payable as
follows: Rs.25 on application, Rs.35 on allotment (including premium), Rs.20 on first call,
Rs. 30 on final call. 1,800 shares were applied for and allotte. All the money was received
with the exception of first an final calls on 200 shares held by Raghu. These shares are
forfeited. Give journal entries and prepare balance sheet.
4. Ambitions Ltd. issued a prospectus, inviting applications for 2,00,000 shares of Rs.10 each
at a premium of Rs.5 per share, payable as follows:
On application Rs.2.50 per share
On allotment Rs.7.50 per share (including premium)
On first call Rs.4 per share
On final call Rs.1 per share Applications were received for 3,00,000 shares .,
Pass necessary journal entries.
5. S.Thodatri Ltd had the following balance sheet as on 1.04.2007
Liabilities Rs Assets Rs
10000 6% Preferance Shares of Buildings 200000
Rs.10 each 100000 Plant 200000
30000 Equity Shares Of Rs.10 Stock 100000
Each 300000 Drs 100000
General Reserve 100000 Cash at Bank 100000
P& L A/C 80000
Creditors 120000
700000 700000
 The Company decided to redeem its preference shares at 10% Premium. For This Purpose,
It issued new 5000 equity shares of Rs.10 each at 10% Premium. Show necessary Journal
Entries and Balance Sheet.

Section – B Answer ALL the Questions 2x 10 = 20 Marks

6. A Ltd. invited applications for 10,000 shares of Rs.100 each at a discount of 5% payable
as follows
Rs.25 on application
Rs.34 on allotment
Rs.36 on first & final call
Applications were received for 9,000 shares and all of these were accepted. All moneys due
were received except the first and final call on 100 shares which were forfeited. Of the
forfeited shares, 50 shares were reissued at the rate of Rs.90 as fully paid. Show necessary
journal entries in the books of the company.

7. Fast forward limited made an issue of 60,000 shares which were underwritten as follows:
“X” – 30,000 shares; “Y” – 18,000 shares and “Z” – 12,000 shares
In addition there was firm understanding as follows:
“X” – 3,000 shares; “Y” – 1,500 shares and “Z” – 4,500 shares
The total subscriptions including firm underwriting were for 45,600 shares. The following
marked from were included in the subscriptions.
“X” – 9,000 shares; “Y” – 13,500 shares and “Z” – 5,100 shares Show the allocation of
liabilities of each underwriter
If the benefit of “firm” underwriting application is given to individual writers by treating
them like “marked forms”.
If the benefit of “firm” underwriting application is not given to individual writers by
treating them like “Unmarked forms”.

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