QP CODE: 23104248 23104248 Reg No : .....................
Name : .....................
B.COM DEGREE (CBCS) REGULAR / IMPROVEMENT / REAPPEARANCE
EXAMINATIONS, JANUARY 2023
Third Semester
Core Course - CO3CRT07 - CORPORATE ACCOUNTING I
(Common to all B.Com Degree Programmes)
For Regular Candidates : 2017 Admission Onwards
For Private Candidates : 2021 Admission Only
38079546
Time: 3 Hours Max. Marks : 80
Instructions to Private candidates only: This question paper contains two sections. Answer SECTION I
questions in the answer-book provided. SECTION II, Internal examination questions must be answered in the
question paper itself. Follow the detailed instructions given under SECTION II
SECTION I
Part A
Answer any ten questions.
Each question carries 2 marks.
1. Journalise issue of shares against the formation expenses to promoters.
2. What is the purpose for which Capital Redemption Reserve can be utilised?
3. What is ESOP?
4. What are the terms of an underwriting agreement?
5. What are extraordinary items? Give two examples.
6. What is sales ratio? Illustrate with an example.
7. What are free reserves?
8. How will you treat TDS in final accounts?
9. How will you value current investments?
10. How do you deal with profit on sale of investments?
11. Give journal entry of claim admitted on loss of fixed asset policy.
12. How will you find out basic gross profit rate for loss of profit policy?
(10×2=20)
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Part B
Answer any six questions.
Each question carries 5 marks.
13. Distinguish between Capital Reserve and Reserve Capital.
14. What are the sources available for fully paid and partly paid bonus shares?
15. What are the merits and demerits of Buy back?
16. K Ltd issued 100000 equity shares of Rs.10 each at par. The entire issue was
underwritten by A, B and C each by 60000, 30000 and 10000 shares respectively. A, B
and C also applied 8000, 10000, and 2000 shares firm, respectively. The company
received 80000 shares comprising of marked applications of A- 20000 shares, B - 14000
shares and C - 6000 shares. Prepare a statement of underwriters' liability and commission
payable assuming 2.5 % as rate of commission.
17. For the year ended 31st March 2017, provision for income tax has been made for `
50,00,000. Advance payment of tax for that year amounted to ` 45,00,000 and TDS on
income earned by the company amounted to ` 46,000. On November 15, 2017, the
assessment was completed and tax liability was determined at ` 58,40,000. Advance
payment of tax for the year ending 31-03-2018 was ` 62,00,000.
Show the necessary accounts for the year ending 31-03-2018, assuming ` 70,00,000
provision for taxation for the year ending 31-03-2018.
18. A firm was carrying on business from 01.01.2017 get itself incorporated as a company on
01.05.2017. The first accounts are drawn upto 30.09.2017. The following information is
available with you.
a) Gross profit for the period ` 56,000
b) The general expenses are ` 14,220; directors fees ` 12,000 p.a, formation expenses `
1,500; Rent upto 30.06.2017 is ` 1,200 p.a., after which it is increased to ` 3,000 per
annum.
c) Salary of the manager, who upon incorporation of the company was made a director,
is ` 6,000 p.a. His remuneration thereafter is included in the above figure of fees to
directors.
d) The net sales are ` 8,20,000, the monthly average of which for first four months of
2017 is one half of that of the remaining period, the company earned a uniform profit.
e) Ignore interest and tax.
Prepare a Statement showing pre and post-incorporation profits
19. Explain the legal provisions regarding payment of manageral remuneration u/s 197.
20. On 01.04.2017 Anuradha Ltd had current investment of Rs 3,00,000 6% government
stock at Rs 94 (face value being Rs 100). Interest payable half yearly on 31st March and
30th September. The company sold Rs 90,000 of the stock at Rs 95 ex-interest on
01.06.2017. Draw up 6% Government stock account in the investment ledger of the
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company for the year ended 31.03.2018. Ignore brokerage and income tax. The stock was
quoted at Rs 96 ex-interest at the stock exchange on that date.
21. Explain the accounting treatment of loss of stock policy.
(6×5=30)
Part C
Answer any two questions.
Each question carries 15 marks.
22. Bajaj Ltd. issued 20,000 equity shares of Rs 10 each at a premium of Rs 2 payable as
follows:
On application – Rs 5
On allotment – Rs 5 (including premium)
On first & final call – Rs 2
Applications were received for 24,000 shares. Letters of regret were sent to 4,000 shares
and shares were fully allotted to all other applicants.
Mr. X, the holder of 150 shares failed to pay the allotment and call moneys. His shares
were forfeited and reissued at Rs 9 per share. Give journal entries.
23. From the following trial balance and additional information provided, prepare final
accounts of Superior Trading Co. Ltd. for the year ending 31-03-2018.
Particulars Dr (Rs) Cr (Rs)
Capital 60,000 equity shares of ` 10 each fully paid 6,00,000
Stock (01.04.2017) 4,50,000
Purchases and Sales 14,70,000 21,00,000
Productive wages 3,00,000
Discount 42,000 30,000
Salaries 45,000
Rent 29,700
General expenses 1,02,300
Surplus A/c (01.04.2017) 70,000
Dividend paid for last year 54,000
Debtors and Creditors 2,25,000 1,05,000
Plant and Machinery 1,74,000
Cash at bank 97,200
Reserve 1,13,000
Loan to Managing Director 19,500
Bad debts 9,300
30,18,000 30,18,000
Additional information:
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a) Stock on 31-03-2018 is Rs 4,92,000
b) Depreciate machinery @ 10% pa.
c) Reserve 5% on debtors for doubtful debts
d) Provide 2% for discount on creditors
e) One month rent Rs 2,700 was due on 31-03-2018
f) Six months insurance was unexpired at Rs. 4,500 per annum
g) Provide Rs. 27,336 for income tax
h) The Board recommends a dividend @ 5% p.a.
i) Make provision for CDT at the applicable rate
j) Transfer to general reserve 5% of net profit
24. Tandon carried out the following transactions in the shares of Bright Ltd.
a) On 01.04.2017, he purchased 20,000 equity shares of Rs 1 each fully paid
for Rs 30,000.
b) On 15.05.2017, Tandon sold 4,000 shares for Rs 7,600.
c) At a meeting on 15.06.2017, the company decided:
i) To make a bonus issue of one fully paid share for every four shares held on
01.06.2017; and
ii) To give its members, the right to apply for one share for every five shares
held on 01.06.2017 at a price of Rs 1.50/share of which 75 paise is
payable on or before 15th July, 2017 and the balance 75 paise per share, on or before
15th September, 2017.
The shares issued under (i) and (ii) were not to rank for dividend for the year ending
31.12.2017.
d) Tandon received his bonus shares and took up 2,000 shares under the rights
issue, paying the sums thereon when due and selling the rights to the
remaining shares at 40 paise/share; the proceeds were received on 30.09.2017.
e) On 15.03.2018, he received a dividend from Birght Ltd. of 15% in respect of the
year ended 31.12.2017.
f) On 30.03.2018 he received Rs14,000 for the sale of 10,000 shares.
Prepare Tandon’s investment account. Apply Average Cost basis. Expenses and tax to
be ignored.
25. From the following details, calculate Consequential Loss Claim.
1. Date of Fire: 1st September
2. Indemnity Period: 6 months
3. Period of Disruption: 1st September to 1st February
4. Sum Insured: ` 1,08,900.
5. Sales were ` 6,00,000 for the preceding financial year ended on 31st March.
6. Net Profit for preceding Financial Year ` 36,000 plus Insured Standing Charges `
72,000
7. Rate of Gross Profit 18%.
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8. Uninsured Standing Charges ` 6,000.
9. Turnover during the Disruption Period ` 67,500.
10. Annual Turnover for 12 months immediately preceding the date of fire ` 6,60,000
11. Standard Turnover, i.e. for corresponding months (1st Sep to 1st Feb) in the year
preceding the date of fire 2,25,000
13. Reduced Turnover avoided through increase in Working Capital 30,000
12. Increase in Cost of Working Capital 12,000 with saving of Insured Standing Charges
4,500 during Disruption Perio
14. Special Clause stipulated (a) Increase in rate of GP 2%, and (b) Increase in Tumover
(Standard and Annual) 10%.
(2×15=30)
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