BCom In Accounting & Finance (BCAF) SEM V 2019 20 Nov 2019-20 FINANCIAL ACCOUNTING V Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q1 a. State the Following Statement True or False: (Any 8) 8M 1, Two or More Companies combining to form a new company is called absorption 2, Under Purchase method of Accounting for Amalgamation, Assets and Liabilities are taken at Debit Balance of Realisation account is Profit which is transferred to Equity Shareholders A/c Amalgamation of companies 4 4, Purchase Consideration means the amount paid by one company to another company in consideration for the Assets and Liabilities taken
   • 5. The nature of External Reconstruction and Internal Reconstruction is same Approval of stakeholders is not required for Internal reconstruction 7, A company is allowed to convert its fully paid shares into stock Underwriting o Shares and Debentures is not compulsory as per the companies Act, 2013 /9, Under Liquidation of Companies, the Preference Shareholders are paid last after payment to all the other stakeholders Post Buy back debt — equity ratio should not exceed 1:2 Choose the correct option from the option provided and rewrite the statement: Every buy back shall be completed within a period of
   • a) 6 months from the date of passing of the special resolution 3 months from the date of passing of the special resolution 1 year from the date of passing of the special resolution
   • d) | month from the date of passing of the special resolution Where a company purchases its own shares out of free reserve or securities premium, a sum should be transferred to Capital Redemption Reserve which should be equal to the amount paid to the shareholder who sold his shares
   • b) to paid-up capital of the company equal to the nominal value of shares so purchased , | d) none of the above
   • 3. The payment of commission to underwriter (s) is to be authorised by
   • a) The board of directors The articles of association
   • c) The memorandum of association
   • d) The Stakeholders of the company A merchant banker can act as a underwriter provided he holds a certificate granted by
   • a) Government of India
   • d) Registrar of Companies company after the completion of a buyback of its shares Can not issue same kind of shares within one year Can not issue same kind of shares within 6 months Canissue same kind of shares within 6 months Cannot issue bonus shares Capital reduction scheme is worth considering company is small bul company has recovery prospects be ifthe company has no prospects If the company is less capitalized The company must apply for an order confirming the reduction the Supreme Court Te the High Court
   • d) To the Liquidator Liquidation of Companies the payment schedule is as it 9. Investment Allowance Reserve is
   • b) Statutory’ Reserve
   • d) All of the above For Purchase Consideration under AS 14: +a) Only payment to equity shareholders are to be taken into consideration Only payment to shareholders are taken to into consideration Only payment to shareholders as well as debenture holders are taken to into consideration
   • d) Payment to All stakeholders is taken into consideration
   • a. ISPAT India Ltd. a company which deals in Iron & Steel has suffered heavy losses and looks to restructure Balance Sheet. It seeks your advice as to how the balance sheet can be restructured and the restructured Balance Sheet can be made? From the below information are provided: 15 M 8% Preference Shares of Rs. 100 each, Rs. 80 paid up Equity shares of Rs. 10 each The scheme of was put in place as: , All the partly paid shares were called up and paid by all the shareholders
   • 2. Preference shares were reduced by Rs. 40 per share & Equity Shares were reduced to Rs. 4 per share
   • 3. were split to Rs. 1 per share post the above reduction
   • 4. Debentute holders agreed to reduce their claim by 40% if the the interest on Debentures was raised to Land was appreciated to Rs. 6,00,000 whereas Plant & Machinery was depreciated by 40%)
   • 6. The of Inventories was Rs. 4,50,000 and it was brought to
   • 7. All the fictitious, Intangible, doubtful and losses were to be written off There was against the company to the tune of Rs. 1,50,000 recorded under the Creditors which settled by paying one — third of the amount due An liability of Rs. 1,50,000 came to light of the company on it was settled by paying off Rs. 50,000
   • 10. The Directors of the company decided to sell 4,00,000 Equity Shares of the company at | per share at par for the working capital needs of the company All the point put above were accepted. You are required to pass Journal entries and Prepare Revised
   • b. IRCTC Ltd. a government company who files DRHP for its Initial Public Offer shares of Rs. 10 each at Rs, 250 per share, appoints Capital, Citi bank Financial Services, JM Financial Services & Morgan Stanley as its lead manager for the IPO in the ratio of 4:3:2:1 The lead manager agreed to the Ratio and also took the following shares for themselves (Firm The Application bearing the stamp of lead manager. (Excluding the shares taken by them) was: Application bearing No stamp of the lead manager was 6,00,000 Prepare a statement of Underwriting of shares & also calculate the Net Liability of for a Commission to be paid @ 5% on Issue price of the shares Also Pass Journal in context to the Underwriters. 15 M a, Following is the balance sheet of M/s Sharp Ltd. as on March, 2019: i Balance sheet of M/s Component Limited as at 2019
   • b. Reserves & Surplus 2 37,50,000
   • c. Money Received against Share warrants
   • 4. Current Liabilities: a, Short Term Borrowings
   • i. Tangible Assets 4
   • 2. Current Assets:
   • a. Current Investments Notes of Accounts: Equity Shares of Rs. 10 each 30,00,000 Issued, and paid up Capital: 2,50,000 Equity Shares of Rs. 10 each fully paid The company wants to buy back 50,000 equity shares of RS.10 Each on 1* April, 2019 at RS, 20 per: share. Buy back of shares is duty authorised by its articles and necessary resolution passed by th: company towards this. The payment for buy back of shares will be made by the company out of su ffigient with your calculations, whether buy back of shares by company is within provisions of the Companies Act, 2013. If yes, pass necéssary journal entries towards buy back of shares and prepare a Balance sheet after a buyback of shares The following is the Balance Sheet of Suman Ltd. which is in the hand of Liquidator. iSM Balance Sheet as at 31-12-2019 The assets realized the following amounts (after all costs of realization and liquidators remuneration amounting to paid out of cash in hand Rs.20,000 as per Balance Sheet): Prepare the Liquidators Final Statement of Account
   • 4. The Summarised Balance sheet of A Ltd. & B Ltd. as at April, 2019 are as follows: Balance Sheet of A Ltd. & B Ltd. is M
   • a. Share Capital: Equity Shares of Rs. 10 each fully paid 6,00,000 11% Preference Shares of Rs. 10 each fully paid
   • b. Reserves & Surplus
   • a. Trade Payables
   • b. Trade Receivables The above two companies agree to amalgamate and form a new company AB Ltd. the following For every 5 equity shares, 6 shares of AB Ltd. of Rs. 10 each will be issued at premium of 50% Debenture holders will issued 12% debentures of AB Ltd. of same amount and The holders of 11% Preference shares will be allotted 4, 13% Preference shares of Rs. 10 cach of AB Ltd. for every 5 shares held
   • 2. For every 5 equity shares 6 shares of AB Ltd. of Rs. 10 each will be issued at premium of 50% 3, Debenture holders will be issued 12% debentures of AB Ltd. of same amount and
   • 4. Creditors worth Rs. 10,000 in the balance sheet of A Itd are from the goods purchased by B Ltd You are required to show: The calculation of purchase consideration Entries in the books of AB Ltd. under Purchase method 3, Opening Balance sheet of AB Ltd Qa: b. is the summarised balance sheet of Hexza Ltd. as at March, 201 9; | i Balance sheet as at March, 2019
   • 4. Current Liabilities:
   • a. Payables
   • a. Fixed Assets
   • 1. Tangible Assets Penta Ltd decided to absorb the business of Hexza Ltd. on April, 2019 at the book value of assets and trade except building which was valued at Rs, 24,00,000 and Plant & machinery at consideration was payable as follows: of Expenses Rs. 10,000 of Equity shares of Rs. 10 each fully paid at Rs. 11 per share for every J every Equity share of Hexza Ltd. anda payment of Rs. 4 per Equity share Sundry Creditors of Hexza Ltd worth Rs. 1,00,000 were due to Penta Ltd
   • 4. Inventorics worth Rs. 1,20,000. of Hexza Ltd was the unsold stock purchase from Penta Lid n which the company charges profit of 20% on Sales Calculate the Purchase consideration, show the necessary ledger accounts in the books of Hexza and opening Journal Entries in the books of Penta Ltd
   • a. Give the methods under which Purchase Consideration are calculated. 8m
2. Q5 b. Give the conditions laid down for Buy Back of Equity Shares under Companies Short Notes (Any 3) | iSm Liquidation of Companies
   • 4. Underwriters Commission under underwriting of Shares and Types of Amalgamation

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