ililillllllllllllllllllllllllllll ss - 470

3+ 2018
- B.Gom. Examination, November/December
lll semester (F + R)
(2015 - 16 and Onwards) (CBCS)
COMMERCE
3'3 : CorPorate Accounting
' Max. Marks : 70
Time : 3 Hours

lnstruction:AnswershouldbewrittencompletetyeitherinEnglishorin
Kannada.
SECTION _ A

l.Answeranyfivesub-questions'Eachcorrectquestioncarriestwomarks.(5x2=10)
a) Who is an Underwriter ?
pre and post incorporation
b) what ratios are normally used to apportion
incomes and exPenses ?
in the books of accounts ?
c) How do you treat the loss prior to incorporation
d) What is Goodwill ? ,".".
a, '.,..
"i:'. ;&
e) state any two methods of valuation of shares. i; ,t, ,i:t
? iU - t t:!,
f) What is meant by lnterim dividend - .
t\V*.:Jl
g) What is Corporate Dividend Tax ? ,.,"''''

SECTTON _ B

Answeranythreequestions.Eachcorrectquestioncarriessixmarks.(3x6=18)

M company issued 1 ,oo,0oo shares of

Rs' 10 each. The whole issue was fully
2, shares;
: A- 4O,OOO shares; B -30'000
underwritten by A, B, C and D as follows
C 10,000 shares and D - 20'000 shares'
-
shares of which marked
The company received applications for 90,000
aPPlications were as follows :

A_44,000 shares; B_22,000 shares; C_2,ooo

shares and D - 18,000 shares'
DeterminetheNetliabilityofeachunderwriters.
P.T.O.

-!
:
ss - 470 -2- 1|ililflililttfiIililtiltiltilil

3. Virat Ltd. had purchased a business on 1-4-2017. The company received its
certificate of incorporation on 1-9-2017. The average monthly sales for the
period before incorporation was 25o/" more than the average monthly sales for
the period after incorporation. The total sales during the year was Rs. 6,00,000.

Ascertain :

a) Time Ratio
b) Sales Ratio
c) Pre and Post incorporation sales.

4- Sushma Limited has invested a sum of Rs. 12,00,000 in her own business
which is very profitable one. The annual profit earned from her business is
Rs. 2,40,000 which included a sum of Rs. 40,000 received as compensation
for acquisition of part of her business. The money could have been invested
in deposits for a period of 5 years at 10% interest and herself could earn
Rs. 28,800 per annum in alternative employment considering 2/" tair
compensation for the risk involved in the business.

Calculate the value of Goodwill of her business on capitalisation of super profits

at normal rate of return of 12/".

5. Following information relates to Rahul Ltd.

9,000, 10^h Preterence shares of Rs. 100 each Rs. 9,00,000

10,000 Equity shares of Rs. 100 each Rs. 10,00,000

Average Profit Before Tax Rs. 7,50,000

Rate of Tax 40o/"

Transfer to be made to reserves 20%

Normal Flate of Return 15%

Ascertain the value of equity shares under yield method.
 ss - 470
llillllllllllllllllllllllllllllllll -3-

are shown in the Balance

6.Statetheheadingunderwhichthefollowingitems
Sheet of the company'

a) Provision for taxation

b) Trade investment

c) Bilts PaYable

d) Goodwill

e) Debentures
f) Bank Overdraft.

SECTION _ C

carries fourteen marks' (3x14=42)

Answer any three questions. Each correct answer

shares of Rs' 60 each'

7. Trishitha company Limited issued 1,00,000 equity
proportion ol 40"/o,30/",20"/"
A, B, C and D underwrite the entire issue in the
in cash @ 4%' They also
and 10% respectively in consideration of commission
apply for firm share application as follows :

_ shares.
A _ 3,000 Shares, B - 2,000 shares, C - 2,000 shares and D 3,000
marked
Besides the firm applications, the pubtic apply for 60,000 shares of which

applibations are as follows :

- 6,000 shares, c - 8,000 shares and D -

16'000 shares'
A- 10,000 shares, B
of the undenruriters treating
show the number of shares to be taken up by each

a) firm applications as marked applications

b)firmapplicationsaSunmarkedapplicationsand

c)findoutthecommissionpayabletoundenruriters.
ss - 470 ililIililIillililil|1il1

B. Jay Bharath Ltd. Took over the business of Gagan on "l-4-20"17 and it was
incorporated on 1-7-2A17, The cornpany closes its books of accounts on 31-3-2018.
The profit and loss account of Jay Bharath Ltd" On 31-3-2018 was as folk:ws :

Particulars Rs. Particulars Rs.

To Commission (Sales) 5,25C By Gross Profit 1,96,000
To Advertising 10,500 By Bad Llebts recovered 1,C)0C)

To M.D.'s Remuneration 18.000

To Depreciation 5,600
To Salaries 36,000
To lnsurance 1,200
To Preliminary Expenses
.1,400
written off
To Rent and Taxes 6,000
To Discount 700
To Bad Debts 2.500
To Net Profit 1,09,850
1,97,000 1,97,000

Additional information
a) The average monthly sales after incorporation was twice the average
monthly sales before.
b) Rent which was paid for the first 3 rnonths at Rs. 400 per month, increased
by Rs. 100 per month for the balance of the period.
c) Bad debts of Rs.700 related only to the period after 1-9-2017 and the
balance related to the sales made upto 1 -g-2O17.

d) The bad debts realised belong to the bad debts which were written off in
2016 - 17.
Find out the profits before and after incorporation.
I il Itl]tI: tillilllllllllllll ss - 470
9. The Balance Sheet of MSD Ltd. as on 31 -12-2017 "

Liabilities Rs. Assets Rs,

Equity shares of Rs. 10 each 2,50,000 Fixed Assets 2,00,000

General Reserves 1,00,000 lnvestments

Profit & Loss Account 50,000 (5% Govt. Bonds) 50,000

Current Liabilities 50,000 Current Assets 2,00,000

4,50,000 4,50,000

Additional information :

a) Net Profit after Taxation :

2015 - Rs. 65,000; 2016 - Rs. 62,500; 2017 - Rs. 75,000
b) Normal Rate of Return is 10%
c) Current Assets are to be taken at Rs. 2,10,000.

Ascertain the value of goodwill under -

i) 4 years purchase of super profits
ii) Capitalisation of Super profits
iii) Annuity of super profits taking annuity factor of Re. 1 for five years at
10% as Rs. 3.78.

10. Following is the Balance Sheet of Sameer Limited as on 31't March 2018.

Balance Sheet as at 31"t March 2018

Liabilities Rs. Assets Rs.

20,000 Equity shares of Goodwill 50,000

Rs. 10 each fully paid up 2.00,000 Fixed Assets 2,25,000
Reserve Fund 50,000 Current Assets 95,000
Profit and Loss fuc 17,500 PreliminaryExpenses 12,500

692" Debentures 50,000

Current Liabilities 65,000
3,82,500 3,82,500
ss _ 470 _6_ llilllililllilillllllllllllil

Rs' 2'50'000
For the purpose of valuation of
shares fixed assets were valued at
of
goodwill at Rs, 75,000. There is a necessity of RBD al lo"/" on debtors
and

Rs. 37,500. lt was found that the

stock WaS overvalued by Rs. 4,500'

ThenetprofitsforthethreeyearsWereRs'34,500,Rs'35,900andRs,45,100
the
respectively, after taxation. out of
this profit 20% was placed to reserve'
in the industry in which the company
proportion being considered reasonabte
rate of return is 2O%'
is engaged and where the normal
by
Compute the value of each Equity share
:

1) lntrinsic value method;

2) Yield method and

3) Fair value method'

ll.FollowingistheTrialBalanceofSRLtd'asat31.3-2018.
Dr. ({) Cr. (T)
Particulars
75,000
Opening stock
1,90,000
Purchases
30,000
Wages
1,000
Carriage
12,500
Furniture
6,000
Salaries
7,500
Rent
5,500
Trade ExPenses
27 ,A00
Sundry Debtors

':a
I iilililtillll lll illll llillllllllll ss - 470

Plant and Machinery 6,00,000

Cash at Bank 10,750

Patents 4,500

Bills Receivables 7,000

Bad Debts 3,250

Discount Allowed 4,000

Equity share capital 2,50,000

Purchase Return 5,000

Sales 5,75,000

Discount Received 3,150

S;rp'';s account 85,000

Sundry Creditors 16,850

General Reserve 41,000

Bills payable 6,500

Provision for doubtful debts 1,500

9,84,000 9,84,000

Additional lnformation :

a) Stock on 31-3-2018 - Rs. 1 ,00,000.

b) Depreciate Plant and Machinery all2o/o, Furniture al1O"/" and Patents at 20%.
c) Further Bad debts amounted to Rs. 2,000. Provide 5o/" on debtors for bad debts.
d) Provide for income tax @ 35% and for corporate dividend tax @ 20.3576%.
e) The Board of Directors recommended a dividend of 25"h.
Prepare Final Accounts of the Company, as per Companies Act, 2013.
 -B-
llllllllllllllilll
ss - 470

d{a u{p
eryad'- a

wi-{d;lpri srrdoi. de ioolDc ercQdd 2 :::=r'::' (5x2=10)

1. o1>d;cnddlo eceb

a) s)oeo ?iddd Ce;l-9 ccCd chcb ?

;ocli,,= .
b) ioclJ! eud dpdr d:Q dcddd gmc$ dJQ CIdJr.dqlib =:::;:
oJDd er$mdddd: udi,:ao Z

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d) seBrdPo^?) aodded> ?

e) de&rlddtre-rrddldod:aaC>dCndoaddJa2aqDdrld$4ee'tu'

f) d;mrodd enzPod .lodde& ?

?
s) dodPo$ erozPod dod "lcCded:

aqrozl -a

ioeiEd' Ed*6 er#ddo' (3x6=18)

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rJ mrL. -;--
2, oo doi&cr: dlo. 10 5g3JJ 1,00.000
d.ed:dqd -,4praraorr dddddr'o+i;q; ===:= : - 40.000 -xed:dd:; r; - 3l 'c0
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J^JJ^r^s{.
6?OU(i]U9c^J .

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de&ddc.

$o eo qJddnoEdd e*d osaoarcoo o3:dldodaaobo' il

I illlil ilil lil lllil lllll llil lill ss - 470

3. :r: !i i. r:C: dudaadddloapod 1 -4-2017 doC $oeoiodd. iooSoexdoJ: $dneo

socd 1-9-2017 dod: dda&$d. ioo3oexdob dBdrd dnx,d ioado
=9.a:.
+:e.. ':-'
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a) i5r3bd er$md
b) ;ecoo;d erd;and
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4. ddg{od q,aodde- dra. 12,00,000 uoda;oddd1 doaeo.d. erd>
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doaad d"gd) deodooad (dooad$ no{o$ uoC> teddq driddooa&ddd* ).
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v{

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5. dddod iodgrldc ocd:er O. ;::: =.---,l:;:5:,o

; :

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=;- -:*:J:d9.>
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=:u:i1+.)
dori d::d iooio oat| dto. 7,50,000

JCJ JJ
9()/\ CJO 40%

! Q ri drla r ou:i?,3 e6E d6b 2OY"

^r: wL\-ri: "-"J

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liL,J(, 1s%
--iM

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ss - 470
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a) dort a>edq:
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c) mda d:oarlsl>
d) se8rdfao,
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f) zmroa'tuedddddr'

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d d o-e drDEddld od>aoa ouo'
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8. rrc$ ?pdd O. oroz.: iodob

a3O'l'
ooaod 1-7-2017 doeb ddar ddd: dd$Qd:d Cdmaddd:
Eocd 1-4-2017 dOdod drieJ.>docd: d,oerle-l: joo3roedie;aAd. dcieotu dq
ei{ dddddd> eoaod 31-3-2018 dod: d.dr"d-C. dodpct erEqj ** d{fd.:
ooaod 31-3-2018
{ dJodrtradgd ddrf* Eddodo8d.

^J'J-J"1.
c^Jcrlrt l\ J ^J,JJ"i-I\
c^JcJ(JI ./

ooC d>mt"ld d:eOd da:edo' 5,250 nr? ?^o. "-nl

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^.lJcrl,
r,iJ

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" n)o. G. ioqndd 18,000
r r i-?J"q
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5,600
t t J^. .".l
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r r or{.
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r r 7 J^^o sl {o (ljicl gim\9JJJ.-. o J.
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,t \i
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d

1,97,000 1,97,000

dpdd dntsots :
a) iocleerdo$ doddd dnxd icnio d>ooo,sd; dooSoexdoS: dpdrd d>,ld
dn oa t^:**od q rb ram n&g C.

b) dodo 3 Sodd z,rJario$r €ori*rl dra. 400 dood:Qd. "a6lEd dodd e,ued sodd;rld
?DAdC>r, Sodgrl dro. 100 6zorbdd.

c) 1 -9-2017 d doddd ddC -ro dro. 700. en:+d ddC FEe drroiui{ iorocQxrdod
Oarood 1-9-2017 dddri udcu:icdd.

d) ddd:;ae-: &ood:n ddod.;o16: 17{ iouoetudrEd.

ioo3oee*icl: iodr abQ doddd erqJd$ dod>Aac:0.

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dlo.
rgE oaroOrl$b
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a
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scdnd ea
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uldd> 2,00,000
z3d xoozmoodd:
5O,O0O a3d

4,50,000
4,50,000

dpdd dnEo9 :

a) dorlCr doddd mzPodrltb :

- drD' 65,000; 2016 - dro' 62'500; 2017 -

dra' 75'000
2015

b) mdnd, errzid dd 10%

c) t3d ulrl$dldo. 2,1O,OOO aod: dodeddzie&'

Oeddddodaoaddeoddod&oj:8eErdflerrdod:bacrajesd-

i) 4 d-.urd eruffimul $oeotudod

ii) eruffi errqJd s:odao9edox'dod aarlo

e.oc>
iii) udo,uj *%{*qJ aQEd, (de. 10 dod acd: d-.,.rrrid eld.o.uSclod

dnmouo$ $n! dioe-r, dJo. 3'78)'

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10. Dmod 31-3-2018 de*Q-cd i;::eo e]" d eepd d,1d ddd d^rid.

31-3-2018 d er6ad d$d

esa a?,xJo?ist)
a
d,a" eJturlqrc
-,D
dJ6"

J- o
drD. 10 d dBear ioaaoJraad :Ji9l- "_J.E\-.
c^\lv(/d 50,000

c_oJ^J-
20, 000 ded:ri-J: 2,00,OCICI ,\iOJ/n{ )iil 2,25,000
=ed>d, QJ
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) | dCdd:
,1
12,500

6% me;i$,{do 50,000

ono\ ru:n-n:J"J.
c,er\-/ (!C^Jq, OJe \Jl l:/J
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3.82.500 3,92,50S

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E

6Jq& die-:, dJD. 4,500 sQd iFq,fiooGr.

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11. oanod 31 -3-201 B dO-af. erd" O" d oS dulddasl&doed.

qJJJ".l-
c"JcJ9{tw clrt6 (d.ra.) Csd (cJa.)

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$DCD 1,90,000

doe 30,000

1,000
-JJ \tO
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ioz^:d 6,000

A,€
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4,500
^JNGIJ

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!i^^-z?l
c^l^,)Jc,'\Jerl ll,
nor 3,250
^J9v

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a)OeO bc8d:n:rd>a 5,000

J--<
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r 5,75,000

x edoield iro ee 3,150

dzS:rrdo od asd 85,000

16,850
t'r5dd:

A
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EaCDdd il:eiur 41,000

aad8isjeaod d>oarist> 6,500

ee$dD65D{d naodd abeOd a:eier> 1,500

9,84,000 9,84,000

ipdd d,n8o9:
a) oanod 31-3-2018 dOdod eroad: rDe& dro. 1 ,00,000.

b) cl:odgedddcorid a3:eeJ 12/o, "ledoedddeorld abee3 10% ubdi dqddd abeeJ

20% iddq drior:o.

c) ddd; e{#rroo dro. 2,000 .ad. $sdrld d>eeJ de. S ddgddomdd;oe;dqri

a:edOa.

d) sm-::ienrch i::,,:g:3592" a/n a-.;perdegf GDdocr dorl20'3576%-

e) &derddd d:odeodl de. 25 ddgenu;lEodddlmdadqr apdio dnad.

io{o$ ero8ab eidddgddqdodpo$ 2013 d aaob er{o$ do$Dol.