GURU NANAK COLLEGE (AUTONOMOUS), CHENNAI – 42.

APRIL 2024
24A584
CORPORATE ACCOUNTING
22UCOM307
MAX. MARKS : 100
TIME : 3 HRS.
SECTION - A (10 X 3 = 30 MARKS)
(Answer Any TEN Questions)
1. What is Allotment of Shares?
2. What is Underwriting?
3. Sate Calls-in-arrears.
4. What is Redemption of shares?
5. Redemption of 20,000 preference shares of Rs. 100 each was carried out by
utilization of reserves and by issue of 8,000 equity shares of Rs. 100 each at
Rs. 125. How much should be credited to capital redemption reserve A/c?
6. From the following data, mention the allocation of expenses as time ratio or
sales ratio.
General Expenses and Advertising expenses.
7. What is a Profit and Loss Statement in final accounts of companies?
8. Calculate the cost of goods sold: opening stock Rs. 1,50,000, purchases
Rs. 3,70,000, Samples Rs. 3,000, freight Rs. 26,230 and Closing Stock
Rs. 1,90,000.
9. Define Goodwill.
10. Goodwill is to be valued at 3 years purchase of 5 years average profits. Profits
2017 – 2400, 2018 – 3000, 2019 – 3400, 2020 – 3200 and 2021 – 4000.
Calculate the amount of goodwill.
11. What is Rebate on bills discounted?
12. Compute Schedule 15 from the following data: Interest on fixed deposits
Rs.1,00,000 Interest on Overdrafts Rs.50,000 Interest on saving bank accounts
Rs.1,00,000 Rent Rs.45,000.
SECTION - B (5 X 6 = 30 MARKS)
(Answer Any FIVE Questions)
13. Briefly explain the different kinds of Preference Shares.
14. On 1st April 1995, A Ltd. Issued 50,000 shares of Rs.100 each payable as follows:
Rs.20 on application
Rs.30 on allotment
Rs.25 on Ist Oct, 1995 and
Rs.25 on Ist Feb, 1996

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 By 20th May 40,000 shares were applied for and all applications were accepted.
Allotment was made on 1st June. All sums due on allotment were received on
15th July. Those on 1st call were received on 20th October. When accounts were
closed on 31st March 1996, the second and final call on 400 shares had not been
received. Journalise the transaction.
15. The following extract from the balance sheet of Gayatri company limited as on
31st December 2008 is given to you.
Share capital: Rs.
2,00,000 Equity shares of Rs. 10 each 20,00,000
3,00,000 6% redeemable preference shares of Rs.10 each 30,00,000
Capital reserve 15,00,000
General reserve 9,00,000
Profit and Loss account 25,50,000

The company exercises its option to redeem the preference shares on 1st
January 2009. The company has sufficient cash. Give journal entries to
record the redemption.
16. Ganesh Ltd., was registered on 01-07-1997 to acquire the running business of
Suneel & Co., with effect from 1-1-97. The following was the Profit and Loss
account of the company on 31-12-97.
Particulars Rs. Particulars Rs.
To Office expenses 54,000 By Gross Profit b/d 2,25,000
To Formation expenses (written off) 10,000
To Stationery & Postage 5,000
To Selling Expenses 60,000
To Directors' Fees 20,000
To Net Profit 76,000
2,25,000 2,25,000
You are required to prepare a statement showing profit earned by the
company in the pre and post incorporation periods. The total sales for the year
took place in the ration 1:2 before and after incorporation respectively.
17. Show the following items in the balance sheet of Amba Ltd. as per revised
schedule March 31, 2013:
Rs.
8% Debentures 10,00,000
Equity share capital 50,00,000
Securities premium 20,000
Preliminary expenses 40,000
Statement of Profit & Loss (cr.) 1,50,000
Discount on issue of 8% debentures 40,000
(Amount to be written in next 4 years approx.)
Loose tools 20,000
Bank balance 60,000
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 Cash in hand 38,000
18. From the following information, calculate the value of goodwill on the basis of
3 years purchase of super profit:
a. Average Capital employed in the business Rs.20,00,000
b. Rate of interest expected from capital having regard to the risk involved is
10%.
c. Net trading profits of the firm for the past three years were Rs.3,50,400
Rs.2,80,300 and Rs.3,10,100.
d. Fair remuneration to the partners for their services is Rs.48,000 per annum.
e. Sundry assets of the firm are Rs.23,50,400 and Current liabilities are
Rs.95,110.
19. On 31st March, 1998 a bank held the following bills, discounted by it earlier:
S.No. Date of bill Term of bill Discounted @ % p.a. Amount of bill
1 January 17 4 17 7,30,000
2 February 7 3 18 14,60,000
3 March 9 3 17.5 3,64,000
You are required to calculate the rebate on bills discounted. Also show the
necessary journal entry for the rebate.
SECTION - C (2 X 20 = 40 MARKS)
(Answer Any TWO Questions)
20. The balance sheet of Wallace Ltd. As on 31st Dec. 2009 was as under:
Liabilities Rs. Assets Rs.
Share Capital
1,000 Redeemable preference shares 1,00,000 Sundry Assets 3,65,000
of Rs. 100 each
2,000 equity shares of Rs.100 each 2,00,000 Bank Balance 1,40,000
fully paid
General Reserve 80,000
P&L A/c 50,000
Sundry Creditors 75,000
5,05,000 5,05,000
On this date, the preference shares were redeemed at par. Journalise and
prepare balance sheet after redemption.
21. Moon and Star Ltd., is a company with an authorized capital of Rs.5,00,000
divided into 5000 equity shares of Rs.100 each on 31.12.1985 of which 2,500
shares were fully called up. The following are the balances extracted from the
ledger as on 31.12.1985.

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 Trial Balance of Moon & Star Co. Ltd.
Debit Rs. Credit Rs.
Opening Stock 50,000 Sales 3,25,000
Purchases 2,00,000 Discount received 3,150
Wages 70,000 Profit & Loss A/c 6,220
Discount allowed 4,200 Creditors 35,200
Insurance (upto 31.3.86) 6,720 Reserves 25,000
Salaries 18,500 Loan from managing director 15,700
Rent 6,000 Share Capital 2,50,000
General Expenses 8,950
Printing 2,400
Advertisements 3,800
Bonus 10,500
Debtors 38,700
Plant 1,80,500
Furniture 17,100
Bank 34,700
Bad Debts 3,200
Calls-in-arrears 5,000
6,60,270 6,60,270
You are required to prepare Statement of Profit & Loss for the year ended
31.12.1985 and a balance sheet as on that date. The following further
information is given:
(a) Closing stock was valued at Rs. 1,91,500.
(b) Deprecation on plant at 15% and on furniture at 10% should be provided.
(c) A tax provision of Rs.8,000 is considered necessary.
(d) The directors declared an interim dividend on 15.8.85 for 6 months ending
June 30, 1985 @ 6%.
(e) Provide for corporate dividend tax @ 17%.
22. From the following information calculate the value per equity share in Yield
method:
Rs.
5000, 8% preference shares of Rs.100 each 5,00,000
75,000 equity shares of Rs.10 each, Rs.8 per share paid up 6,00,000
Expected profits per year before tax 2,80,000
Rate of tax 50%
Transfer to general reserve every year 20% of the profit
Normal rate of earnings 10%

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23. From the following information relating to Lakshmi Bank Ltd., prepare the
profit and loss account for the bank accounts for the year ended 31.12.2022.
Particulars Rs.
Rent received 72,000
Exchange and commission 32,800
Interest on fixed deposits 11,00,000
Interest on saving bank account 2,72,000
Interest on overdrafts 2,16,000
Discount on bills discounted 7,80,000
Interest on current accounts 1,68,000
Interest on cash credits 8,92,000
Depreciation on bank property 20,000
Salaries and allowances 2,18,800
Postage 5,600
Sundry charges 4,000
Director's fees 16,800
Printing 8,000
Law charges 3,600
Locker rent 1,400
Transfer fees 2,800
Interest on loans 10,36,000

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