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B.COM DEGREE (CBCS) IMPROVEMENT / REAPPEARANCE EXAMINATIONS,

MAY 2022
Fourth Semester
Core Course - CO4CRT11 - CORPORATE ACCOUNTING II
(Common for B.Com Model II Computer Applications ,B.Com Model II Finance & Taxation,B.Com
Model II Marketing,B.Com Model II Travel & Tourism,B.Com Model III Office Management &
Secretarial Practice ,B.Com Model III Taxation ,B.Com Model III Computer Applications ,B.Com
Model I Co-operation ,B.Com Model I Marketing ,B.Com Model I Finance & Taxation ,B.Com Model
I Travel & Tourism ,B.Com Model II Logistics Management )
2017 Admission Onwards
BEA3628C
Time: 3 Hours Max. Marks : 80
Part A
Answer any ten questions.
Each question carries 2 marks.
 

1.   What is double insurance?

2.   What is commission on reinsurance accepted?

3.   Define Banking.

4.   Explain the briefly the treatment of baddebt and provision for doubtful debt in final
accounts of banking company.

5.   State the various  ways in which  internal reconstruction  can be carried out.

6.   What is consolidation of share capital?

7.   On the date of capital reduction , a company finds that  its building  has appreciated by
Rs.  50,000 and the  value of stock  has   gone up by Rs.  40,000 Journalise

8.   Explain breifly 'AS -14'.

9.   Explain the term ' Taking over the Business'.

10.   Explain any two differences of Absorption and External Reconstruction.

11.   Who is a Liquidator?

12.   What is Fraudulent Preference?

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 (10×2=20)
Part B
Answer any six questions.
Each question carries 5 marks.
 

13.   What are the type of registers and books maintained by life insurance companies?

14.   Revenue account of  a life insurance company discloses a surplus of Rs.10,00,000 on 31.03.2019
before taking the following:

i. A claim of Rs.10,000 was intimated and admitted but not paid during the year
ii. A claim of Rs.6,000 outstanding in the books for 8 years is written back
iii. Interest on securities accrued Rs.800
iv. Rent of the building occupied Rs.2,000
v. Premium of Rs.600 is payable under reinsurance
vi. Reinsurance recoveries Rs.26,000
vii. Bonus in reduction of premium Rs.10,000
viii. Agent’s commission to be paid Rs.8,000

Pass the necessary journal entries for the above omissions and recomputed the correct surplus for
the year

15.   Explain the classification of advances for determining provision for bad debts?

16.   Chandru Ltd. Resorted to  internal  reconstruction.  The scheme is as under

            a).80,000 equity shares of Rs. 10 each  fully paid  to be converted  into 40,000
equity shares of Rs. 5 each fully paid

            b).4,000 12 % preference shares of Rs. 100 each  fully paid to be converted into
40,000 equity shares of Rs. 5 each  fully paid

            c).600 15% debentures of Rs. 1000 each  to be discharged by the issue of 80,000
equity shares  of Rs. 5 each  fully paid .

            d)The amount so available be appropriated  to write off the following : P&L
account debit balance Rs. 4,00,000, goodwill Rs. 2,00,000, plant and machinery Rs.
1,50,000. Pass necessary journal entries.

17.   White  ltd.  has an equity  share capital  of Rs. 50,00,000  consisting of 50,000  shares of 
Rs. 100 each . It is resolved  and sanction of the court  has been  obtained .

            1)T o subdivide the shares into  fully paid equity shares   of  Rs. 10 each.

            2) 80 % of the shares to be surrendered  to the company .

            3)  2,00,000  of surrendered shares to be issued  to 15% debentures of                 
                  Rs.25,00,000 in full settlement of their claim  .

            4) 1,00,000 of the surrendered shares  to be issued  as fully paid  to creditors of   
                  Rs.12,50,000.

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             5)The  balance  of the surrendered shares  to be cancelled .

            6)To write off debit balance of  in P&L account  Rs. 30,20,000, goodwill  Rs.           
              13,80,000,preliminary expenses Rs. 1,50,000 and balance to be                           
             transferred to  capital reserve.

 Give Journal entries to implement the scheme

18.   Given below the extracts of the Balance Sheet of CRl Ltd. as at 31.03.2018.
Amount
Particulars
(Rs )
Equity Share Capital of Rs
60,000
10 each
10% Preference Share
8,000
Capital
15% Debentures 8,000
Trade payables 9,000
Reserves and Surplus 28,000
Assets 48,000
Intangible Assets 25,000
Inventory 15,000
Receivables 6,000
Cash Equivalents 19,000

Haj Ltd. agrees to take over CRI Ltd. Calculate Purchase consideration on the basis of
the information such as Good will is revalued at Rs 12,000, Assets are valued at Rs
55,000/- Inventories revalued at Rs 11,000/- and the receivables at book value. Haj Ltd.
does not take over the cash balances but to agree to assume the liability of Trade
payables at Rs 6,000/

19.   The following are the information taken from the Balance sheet of J Ltd. as on 31st March
2018. You have to pass necessary journal entries to close the books of Accounts. Then
Prepare realization Account also.
Share capital 300000
Debentures 150000
General Reserve 50000
Creditors 30000
Good will 50000
Assets 350000
Preliminary Expenses 15000

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 Bank 115000

20.   Pass the journal entries for the assets and liabilities taken over by the new company,
liquidation expenses met by Transferee Company, Preliminary expenses of the new
company and purchase consideration due in the books of new company.

21.   Distinguish between Member's and Creditor's voluntary winding up.

(6×5=30)
Part C
Answer any two questions.
Each question carries 15 marks.
 

22.   The following is the trial balance of New India Insurance company as on 31.03.2019:

                                                                                       Dr.                               Cr. 

Paid up capital: 10,000 shares of Rs.10 each                                                  1,00,000

Life Fund balance on 01.04.2018                                                                   29,72,300       

Dividend paid                                                             15,000

Bonus in reduction of premium                                  31,500

Claims less reinsurance                                               1,97,000

Commission                                                                9,300

Management expenses                                                32,300

Mortgages in India                                                      4,92,200

Agents balance                                                            9,300

Freehold premises                                                       40,000

Investments                                                                 23,05,000

Loans on policies                                                        1,73,600

Cash in hand and at bank                                           27,000

Cash on current account                                             7,300

Premium less reinsurance                                                                                1,61,500

Outstanding claim on 01.04.2018                                                                   7,000

Interest, dividend and rent                                                                             1,12,700

Consideration for annuity granted                                                                  10,000

Surrenders                                                                   7,000  

Preliminary expense                                                    7,000

Annuities less reinsurance                                           10,000                                                

                                                                                    33,63,500                    33,63,500       

                       

You are required to prepare the revenue account and profit and loss account of the insurance company as on
31.03.2019 and its Balance sheet as on that date after taking the following matters into consideration:

a. Claims outstanding Rs.10,000

b. Further bonus in reduction of premium Rs.5,000

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 c. Premium outstanding Rs.5,000
d. Claims covered under reinsurance Rs.80,000
e. Management expenses due Rs.5,000
f. Commission on reinsurance premium Rs.5,000
g. General administrative expense outstanding Rs.8,000
h. Transfer to fund for future appropriation Rs.9,000
a. Directors propose a final dividend of 10% of paid up capital

23.   Give the model form of the balance sheet of a banking company with suitable
schedules(use imaginary figures).

24.   The Balance Sheet of  Devin Ltd. as on 31st December 2018 was as follows.

 
Liabilities Amount Assets Amount
Share capital ( 10 each ) 200000 Land & Building 125000
6% Debentures 60000 Machineries 77000
Creditors 8000 Furniture 9800
    Stock 31200
    Debtors 14500
    Profit and Loss A/C 10500
       
  268000   268000

It was decided to reconstruct the company and for this purposes a new company named
Linvin Ltd. was formed with nominal capital of Rs 200000/- divided in to 500 10%
preference shares of Rs 200/- each and 5000 equity shares of Rs 20/- each to take over
the assets and liabilities of Devin Ltd. on the following basis. A) The debenture holders in
Devin Ltd. are to accept 300 preference shares, B) the share holders of Devin Ltd. are to
receive  one equity share in Linvin Ltd. for every four shares held by them and C) the cost
of liquidation amounting to Rs 2000/- is paid by the new company. The balance of
preference shares has been issued and taken up by the public. Pass necessary journal
entries and prepare important ledger accounts in the books of Devin Ltd. and pass
necessary opening entries in the books of new company.

25.   From the following data relating to a company ( in voluntary liquidation), you are asked to
prepare Liquidator’s Final Statement of Account.

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a. Cash with liquidator (after all assets are realized and secured creditors and
debenture holders are paid) is ₹ 6,73,800.
b. Preferential creditors to be paid ₹ 30,000.
c. Other unsecured creditors ₹ 2,15,000.
d. 4,000, 6% Preference shares of ₹ 100 each fully paid.
e. 2,000 Equity shares of ₹ 100 each, ₹ 75 per share paid up.
f. 6,000 Equity shares of ₹ 100 each, ₹ 60 per share paid up.
g. Liquidator’s remuneration 2% on preferential and other unsecured creditors.
h. Preference dividends were in arrear for 2 years.

(2×15=30)

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