Q4/1B/04-15 Reg. No

St. Joseph’s College of Arts & Science (Autonomous) St. Joseph’s College Road, Cuddalore – 607001 CM408 – CORPORATE ACCOUNTING

Time : 3 hrs

Max Marks :75 SECTION – A (10X2=20) Answer ALL Questions

1. What do you understand by ‘Average profit’? 2. Write a short note on: Goodwill valuation. 3. Explain the term: Amalgamation. 4. What do you understand by ‘Purchase consideration’? 5. Write a short note on: Voluntary winding up. 6. Who are preferential creditors? 7. Give the meaning of the term: Subsidiary company. 8. Explain the term: Minority interest. 9. Explain the term: Nonperforming Assets. 10. What is meant by ‘Statutory reserve’? SECTION – B (5X5=25) Answer any FIVE Questions 11. The issued share capital of a company was Rs.10,00,000 consisting of 10,000 equity shares of Rs.100 each. The net profits for the last five years were: Rs.1,00,000; Rs.80,000; Rs.1,20,000; Rs.1,60,000 and Rs.1,40,000 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. 12. Ram Ltd., agrees to purchase the business of Krish Ltd., on the following terms: i)For each of the 10,000 shares of Rs.10 each in Krish Ltd., 2 shares in Ram Ltd., of Rs.10 each will be issued at an agreed value of Rs.12 per share. In addition, Rs.4 per share cash also will be paid. ii)8% Debentures worth Rs.80,000 will be issued to settle the Rs.60,000 9%Debentures in Krish Ltd., iii)Rs.10,000 will be paid towards expenses of winding up. Calculate the purchase consideration.

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Q4/1B/04-15 13. A Liquidator is entitled to receive remuneration @2% of the assets realised and 3% on the amounts distributed among the unsecured creditors. The assets realised Rs.70,00,000 against which payment was made as follows: Liquidation expenses- Rs.50,000; Preferential creditorsRs.1,50,000 and Secured creditors Rs.40,00,000; Unsecured creditors- Rs.30,00,000. Calculate the total remuneration payable to the liquidator. 14. On 30.06.2013 2/3rd of the shares of S Ltd [with a capital of Rs.12,00,000] were acquired by H Ltd., The Balance sheet of ‘S’ Ltd showed a debit balance of Rs.6,00,000 on 1.1.2013 and a credit balance of Rs.3,60,000 on 3.12.2013. The investment made by ‘H’ Ltd in ‘S’ Ltd’s shares is Rs.9,00,000. Calculate the cost of control or capital reserve. 15. On 31st March 2013, Bharat Commercial Bank Ltd., finds its advances classified as follows: Standard assets Rs.14,91,300 Sub-standard assets Rs.92,800 Doubtful assets (secured): doubtful for one year Rs.25,600 : doubtful for one year to 3 years Rs.15,640 : doubtful for more than 3 years Rs.6,580 Loss assets Rs.10,350 Calculate the amount of provision to be made by the bank against the mentioned advances. 16. Enumerate various methods of calculation of goodwill. 17. Explain the various Schedules to be prepared by a Commercial bank. SECTION –C (3X10=30) Answer any THREE Questions 18. The Balance sheet of a partnership firm is as follows: Liabilities Rs. Assets Rs. Capital: X 1,20,000 Goodwill 68,000 Y 1,20,000 2,40,000 Buildings 1,46,000 Sundry Creditors 1,20,000 Stock 90,000 Bills Payable 40,000 Debtors 58,000 Cash and Bank 38,000 4,00,000 4,00,000 JJ Co Ltd is to be formed to take over this firm. For this purpose, assets revalued as under: Stock- Rs.94,000; Debtors- Rs.40,000;Buildings- Rs.1,28,000. Profits of the firm for the past five years before charging in respect of the partners were Rs.40,000; Rs.60,000; Rs.72,000; Rs.64,000; Rs.74,000.Included in these profits were nonrecurring items averaging Rs.3,000, but from the nature of the business casual non-recurring items were found to arise every year and the promoters agreed that Rs.2,400 should be allowed as profit from this source. Similar businesses paid a dividend of 8% per annum on their equity shares and the partners who would be the directors of the company were to be paid remuneration X- Rs.18,000 and Y- Rs.12,000 p.a. Calculate goodwill on five years purchase of super profits. 19. Explain the various methods of calculating purchase consideration.

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Q4/1B/04-15 20. From the data relating to a company (in voluntary liquidation), you are asked to prepare liquidator’s final statement of account. (i).Cash with liquidator (after all assets are realised and secured creditors and debenture holders are paid) is Rs.6,73,800.(ii).Preferential creditors to be paid Rs.30,000.(iii). Other unsecured creditors Rs.2,15,000. (iv). 4,000 6% preference shares of Rs.100 each, fully paid.(v).2,000 equity shares of Rs.100 each, Rs.75 per share paid up.(vi).6,000 equity shares of Rs.100 each, Rs.60per share paid up. (vii).Liquidator’s remuneration 2% on preferential and other unsecured creditors. (viii).Preference dividends were in arrears for 2 years. 21. On 31st March, 2012 the balance sheets of H Ltd., and its subsidiary S Ltd., stood as follows: Liability H Ltd Rs. S Ltd Assets H Ltd Rs. S Ltd Rs. Rs. Eq.Sh.capital 8,00,000 2,00,000 Fixed assets 5,50,000 1,00,000 Gen. reserve 1,50,000 70,000 75% Shares in P&L a/c 90,000 55,000 S Ltd (at cost) 2,80,000 Creditors 1,20,000 80,000 Stock 1,05,000 1,77,000 Other Cur. 2,25,000 1,28,000 Assets 11,60,000 4,05,000 11,60,000 4,05,000 Draw a consolidated Balance sheet as at 31st March, 2012 after taking into consideration the following information: (i). H Ltd acquired the shares on 31st July,2011.(ii).S Ltd earned profit of Rs.45,000 for the year ended 31st March,2012. (iii).In January 2012 S Ltd sold to H Ltd goods costing Rs.15,000 for Rs.20,000. On 31st March, 2012 half of these goods were lying as unsold in the godown of H Ltd. Give your working notes. 22. Some of the items in the trial balance of Modern Bank Limited as on December 31, 2012 were as follows : Particulars Loans and advances

Rs. Particulars 71,50,000 Printing and stationary

Rs. 4,500

Current a/c - including overdraft of `15,00,000 Bills discounted and purchased

66,00,000 Int. on savings bank deposits 75,0000 19,20,000 Auditor’s fees

5,000

Interests on fixed deposits

1,55,000 Director’s fees

2,500

Interest on loans

2,25,000 Interest on overdrafts

Discount (subject to unexpired discounts `30,000) Interest on cash credits Commission earned Loss on sale of investments

2,01,0000 Provision for bad debts, January 1,2012 1,05,000 Bad debts 46,500 Provision for income tax January 1,2012 34,000 Income tax paid for 2012

95,000 42,000 21,000 66,000 54,000

Salaries and allowances 82,000 You are required to prepare profit and loss account of the bank, maintaining the provision for income tax at Rs.84,000 and provision for bad debts at Rs.52,000 for the year ended December 31, 2012. All workings should part of your answer. ************

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