Chapter 1 Section A 1. In India the business of underwriting is carried on by the __________. a. Industrial Development Bank of India b.
Industrial Development Corporation c. Industrial Reconstruction Bank d. None of These 2. Underwriting commission have been laid down in _________________. a. Section 76 of Companies Act 1956 b. Section 58 of Companies Act 1956 c. Section 25 of Comapnies Act 1956 d. None of These Chapter 2 Section A Section C 1. The balance sheet of Hemanth Ltd. As at 31th December 2010 is as follows: Liability Amount Assets Amount Share Capital: Fixed Assets: 500 redeemable preference 50000 Land & Building 100000 shares of Rs100 each fully Plant 30000 paid Furniture 2000 9000 equity shares of Rs.10 90000 each fully paid Current Assets: Reserve & SSurplus: Stock 30000 Security Premium 10000 Debtors 15000 General Reserve 20000 Investments 28000 Profit & Loss a/c 25000 Bank 20000 Current Liability 30000 225000 225000 The company decided to redeem its preference shares at a premium of 5 Percent on 31 January 2011. A fresh issue of 1000 equity shares of Rss.10 each was made at Rs 12 per shares, payable in full on 31 January 201. These were fully subscribed and all money were duly collected. All the investments were sold realising Rs. 27000. The directors wish that only a minimum reduction should be made in the revenue reserves. You are required to give the journal entries including those relating to cash to record the above transaction and draw up the balance sheet as it would appear after redemption of preference shares.
Chapter 3 Section C 1. A company incorporated on 1 April 2010 took over a running business from 1 January 2010. The company prepared its first final accounts on 31 December 2010. From the following information you are required to calculate the sales ratio of pre and poat incorporation period:
a. Sales from January 2010 December 2010 Rs.360000 b. Sales from the month of January twice the average sales for the month of February equal to average sales; sales for four months from May to August 1/4th of the average sales of each month and sales for October and November three times the average sales. Chapter 4 Section B 1. From the following Trial Balance of Gopinath prepare trading Profit and loss Account for the year ended December 31, 2011 and Balance sheet as on that date. Particular Debit Credit Capital 27000 Drawings 4260 Furniture 5700 Stock on January 1, 2010 8760 Purchases and sales 62172 71436 Returns 1260 1746 Salaries 2640 Rent 720 Carriages 1500 Rates and taxes 1200 Apprentice premium 750 Bank Overdraft 1200 Bad Debts 1032 Sundry Debtors 19200 Cash in hand 288 Sundry Creditors 6000 Provision for Bad debts 600 Bills Receivables 1440 Bills Payable 1080 Discount 360 110172 110172 You are required to consider the following adjustments: a. Stock on December 31, 2011 was valued at Rs.10200 b. Provide for doughtful debt at 5% on sundry debtors and for discount on creditors at 2% c. Rent due was Rs.160 d. Taxes of Rs.320 were paid in advance e. Depreciate furniture at 10% per annum f. Apprentice premium of Rs. 120 was to be carried forward g. Calculate interest on capital at 5% per annum Section C 1. Following are the closing balance in the ledger of Mahesh for the year ended June 30, 2007: Debit Amount Credit Amount Opening stock 12600 Capital 60000 Purchases 45000 Sales 100000 Sales return 500 Purchases return 1000
2400 199000 199000 Prepare trading Profit & loss account for the year ended June 30, 2007 and balance sheet as on that date after taking into account the following information: a. The stock on June 30, 2007 was valued at Rs.26800 b. The proprietor had taken away goods worth Rs. 3000 for personal use. This has not been recorded in books c. Depreciate Machinery at 20% d. Provision for Bad Debts required is Rs.1500 e. Provide for Managers commission at 10% on the net profit after charging such commission. Chapter 5 Section C 1. Rohan Ltd. And Raafi ltd decided to amalgamate themselves in to RR Ltd. The following are the summarised Balance sheets as on 31 March 2002: Liabilities Rohan Raafi Assets Rohan Raafi Share capital Investment Equity Shares 600000 400000 20000 shares 220000 of Rs.10 each in Raafi Ltd General 150000 150000 10000 shares 120000 Reserve in Rohan Trade 150000 150000 Sundry Assets 680000 480000 Creditors 900000 600000 900000 600000 The purchase price is to be determined on the basis of net assets and is discharged by the issue of equity shares of Rs.10 each RR Ltd. State the amount of purchase consideration for each of these companies and prepare the balance sheet of RR Ltd . RR Ltd issued 10000 shares to its directors for cash. Chapter 6 Section B 1. The balance sheet of Shubha Ltd. As on 31 December 2010 as follows: Liabilities Amount Assets Amount Authorised and issued Fixed assets 1430000
Wages Carriage purchases Salaries Taxes and insurances Advertisements Drawings Bills Receivables Debtors Cash in hand Buildings Furniture Machinery Printing and stationary Interest on bank loan
7500 1100 5200 1700 2800 5000 3500 52000 1500 28000 10000 15000 4400
Provision for bad debts 12% Bank Loan Sundry Creditors Discount Rent Received
2000 20000 11560 1440 3000
capital : 8000 shares of Rs.100 each 6% debentures Accured interest on the above Trade creditors Income tax due
800000 1400000 70000
Stock in Trade Debtors Investments Cash Profit & Loss Account
80000 30000 17000 103000 1070000
450000 10000 2730000 2730000 The following scheme of re oragnisation eas approved and confirmed by the court: a. Each shares shall be sub- divided into twenty fully paid equity shares of Rs5 each b. After Sub division each share holder shall surrender to the company 95% of his holding the purpose of re-issue to debenture holders and creditors so far as required and otherwise cancellation. c. Of those surrendered 46000 shares of Rs.5 each shall be converted into 8% participating preference shares of Rs.5 each fully paid d. Debenture holders total claim to be reduced to Rs. 230000, this will be satisfied by issue to them of Rs.46000 participating preference shares of Rs.5 each fully Paid. e. The liabilities for income tax is to be satisfied full f. The claim of unsecured creditors shall be reduced by 80% and the balance shall be satisfied by allotting them equity shares of Rs.5 each fully paid from the shares surrendered . g. Shares surrendered and not issued shall be cancalled Journalise the various entries to be made assuming that the tax liability is not paid. Section C: 1. The following is the balance sheet of Tumkur Engineering Company Ltd. As at 31 March 2010. Liability Amount Assets Amount Share capital: Goodwill 80000 3000 equity shares of 300000 Plant & machinery 200000 Rs 100 each fully paid Patents 40000 2000 6% cumulative 200000 Sundry Fixed assets 30000 preference shares of Investments (Mkt 200000 Rs.100 each fully paid value Rs.150000) 10% debentures 250000 Stock 100000 Add: Interest due there 50000 Sundry Debtors: on More than 6 months 25000 Sundry Creditors 350000 Others 125000 (Unsecured) Cash & Bank Balance 50000 Profit & Loss account 300000 1150000 1150000 The company feels that the worst is over and that a suitable reconstruction will enable the company to regain its lost position in the market. It is found that the plant and machinery is worth Rs.160000, patents are worth rs.30000 and Sundry fixed assets are worth Rs20000 stock of the value of Rs.25000 are obsolete and cannot be sold. Debtors outstanding for more than 6 months are irrecoverable. The decline in the market value of investments is of a permanent nature.
As the financial adviser of the company you are required to suggest an appropriate scheme of reconstruction and draw aup the balance sheet of the company after putting your scheme into effect. Case Study: 1. The capital of Datar Company Ltd was as follows: a. 4000 equity shares of Rs.100 each fully paid b. 3000 equity shares of Rs.100 eacch, Rs.80 per share paid up c. 1000 preference shares of Rs.100 each fully paid (these shares have preference as to capital) d. 1000 deferred shares of Rs.100 each, Rs80 per shares paid up (these shares under the articles are to be paid after satisfying the claims of equity sharesholders) The various creditors amounted in all to Rs.100000 including the liquidators remuneration Rs.2500. the liquidators made a call of the remaining Rs.20 on the deferred shares which was paid in full. He also realised all the assets amounting to Rs.191000. A call of Rs.15 per shares was made on the equity shares which were partly paid up. This was paid in full with the exception of that on 100 shares. Prepare the liquidators account showing the return to the shareholders.
