18u3cm06 CC06

Reg. No.
18U3CM06/18U3CC06
[For the students admitted from 2018 – ’19]
SELVAMM ARTS AND SCIENCE COLLEGE (Autonomous),
NAMAKKAL – 3.
B.Com., Degree Examination, Dec.- 2020.
Semester – III
Part : III CORPORATE ACCOUNTING - I
(Common for B.Com. and B.Com. (C.A))
Time : Three Hours Max. Marks: 75

SECTION – A (10 x 1 = 10 Marks)
I). Answer All questions :
1. When shares are forfeited, the share capital A/c debited

by:
a) Paid-up Capital b) Called- up amount
c) Calls –in -arrear d) All the above
2. The rate of discount 0n shares cannot exceed:
a) 3% b) 6%
c) 5% d) 10%
3. The premium on redemption of preference shares can be

provided out of:
a) Securities premium b) Insurance fund
c) Forfeited shares A/c d) Voluntarily

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4. Transfer to capital redemption reserve can be made from:
a) Capital Reserve b) Forfeited shares A/c
c) General Reserve d) Securities premium A/c
5. Debentures are the:
a) Customer of the company
b) Creditors of the company
c) Owners of the company
d) Miscellaneous Expenditure
6. Interest on debentures is normally payable :
a) Half yearly b) Quarterly
c) Annually d) Monthly
7. Goodwill is:
a) Tangible asset b) Intangible asset
c) Fictitious asset d) None of these
8. Super profit is the difference between:
a) Capital employed and Average capital employed
b) Average profit and normal profit
c) Net assets
d) Average capital employed
9. Profit prior to incorporation belongs to:
a) The company b) The vendor
c) Both a and b d) None of these
10. Preliminary Expenses are an example of:
a) Fixed asset b) Current asset
c) Fictitious asset d) Investments
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SECTION – B (5 x 2 = 10 Marks)
II). Answer All questions :
11. Define share.
12. What is CRR?
13. What is mean by convertible debenture?
14. Define goodwill.
15. What is managerial remuneration?
SECTION – C (5 x 5 = 25 Marks)
III). Answer All questions, choosing ONE from each set :
16a) Explain its types of shares.
(OR)
16b) Kabil ltd. Purchased the business of Sibil Ltd. For
Rs. 5,00,000 payable in fully paid shares of Rs. 100
each. What entries will be made in the books of Kabil
Ltd. If such issue is:
i) At par
ii) At a premium of 20%
iii) At a discount of 10%.
17a) Explain the types of preference share.

(OR)
17b) Redemption of 20000 preference shares of Rs. 100
each was carried out by utilization of reserves and by
issue of 8000 equity shares of Rs. 100 each at
Rs. 125. How much should be credited to capital
redemption reserve account?
18a) Journalise the following transactions at the time of
issue of debentures and redemption of debenture:
i) Debenture issue at Rs. 95, repayable at Rs. 100
ii) Debenture issue at Rs. 95, repayable at Rs. 105
iii) Debenture issue at Rs. 100, repayable at Rs. 105
iv) Debenture issue at Rs. 95, repayable at Rs. 100
The face value of each debenture is Rs. 100.
(OR)
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18b) Explain sinking fund.
19a) Explain the types of goodwill.

(OR)
19b) Calculate the amount of goodwill on the basis of three
years purchase of the last five years’ profits. The
profits for the last five years are,
I year Rs. 4,800
II year Rs. 7,200
III year Rs. 10,000
IV year Rs. 3,000
V year Rs. 5,000
20a) Find out goodwill by capitalizing super profits:

i) Normal rate of return 12%
ii) Profits for the last four years are:
Rs. 30,000; Rs. 40,000; Rs. 50,000; Rs. 45,000.
iii) Non- recurring income of Rs. 3,000 is included in
the
iv) above mentioned profit of Rs. 30,000
v) Average capital employed is Rs. 3,00,000.
(OR)
20b) From the following data, calculate profit prior to
incorporation:
Time Ratio: 1:2
Sales Ratio: 1:3
Gross profit Rs. 1, 70,500
Administrative expenses Rs. 69,600
Expenses relating to sales Rs. 18,600
Preliminary expenses Rs. 11,560.
-4-
SECTION – D (3 x 10 = 30 Marks)
IV). Answer any THREE questions :
21. A limited company issued 10,000 shares of Rs. 10 each at

a premium of 10% payable as follows:
Rs. 3 on application
Rs. 4 on allotment (including premium)
Rs. 4 on first and final call.
The company received 12,000 applications from the
public. Applications for 1,000 shares were rejected and
the excess application money received on the remaining
shares was adjusted towards allotment.
All the amounts due on the shares were received
except the first and final call money on 500 shares which
were forfeited after the due notice. All the forfeited shares
were reissued at Rs. 8 per share. Pass necessary journal
entries.
22. The following extract from the balance sheet of vijay ltd.
as on 31st dec 1997 is given to you and you are asked to
give journal entries:
Share capital:
2,00,000 equity shares of Rs. 10 each Rs. 20,00,000
2,00,000 8% Redeemable pref. share capital of Rs. 10
each Rs. 20,00,000
Capital Reserve Rs. 10,00,000
General Reserve Rs. 6,00,000
Profit and loss account Rs. 17,00,000
The exercises its option to redeem the preference shares
on 1st jan. 1998.
-5-
23. Explain the types of debenture.
24. The following is the balance sheet of Mr.chandran as on

30th September 1998:
Amount Assets Amount

Liabilities (Rs.) (Rs.)
Capital 1,64,000 Land and 36,000
General reserve 40,000 Buildings 54,000
Creditors 38,040 Plant 30,000
Investment 26,850
Stock 75,990
Bank 19,200
Debtors
2,42,040 2,42,040
The following were the net profits for the years ended:
30th September 1996 Rs. 32,280
The above amounts include income from investments
Rs.1,800 each year.
You are required to value the Goodwill of the above
business at 2 years’ purchase of the average super profit
for three years, taking into account the fact that the
standard rate of return on capital employed in such type
of business is 10% assume that each years’ profit is
immediately withdrawn in full by Mr.chandran.
-6-
25. Following is the list of balances of Lakshmi Ltd. as on
31.03.2000.
Particulars Amount
(Rs.)
Gross profit 87,050,
Furniture 17,000
Rent 4,000
Profit and loss account (Cr.) as on 31.3.1999 15,000
Share capital 1,00,000
Creditors 17,500
Bank balance 46,200
Bills receivable 9,800
Discount (Cr.) 3,000
Salaries 7,500
Sundry exp. 7,050
Dividend paid (for 1998-1999) 9,000
Debtors 27,500
Plant 29,000
General reserve 15,500
Bills payable 7,000
Prepare profit and loss and profit and loss Appropriation

account for the year ending 31.3.2000 after providing for:
i) Depreciation at 20% on fixed assets
ii) Provision for doubtful debts at 5%
iii) Provide for 15% dividend.
***********
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Reg. No.

Time : Three Hours Max. Marks: 75

1. When shares are forfeited, the share capital A/c debited

a) Paid-up Capital b) Called- up amount

c) Calls –in -arrear d) All the above

2. The rate of discount 0n shares cannot exceed:

3. The premium on redemption of preference shares can be

a) Securities premium b) Insurance fund

c) Forfeited shares A/c d) Voluntarily

17a) Explain the types of preference share.

19a) Explain the types of goodwill.

20a) Find out goodwill by capitalizing super profits:

IV). Answer any THREE questions :

21. A limited company issued 10,000 shares of Rs. 10 each at

24. The following is the balance sheet of Mr.chandran as on

Amount Assets Amount

Prepare profit and loss and profit and loss Appropriation

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