AD-881

B.Com. (Part-II) Semester–IV Examination

CORPORATE ACCOUNTING
Time : 3 Hours] [Maximum Marks : 80
Note : (1) There are three Sections A, B & C.

1 3(2) Section A – 20 Marks.

4 Section B – 20 Marks.
Section C – 40 Marks.
SECTION—A

3
41
Choose an appropriate option :
(1) Banking Regulation Act was enforced on :
(A) 16 March 1949 (B) 1 April 1935
(C) 16 March 1951 (D) 26 Nov 1955
(2) Every Bank shall transfer at least ______ of current year profit to reserve fund.
(A) 25% (B) 30%
(C) 28% (D) 50%

1 3
(3) Books of Account of the bank should be checked by :
(A) Chartered Account 4 (B) Certified Auditor
(C) Bank Manager (D) Governor
(4) Form "B" is related to ______.
(A) Trading Account (B) Profit & Loss A/c
(C) Profit & Loss App A/c (D) Realization A/c
(5) General Insurance Corporation was nationalised in the year :
(A) 1956 (B) 1972
(C) 1948 (D) 1964
(6) In 1978 ______ Insurance Corporation was established.
(A) Deposit Insurance Corporation (B) Life Insurance Corporation
(C) Fire Insurance Corporation (D) Independent Life Corporation
(7) To protect against fire loss policy is to be taken by the insured :
(A) Marine Insurance (B) Accident Insurance

13 3
(C) Fire Insurance (D) General Insurance

4
(8) Full form of L.I.C. : 4 1
(A) Life Insurance Corporation (B) Legal Insurance Corporation
(C) Life Insurance Company (D) Life Investment Company

LT–1075 1 (Contd.)
(9) ______ is the process through which the legal existence of the company comes to an end.
(A) Incorporation (B) Liquidation
(C) Dissolution (D) Amalgamation
(10) The petition for compulsory winding up can be presented by the following persons :
(A) The Company (B) The Creditors
(C) Any Contributory (D) All of the above

3
(11) The person appointed for conducting the Liquidation proceeding of the company is called _____.
1
4
(A) Auditor (B) Liquidator
(C) Accountant (D) Broker
(12) The statement prepared by the Liquidator is ______.

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41
(A) Winding up (B) Liquidator's Statement of Account
(C) Final Account (D) Affair Account
(13) Goodwill is defined as :
(A) Intangible Asset (B) Fictitious Asset
(C) Current Asset (D) Liquid Asset
(14) Which of the following methods are used for the valuation of Goodwill ?
(A) Super Profit (B) Average Profit
(C) Weighted Profit 3
(D) All of the above
1
4
(15) The formula for calculating Goodwill under the simple average profit method :
(A) Super Profit × Annuity Rate (B) Average Profit + Purching Year
(C) Average Profit × Purching Year (D) Average Profit–Super Profit
(16) The Amount that is treated as Goodwill by firm is paid for obtaining ______.
(A) Present Benefit (B) Future Benefit
(C) Past Benefit (D) Both (A) and (B)
(17) Under Net Assets method, value of a share depends on ______.
(A) Net assets available to debenture holders
(B) Net assets available to shareholders
(C) Net assets available to creditors
(D) None of the above
(18) Net Asset Value is also called as ______.
(A) Asset Backing Value (B) Intrinsic Value

13 3
(C) Liquidation Value (D) All of the above

4
(19) Fair value of share is equal to ______.
4 1
(A) Intrinsic Value (B) Yield Value
(C) Average of (A) & (B) (D) None of the above

LT–1075 2 (Contd.)
(20) ______ value depends on Net Assets.
(A) Yield Value (B) Fair Value
(C) Intrinsic Value (D) None 1×20=20

SECTION—B
Section B of short questions respectively one each from respective unit having internal
choice from the same unit. Show necessary working notes whenever necessary.

1 3
1.
4
Prepare Profit and Loss Account for the year ended 31st March 2022 with schedule :

Particulars Amount (Rs.)

3
Interest Earned 9,760

41
Interest Expended 3,735
Operating Expenses 2,778
Operating Income 2,590 4

OR
Calculating operating expenses :

Particulars Amount (Rs.)

1 3
Rent & Taxes 4
2,300
Printing & Stationery 1,000
Directors Fee 4,000
Interest on Deposits 2,000
Auditor’s Fee 1,500 4

2. Prepare Marine Insurance Revenue A/c :

Particulars Amount (Rs.)

Claims paid 1,30,000
Outstanding Claims P.Y. 20,000
Outstanding Claims C.Y. 50,000
Agent Commission 13,000
Management Exp. 20,000

13 3
Insurance Premium Received 4,00,000

4
Reserve for Unexpired Risk 3,00,000
4 1 4

OR

LT–1075 3 (Contd.)
 Prepare Fire Insurance Revenue A/c

Particulars Amount (Rs.)

Claims paid 40,000
Claims Outstanding (1st Apr 2021) 3,000
Claims Outstanding (31st Mar 2022) 1,500
Reserve for Unexpired Risk 2,00,000

1 3
4
Management Exp.
Commission
2,000
800
Insurance Premium Received 70,000

3
Reserve for Unexpired Risk 50% 4

41
3. Amount paid to unsecured creditors Rs.8,00,000.
Amount Balance to Liquidator Rs.7,50,000.
Remuneration of Liquidator 5% of payment of unsecured creditors. 4
OR
Explain with imaginary figures the Liquidator’s Statement of Account. 4
4.
1 3
Give short note on method of Valuation of Goodwill. 4
4
OR
The following information is given :

Profit (Rs.)
Profit I year 20,000
Profit II year 25,000
Loss III year 5,000
Profit IV year 10,000
Calculate Goodwill by Average
Profit Method.
Purchasing year 1.5 times
Average Profit. 4

5.
3 3
If value of share by Net Asset method is Rs. 40 and yield method is Rs. 42. Find out value of share
1 1
4
by fair value method.
OR
4 4

Explain the method of valuation of shares. 4

LT–1075 4 (Contd.)
 SECTION—C
Section C comprises long questions respectively, one each from respective unit having
internal choice from the same unit.

Show necessary working notes wherever necessary.

1. From the following balance of Dhanvikas Bank Ltd. 31st March 2022. Prepare Balance Sheet as on
that date.
1 3
4 Particulars Amount (Rs.)

Capital 4,00,000

3
Reserves and Surplus 4,14,000

41
Cash and balance with RBI 14,64,000
Balance with Bank 13,00,000
Investment 4,80,000
Deposits 39,50,000
Borrowing 8,00,000
Advances 17,54,000

1 3
Fixed Assets
Other Liabilities
4
11,08,000
5,42,000 8

OR

From the following balances of Dena Bank Ltd., prepare Profit & Loss Account for the
year ended 31st Mar 2022.

Particular Amount (Rs.)

Interest and discount 8,40,000
Commission and Exchange 4,00,000
Less Rebate on Bill 22,000
Interest Paid 6,00,000
Staff Salary 4,00,000

13 3
Rent & Tax 58,000

4
Printing and Stationery 40,000 4 1 8

LT–1075 5 (Contd.)
2. Explain the types of Insurance Business. 8

OR

In the Borks of Aayush Fire Insurance Co. Ltd. the following balances appeared on
31st March 2022.
Draw up the company's Fire Insurance Revenue Account for the year ended on 31st March 2022.

1 3
Particulars Rs.
4
Reserve for Unexpired Risk (31.03.2022) 4,00,000

Additional Reserve for Unexpired Risk (31.03.2021) 80,000

3
41
Outstanding Claims (31.03.2022) 6,300

Outstanding Claims (31.03.2021) 1,200

Claims paid less Reinsurance 1,53,000

Law charges 40,500

Commission on Direct Agent Business 1,95,200

Commission on Reinsurance Ceded 3,41,200

1 3
Commission on Reinsurance accepted
4 1,86,500

Premium less Reinsurance 10,00,000

Depreciation 7,000

Salaries 1,36,000

Miscellaneous Exp. 87,400

Audit Fee 55,000

Postage 11,500

Printing and Stationery 49,600

Rent 62,500

Provident Fund Contribution 11,200

You are required to provide 50% of the net premium for the unexpired risk and 10% of the net

1 3
premium as additional reserve for the same as on 31 March 2022.
1 3 8

4 4

LT–1075 6 (Contd.)
3. Simrela Company went into liquidation on 1st April 2021. Prepare Liquidator's Final Statement of
Account.

Rs.
Secured Creditors 1,20,000
Preferential Creditors 40,000
Unsecured Creditors 2,00,000

1 3
Liquidation Exp. 5,000
4
Realization of Asset 2,50,000
Cash 25,000

3
Received from shareholder 10,000

41
Remuneration of 3% on realized Asset and 2% on the amount distributed to unsecured creditors.
8

OR

Rajesh Company went into Liquidation on 1st April 2021. Prepare Liquidation Final Statement of
Account.
Liquidator’s Remuneration :
(i) 2% on assets realized
1 3
(ii) 2% on amount paid to shareholders
4
Rs.
Asset Realized 5,00,000
Liquidation Exp. 50,000
Share Holder 4,00,000
Debenture Holder 1,00,000
Unsecured Creditors 1,00,000 8

4. From the following information calculate value of Goodwill by :

(A) Two year purchase of Average Profit.

(B) Three year purchase of Super Profit.
(i) Average capital employed 9,00,000
(ii) Net Trading Profits of the firm for the past three years were Rs.1,50,000, Rs.1,70,000,

1 3 Rs.1,80,000
1 3
4
(iii) Normal Rate of Return 10% 4 8
OR

LT–1075 7 (Contd.)
 Calculate the value of Goodwill

(1) Net Profit for last five years Rs.40,000, Rs.42,000, Rs.45,000, Rs.46,000, Rs.47,000.
(2) Capital employed Rs.4,00,000
(3) Normal Rate of Return 8%
(4) Goodwill is to be valued at 4 year purchase of super profit. 8
5.
1 3
Calculate value of shares by Intrinsic Value method.
4
Land and Building 55,000
Plant 40,000

3
41
Trade Mark 5,000
Bank Balance 10,000
Creditors 15,000
No. of equity shares 2,000
Goodwill 18,000 8

OR

1 3
What is shares ? Explain the characteristics of shares. 8
4

1 3 1 3
4 4

LT–1075 8 25